Our in-depth review compiles crucial details to help you assess whether Percent is legit, ensuring you make informed investment decisions.

What is Percent and how does it work?

Percent operates as a platform dedicated to private credit investments, offering opportunities for investment in various types of private credit. Private credit itself encompasses a broad range of investment options that differ in structure and purpose.

On the Percent platform, investments are divided into three primary sub-asset classes: asset-based securities, corporate loans, and limited partner investing in funds.

1. Asset-Based Securities: This category includes investments where repayment is expected from the cash flows generated by a specific asset, which also acts as collateral. This can encompass a wide range of assets, from loans and receivables to contracts with future cash flows. Within this sub-asset class, Percent focuses on several areas:

- Small and Medium-Sized Business (SMB) Financing: This includes loans, merchant cash advances, and leases for SMBs, along with discounted receivables, also known as factoring, which helps bridge financing gaps.

- Consumer Loans and Advances: Covers a wide array of consumer debt types, such as mortgages, personal loans, and "Buy Now, Pay Later" plans, often involving entire loan portfolios.

2. Corporate Loans: This asset class on Percent involves:

- Cash-Flow Lending: Loans underwritten based on a company's cash flows or asset values, suitable for businesses with predictable operations cash flows.

- Venture Debt: Debt financing for private, often venture-backed companies, designed to fill the gap between fundraising rounds with minimal capital dilution.

3. Limited Partner Investing: Offers investors the chance to participate in a managed private fund as Limited Partners (LPs), where investment strategies are defined by the General Partners (GPs) of the fund. This is a more passive investment option, with returns dependent on the fund’s performance.

Percent also provides an option for diversification through its Blended Notes, which consolidate exposure across most sub-asset classes available on the platform. This structured approach allows investors to align their investment choices with their overall strategy, facilitating exposure to the expansive private credit market.

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How risky is Percent?

— Moderate Risk

Investing through Percent, like any investment platform, involves inherent risks. Percent aims to mitigate these risks for its underwritten deals by employing a proprietary risk framework designed to thoroughly vet investment opportunities. This approach is intended to balance the potential for returns while managing exposure to risk.

However, it's important to note that deals underwritten by third parties on the platform are subject to the diligence, structuring, and underwriting standards of those external underwriters. These third-party deals rely on the experience, platform, and guidelines of these external entities.

As a result, the risk profile of such investments can vary, reflecting the methodologies and risk appetites of the different underwriters involved. Investors should be aware of and comfortable with the varying degrees of risk associated with different deals on Percent.

How liquid is Percent?

— Minimum Liquidity

Liquidity on investment platforms like Percent refers to how easily investors can convert their investments into cash. While Percent offers various private credit investment opportunities, the liquidity of these investments can vary significantly based on the asset class and the specific terms of each deal.

Generally, private credit investments are less liquid compared to public equities, as they are often tied to longer-term loans or financing arrangements. Percent might provide mechanisms or features to potentially enhance liquidity, such as secondary markets or early redemption options, but these are typically subject to specific conditions and may not always be available for every investment.

How volatile is Percent?

— Moderate Volatility

The volatility of assets on Percent can be notably different from that observed in public markets.

Private credit assets, due to their nature and the markets they operate in, typically exhibit lower volatility compared to public equities. This is because private credit deals, including loans and debt financing, often have fixed returns based on contractual agreements, providing a buffer against the market's day-to-day fluctuations.

However, this does not imply that these investments are without risk. Factors such as the borrower's creditworthiness, market conditions affecting the underlying asset, and changes in interest rates can impact the performance of these investments.

While Percent aims to select and structure deals to mitigate such risks, investors should be cognizant of the inherent risks and the potential for volatility based on external economic factors and the specific characteristics of each deal.

What is the average rate of return for Percent?

13.41 %
— Moderate Return

Investors on Percent can expect competitive returns on their investments. As of February 1, 2024, idle cash in a Percent account earns an interest rate of 2.5%.

Additionally, the platform has reported a historical weighted average annual percentage yield (APY) of 13.41%. This indicates that, historically, investments made through Percent have yielded significant returns, reflecting the potential for profitability when engaging with the platform's private credit opportunities.

What is the minimum investment amount for Percent?


Investors looking to venture into private credit through Percent can start with as little as $500 for individual investments in asset-based securities and corporate loans, offering an entry point to the diverse world of private credit.

For those interested in limited partner investing, the minimum investment ranges between $50,000 to $100,000.

What is the investment time horizon for Percent?

3+ months

Investments on Percent can have a short time horizon, with opportunities starting as little as 3 months. This allows investors to engage in private credit deals with relatively quick turnaround times compared to more traditional, long-term investment options.

Who can invest in Percent?

United States

Percent is open exclusively to accredited investors within the U.S. who possess U.S. bank accounts, in compliance with its Reg D 506(c) exemption requirements.

For those outside the U.S. with international bank accounts, Percent is developing options to allow participation, though these will come with higher minimum investment thresholds.

Investors can complete the accreditation process via Percent's partner, Parallel Passport, directly through their account settings— a procedure that typically takes ten minutes, with verification up to forty-eight hours.

Is Percent regulated or audited?

