LaaS - Lending as a Service Platform: Startup Financial Model (10 Year)

The cashless lending marketplace has become a huge hit all around the world these days. People love not going through banks and investors like to be able to put their money to work in platforms that facilitate peer2peer lending. So, I have put together a financial model that helps anyone looking to start a LaaS (lending as a service) platform plan out their first years in business and run some sensitivities.

Note, a related P2P investing model also exists.


*You will be taken to the template download page after purchase and I will also e-mail you the model.

In order to properly forecast out cash flows, there are various risk grades you can define and within those risk grades there are various avg. term amounts. For simplicity sake, I just put in terms of 3,6,9,12 months but you can enter whatever number you want for that and the model takes it into account.

For each of the risk grades, you can define the average annual interest rate you think they will have (based on investors bidding) as well as average % default rates. This will be fairly arbitrary, but through research you can probably get fairly close on the figures.

All of that is necessary so you can see how much total loan volume your LaaS platform is projected to achieve as well as the gross interest. The model solves for that and then based on whatever % fee the platform takes from investors, a net interest revenue line will populate. You will be able to see granular data for the interest / closing fees generated on each risk grade as well charts.

The closing fee % is manually input as well as the % of that fee the platform gets.

One of the more interesting pieces of logic I have added to this is a % of any defaults that platform will cover. This could be 0% if you don't plan on having such logic, but if you do, that would deduct from the platform's gross interest revenue.

One of the more complex pieces of logic I implemented into the financial model is the ability to run sensitivity analysis on 3 of the key revenue drivers (avg. interest rates, avg. loan amounts, and settled loans). You can individually assign a Low, Base, High input for each and determine the magnitude that Low/High will mean for each independently. The benefit of that is that you will be able to set a base case and then with the turn of a drop-down button, adjust all figures up or down for those revenue driving variables.

There is a monthly and annual pro-forma / cash flow summary that populates based on all the assumptions as well as an executive summary. The executive summary will show how much capital has been required in order to cover all startup/net negative cash flows as well as the IRR of the entire projection.

One of the more in-depth pieces of this model is the control tab. On that, you will choose a given month of exit (if you plan on selling the LaaS platform before the 10th year) as well as financing assumptions and exit valuation assumptions. This all will be in the same area as the sensitivity drivers.