Direct lending for larger projects: LEND expands its financing model to include bonds

LEND is expanding access to direct lending. Bonds will enable larger loan projects to be financed, creating a structure that combines higher financing volumes with direct access to our investor community.

The underlying principle remains the same: LEND connects borrowers with investors. What is new is the legal structure behind the financing. Instead of acquiring individual shares of a loan receivable, investors subscribe to a bond issued by a LEND subsidiary established specifically for the project. The way investors invest on the platform remains unchanged.

Why is a new structure needed?

The Banking Ordinance requires borrowers to hold a banking licence if they accept more than CHF 1 million from more than 20 investors. This rule is intended to protect deposits.

Bonds are not deposits and are therefore exempt from this rule. This is why we finance projects exceeding CHF 1 million through a bond.

“By financing projects through bonds, we are extending our established direct lending model to larger loans. For us, the decisive factor remains a project’s quality, rather than its size. That is why thorough credit analysis, clear structures and transparent disclosure of risks remain central to our approach.”
Stefan Jaecklin, Partner & Strategy at LEND

How financing through a bond works

LEND establishes a subsidiary that issues a bond. The sole purpose of this company is to use the proceeds from the bond issue to finance one loan project. It does not finance any other loan projects and has no operating business.

This structure enables larger loan projects to be financed. Legally, it differs from the direct purchase of a receivable, but the economic outcome is largely the same. Investors subscribe to the bond through the LEND platform directly from the subsidiary, which holds the corresponding loan receivable on its balance sheet. LEND handles the administration and management of the loan and passes the borrower’s payments on to investors as usual.

The loan project details show investors that the financing is provided through a bond. Otherwise, there is little change to how they invest in a loan project. Once the loan project has ended and all claims arising from it have been settled, the subsidiary can be used to finance a new loan project.

How does the bond differ from the existing model?

With a traditional direct investment through LEND, investors acquire a share of a loan receivable. Under the new structure, they instead subscribe to a bond issued by a LEND subsidiary.

The underlying economic principle is similar: repayments and interest come from the financed loan project. Legally, however, these are different forms of investment. With a bond, investors have a claim against the subsidiary under the bond, rather than a direct claim arising from an acquired loan receivable. Economically, however, the same outcome is achieved: interest payments and repayments under the bond depend on the corresponding payments from the borrower.

There is also a difference in tax treatment. Interest payments on the bond are subject to Swiss withholding tax of 35%. LEND remits this tax directly and reports the amount in the tax statement. Investors subject to tax in Switzerland reclaim it through their tax return. For investors abroad, recovery depends on the applicable double taxation treaty.
Investors can find all relevant details about the term, interest rate, repayment and structure in the information provided for each loan project.

What benefits does the structure offer borrowers?

The bond structure enables larger loans to be financed. It may be of interest, for example, to businesses and real estate projects whose financing needs exceed the usual amounts of individual crowdlending projects.

For borrowers, it offers the following opportunities:

• Access to a source of non-bank financing

• Financing for larger loan amounts

• A structure tailored to the project

• Access to LEND’s investor base

Whether financing is possible, and on what terms, continues to depend on the credit assessment, the project structure, the available collateral and the risk profile.

What does the bond mean for investors?

Investors gain access to larger loan projects while continuing to participate through smaller investments, as they are used to doing. This allows them to add such a project to an existing investment portfolio and helps diversify risk. As the total financing amounts are significantly larger, the minimum investment amount may also be somewhat higher.

As with any direct investment in a loan, there is a risk of default. If the borrower experiences payment difficulties, interest payments or repayments may be delayed or may not be made at all. The subsidiary legally separates the project from other financing arrangements. It does not, however, eliminate the credit risk of the underlying project.

Credit analysis remains crucial

The new structure does not change the requirements LEND places on a loan project. Before providing financing, we analyse factors including the borrower’s financial situation, their ability to service the loan, the planned use of funds and, in particular, the collateral available to secure the loan.

Depending on the project, additional factors are taken into account. These may include a company’s earnings capacity, existing obligations, the value of real estate or the planned repayment of the loan. LEND determines the project’s structure and terms only after completing its assessment. Before making their decision, investors receive information about the borrower, the project, the collateral and the key risks.

More than ten years of experience in the Swiss lending market

LEND has been assessing and financing loans in Switzerland since 2015. By October 2026, loans totalling more than CHF 635 million had been financed through the platform. CHF 132 million of that total was financed over the preceding twelve months.

More than 10,000 registered investors use LEND to invest in Swiss loans and mortgages, either directly or through structured solutions. These include institutional investors.
This experience provides the foundation for the next stage of development. With project-specific bonds, LEND is extending its existing model to include a structure for larger financing volumes. Our commitment remains the same: to assess loan projects carefully, structure them clearly and make them accessible transparently.

A new bond project is online

The first project financed through a bond is now online. Further financing of this kind will follow. This loan project has a total volume of CHF 4 million, a term of 12 months and a nominal interest rate of 7%. The investor fee is only 0.25%, so the bond pays 6.75% net.