Income Marketplace has published an additional clarification on the protection structure for Sandfield Capital loans following investor discussions about the roles of the Buyback Obligation, insurance and the special-purpose vehicle SFC4.
Two separate layers
- The Buyback Obligation is the contractual mechanism that applies to the investor;
- the insurance applies to the underlying loan owed by the borrowing law firm;
- SFC4, rather than the individual investor, is the beneficiary of the policy;
- the repurchase obligation is triggered when a loan is 60 or more days overdue.
Key parameters
| Parameter | Sandfield Capital structure |
|---|---|
| Contractual investor protection | Buyback Obligation |
| Repurchase trigger | 60 or more days overdue |
| Repurchase coverage | Outstanding principal and accrued interest |
| Insurance beneficiary | SFC4 |
| Cashflow Buffer / Junior Share | No |
The Buyback Obligation is the contractual mechanism for investors
Sandfield Capital loans offered through Income Marketplace carry a Buyback Obligation. If a loan becomes 60 or more days overdue, Sandfield Capital is contractually required to repurchase it.
According to Income, the repurchase covers the outstanding principal and accrued interest. Interest also continues to accrue while the loan is in Buyback Initiated status.
How the insurance works
The second layer is insurance provided by Accelerant Insurance Europe SA, which Income says is rated A- (Excellent) by AM Best. The policy is not direct insurance for individual Income investors.
The insurance applies to the obligation under the underlying loan owed by the law firm receiving the financing. According to Income and subject to the policy terms, if the borrower defaults, the insurer compensates the amount due under that loan.
The beneficiary of the policy is SFC4, Sandfield's ring-fenced SPV that holds the claims. The insurance therefore supports the structure through which Sandfield is expected to meet its Buyback Obligation.
Why there is no Cashflow Buffer or Junior Share
Income also addressed the absence of a Cashflow Buffer and Junior Share. These mechanisms are normally sized using a loan originator's repayment history and observed portfolio losses.
Because Sandfield's underlying loans are insured, Income says the insurance structure—rather than observed historical losses—drives the assessment. As a result, a 100% advance rate is applied and Sandfield retains no residual stake once a loan has been fully funded.
How the funds flow
Sandfield Capital is the operating company, while SFC4 is a separate, ring-fenced and bankruptcy-remote SPV that holds the claims and assigns them to the Income SPV.
Borrower or insurer → SFC4 → Income SPV → investor
Both repayments from law firms and any insurance proceeds first reach SFC4. The funds then pass to the Income SPV and ultimately to investors. The purpose is to separate the claims and related cash flows from Sandfield's operating activities.
Why some loans may appear as “late”
According to Income, a late status does not necessarily mean that the borrowing law firm has failed to pay. The loans finance litigation proceedings whose actual duration may differ from the estimated average maturity.
If a loan reaches 60 days overdue, the Buyback Obligation applies. Income says interest continues to accrue throughout the repurchase process.
What does this mean for investors?
The key clarification is that the Buyback Obligation and the insurance are not the same mechanism. The investor does not hold a direct insurance policy from Accelerant. The contractual mechanism facing the investor is Sandfield Capital's Buyback Obligation.
The insurance operates at the level of the borrowers' underlying obligations and benefits SFC4. It may support the flow of funds if an underlying loan defaults, but its effect depends on the specific policy terms and the operation of the full SPV structure.
Investor Impact
Transparency: ↑
The clarification makes it clearer who provides the Buyback Obligation, what the insurance covers and who benefits from the policy.
Structural risk: →
No new protection mechanism has been announced. Investors remain dependent on Sandfield's performance, the terms of the insurance policy and the movement of funds through SFC4 and the Income SPV.
Important: A Buyback Obligation is a contractual commitment, not a guarantee of payment. Insurance coverage is subject to the policy terms, and individual investors are not direct beneficiaries. P2P investments are not bank deposits and involve a risk of partial or total loss of invested funds.
Impact on the P2P Investitor Score
No change to the Score. The clarification improves transparency around the existing structure, but it does not introduce a new protection mechanism or represent a measurable change under a specific methodology criterion.
This material is for informational purposes only and does not constitute investment advice.