What are the safety structures of different loan marketplaces?

The two safety structures that Loan Marketplaces most often have in place are a pledge and assignment of loan receivables.

Pledge ensures that an investor has legal rights to the general proceeds from the collateral that the loan is secured by. This can be a mortgage, heavy machinery, land, or even a loan portfolio in case of lending company-backend loans.

Assignment of loan receivables with which an investor has legal rights to the proceeds from a particular loan or loan even if the marketplace or lending company defaults or ceases to exist.

In the case of lending company-based marketplaces, they usually employ complementary safety mechanisms to ensure that a lending company is more likely to issue good quality loans.

Those are either skin in the game or a junior share according to which a lending company is obligated to "co-invest" in its loans together with the investors.

Some of the loan marketplaces may also offer a provision fund that acts as a cash buffer for covering investors’ losses that might arise from loan defaults or missed payments.

You can learn more about safety structures & mechanisms of lending company-based marketplaces here.