General Risk Statement
Last Updated: September 2022
1. Understanding the Risks of Peer-to-Peer Financing
By participating as an investor on our platform, you will be providing financing to local businesses through subscription of their Investment Note(s) listed on CapBay’s platform. As with any financing, there is always a risk that the issuer of an Investment Note(s) is unable to meet its repayment obligations. In this event, you may lose all (or part of) your capital invested including any unpaid interest. Please note that your investments are not insured or covered by the Capital Market Compensation Fund.
Whilst the issuer may pledge certain security to the investors under the Investment Note(s) (including but not limited to personal guarantee, corporate guarantee, charge over property), a security does not guarantee that you will be able to recover the unpaid principal and interests owed to you by the issuer. We do not undertake to the investor that any security pledged will ensure the repayment of the loan. If an enforcement action is taken against the issuer, it is possible that an investor will not recover any money owed to them by the issuer despite the security pledged. However, as a platform operator, CapBay will endeavour, on a best effort basis, to recover the amount owed to the investor by the issuer be it through a recovery exercise or through foreclosure proceedings.
2. No Secondary Market
Currently, CapBay does not have any existing secondary market to trade or sell off the issued Investment Note(s) that you have invested. Once invested, your capital will be locked into the issued Investment Note(s).
3. Disclaimer on Accuracy and Completeness of Information
3We do not endorse the creditworthiness of the issuers. We may make available certain information about an issuer with the intention of assisting investors to have easier access to information. Such information is supplied by the issuer and/or obtained through third-party credit reporting agencies. As such, we cannot guarantee such information to be completely accurate and therefore cannot accept liability or responsibility for the accuracy of any information supplied by an issuer and/or obtained through third-party credit reporting agencies, nor for any opinion expressed or implied in relation to the creditworthiness of an issuer (in the form of a risk rating or otherwise). Investors shall form their own opinion regarding the creditworthiness of the issuer and undertake their own research and analysis for each Investment Note(s) and where appropriate, seek their own independent financial, legal, and/or professional advice.
There may be limited financial and trading information provided by the issuer and the disclosure of information might or might not be sufficient for you to reasonably make fully informed investment decisions and/or assessments of the issuer and its issued Investment Note(s) being offered to you. Additionally, some issuers (especially those who are sole proprietors or partnerships) may not be subjected to statutory audit of their financial statements. Unaudited financial statements may not accurately reflect the creditworthiness of an issuer. Therefore, it remains your responsibility as an investor to manage your returns and select the issued Investment Note(s) according to your risk tolerance.
4. Managing Portfolio Returns
Depending on how you choose to invest via our platform, whether it be through the Auto-Invest feature or through manually investing in the Investment Note(s), it is your responsibility as an Investor to assess and identify the suitability of the Investment Note(s) and profiles that have been made available, consider the rate of return at which you are investing, ensure that it is within your risk tolerance, and that it meets your investment goals. Please take note that the platform does not take into account your financial situation and specific investment objectives.
You may mitigate the risks by diversifying your investment portfolio. However, in a wider economic downturn which may adversely affect the businesses’ ability to trade and repay, a large proportion of the businesses on our loan book may be impacted despite diversification. In such circumstances, there remains a risk that you may lose all of your invested capital including unpaid interests.
You are strongly advised to seek independent financial, tax, legal, and other professional advice if you do not fully understand the risks of investing on our platform. Should you continue to access or use our website, platform and/or services, you are deemed to have understand and acknowledged to the contents of this Risk Statement.