Lending glossary

Bridging finance

Short-term funding used while a defined exit, usually a sale, settlement or refinance, is completed. Its viability depends on how credible that exit is.

Business purpose

Borrowing taken out for the purposes of a business rather than for personal, domestic or household use. LendCap lending is business-purpose lending.

Capitalised interest

Interest that is added to the loan balance rather than paid in cash as it accrues. It increases the amount owing over the term, so the amount to be repaid at the end is larger than the amount originally advanced.

Default

A breach of the loan terms by the borrower, most commonly a missed payment or failure to repay at the end of the term. A default starts a formal process and can lead to recovery action.

Disclosure statement

The formal document a licensed peer-to-peer lending service must provide, setting out how the service operates, its fees, and the risks involved. Where marketing material and the current disclosure statement differ, the disclosure statement applies.

Exit

The identified way a loan will be repaid, for example a property sale, a settlement or a refinance. The exit is assessed before an opportunity is presented, but it is not guaranteed to occur as planned.

First-ranking security

A registered security interest that sits ahead of all others over the same property. In a recovery, the first-ranking holder is repaid from the proceeds before any lower-ranking lender receives anything.

FSP (Financial Service Provider number)

The registration number a financial service provider holds on New Zealand's Financial Service Providers Register. Crowdsphere Limited, trading as LendCap, is FSP360186.

Licensed peer-to-peer lending service

A service licensed in New Zealand to arrange lending between individual lenders and borrowers. A licence sets conduct and disclosure obligations for the service; it does not guarantee any loan or protect a lender from loss.

LVR (loan-to-value ratio)

The size of a loan expressed as a percentage of the assessed value of the property securing it. LendCap lending is written at a loan-to-value ratio of up to 65% of property value.

Mortgagee sale

A sale of a secured property carried out by a lender under its mortgage after a default. It takes time, incurs costs, and the price achieved may be less than the assessed value.

Peer-to-peer lending

Lending arranged directly between individual lenders and borrowers through a licensed service, rather than through a bank's balance sheet. Each lender decides which loans to fund and carries the risk on those loans.

Ranking (priority)

The order in which secured lenders are repaid from the proceeds of a secured property. A lower-ranking lender is only paid once the lenders ahead of it have been repaid in full.

Recovery

The process of realising security after a default in order to repay what is owed. Recovery takes time and costs money, and it may not recover the full amount lent.

Refinance

Replacing an existing loan with a new one, often with a different lender, structure or term. A refinance is frequently the identified exit for short-term lending.

Registered lender

A person who has completed registration with LendCap and can view and consider opportunities in the lender portal. Registration does not commit anyone to lending.

Registered security

A security interest formally recorded against a property title, which gives a lender a defined position if the borrower defaults. Security defines a recovery position; it does not guarantee repayment.

Second mortgage

A mortgage registered behind an existing first mortgage over the same property. The second mortgage holder is repaid only after the first mortgage is repaid in full, which increases the risk carried on that loan.

Shortfall

The gap that remains when recovery proceeds are less than the amount owing. A shortfall is a capital loss for the lenders involved.

Term

The agreed length of a loan, from drawdown to the date it must be repaid. The term for each opportunity is set out in its formal offer information.

Valuation

An independent assessment of what a property is worth, used to work out the loan-to-value ratio. A valuation is an opinion at a point in time; property values move.

Last reviewed: 7 September 2026