SEC Regulated

As part of its commitment to compliance, Percent's investment offerings are subject to Regulation D of the Securities Act of 1933, specifically utilizing the 506(c) exemption. This exemption allows Percent to offer and sell its securities publicly, provided it only accepts investments from accredited investors and takes reasonable steps to verify their accredited status.

To further enhance trust and accountability, Percent likely undergoes periodic audits and reviews, although specific details about these audits and the entities conducting them are not provided. These audits are crucial for maintaining operational integrity, financial accuracy, and regulatory compliance. Through adherence to regulatory standards and undergoing audits, Percent aims to uphold the highest levels of diligence and transparency in its operations, offering a secure platform for private credit investments.

Is Percent insured?


Funds deposited with Percent are safeguarded in an FDIC-insured bank, offering investors a layer of protection. This insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category, which is the maximum limit set by law.

This means that in the event of a bank failure, investors' funds up to this insured amount are protected, providing a measure of security for the capital deposited on the platform.

Does Percent distribute payouts?

No Recurring Payouts

Percent does not directly offer dividends in the traditional sense associated with stock investments. Instead, investors earn returns on their investments primarily through interest payments or fixed returns specified in the terms of each private credit deal. These returns are akin to the concept of dividends but are based on the performance and cash flow generated by the underlying assets or loans that the investment supports.

The structure and frequency of these payments can vary depending on the specific details of each deal, including the asset class, the duration of the investment, and the agreed-upon terms between the investors and the borrowers. Investors should review the terms of each investment opportunity on Percent to understand the expected return structure, including how and when returns will be distributed.

How do I get my money back from Percent?

Investors on Percent can retrieve their money upon the maturity of their investment, at which point both the principal and yield are credited back to their Percent account. This credit can then be either transferred to an external bank account or kept within the Percent account for future investments.

To initiate a withdrawal, investors need to sign into their account, navigate to the "My Portfolio" page, and select the "Withdraw Funds" option found under the "Investable Balance" section. From there, they can choose the destination bank account and specify the withdrawal amount. After submission, a prompt confirms the withdrawal request has been made.

What are the annual fees for Percent?

Starting September 2023, Percent introduced a fee structure where fees are deducted from the interest payments received by investors over the life of an investment.

Specifically, the fee is set at 10% of each interest payment, not affecting the principal amount invested. For instance, if an investment opportunity advertises a 15% annual percentage yield (APY), the effective fee would be 1.5%, resulting in a net APY of 13.5% for the investor.

This fee is automatically collected from each interest distribution, ensuring transparency and simplicity in the fee assessment process throughout the investment period.

How do I handle my investments in Percent?

On Percent, investors have the ability to manage their assets actively through various means. This includes selecting from a range of investment opportunities in private credit, based on their individual risk tolerance, investment goals, and desired time horizon.

Investors can diversify their portfolios by allocating funds across different deals and asset classes available on the platform, such as asset-based securities, corporate loans, and limited partner investing in private funds.

Additionally, investors can track the performance of their investments in real-time, manage their idle cash by taking advantage of interest-bearing accounts, and potentially adjust their investment strategies based on market conditions and their financial goals.

While Percent provides the platform and opportunities for investment, the investors retain control over their asset allocation and management decisions, enabling them to tailor their investment portfolios according to their preferences and objectives.

How does Percent get taxed?

Percent simplifies tax reporting for investors by treating all investments on the platform as ordinary income.

Each tax year, investors receive a consolidated 1099-INT form, which reports the interest income earned from investments. This form aids investors in accurately reporting their investment income on their tax returns, streamlining the tax filing process.

How many investors are on Percent?

The website received an average of 78,000 visits in the last 3 months.

Since its inception in 2018, Percent has attracted thousands of accredited investors, positioning itself as a reputable platform for private credit investment.

Up to January 31, 2024, the platform has facilitated:

- The funding of 527 deals, totaling $988 million in amount funded.
- Maintained a default rate of 1.92%, indicating a relatively low rate of failure to pay back on investments.
- The average investment term for deals on the platform is 9 months, offering investors relatively short-term investment opportunities.

In terms of historical performance:

- A total of 421 deals have been fully repaid, with $797 million in principal returned to investors.
- Interest payments made to investors have totaled $40 million.
- The historical weighted average annual percentage yield (APY) for matured deals stands at 13.41%, showcasing the potential for significant returns.
- The recovery rate, which indicates the percentage of defaulted debt that has been recovered, is 19.19%.
- The loss rate, representing the percentage of investment not returned, is relatively low at 1.59%.

Who is the CEO of Percent?

Nelson Chu is the Founder and CEO of Percent.

Before establishing Percent, Chu led a successful career where he founded a strategy consulting firm dedicated to assisting companies in product development and capital raising, contributing to the creation of over $1 billion in equity value. His professional journey includes significant tenures at leading financial services firms such as Bank of America and BlackRock.

Chu is also an active angel investor, with a portfolio that includes noteworthy investments in companies like Anthropic, BlockFi, Care/Of (acquired by Bayer AG), Clover Health (listed as CLOV on NASDAQ), dv01, Eden Health, Plentina, Tala, and Uala.

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