What is Vendor Finance?

Vendor Finance is a simple concept:
There must be a lender and there must be a borrower
The lender lends money, the borrower borrows money
There are no liquidations, interest rates are fixed, and loans are fixed terms (can be perpetual at the lenders discretion using rollovers)
The lender's roles are the following:
Choose a collateral to accept 
Choose the token you want to lend
Select a lend ratio​
Set a repayment due date​
Set a fixed interest rate or a decaying rate.(There is an ability by the lender to change the fee later on to make sure it is still appealing to borrowers. This change would not affect people whom borrowed prior to the rate change. Once you borrow, your interest rate is locked in to whatever you agreed upon at the time of transaction.)
Seed the lending pool with liquidity 
Optional: Create pools with future dated expirations to allow for rollovers and perpetual loans
Collect repayment, interest owed and any defaulted collateral at the repayment due date
The borrowers roles are the following:
Select a loan 
Deposit collateral 
Receive your loan 
Pay back your loan + interest owed at the repayment due date to receive your collateral back 
​Rollover if eligible and if users wants to
Optional: Default on your loan and keep the lent tokens (in the case your lent tokens are more valuable then your collateral)
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Use cases

Last modified 3mo ago