When investing in business loans, there is always a risk that some borrowers may fail to meet their obligations. However, on the FinoMark platform, a "default" (insolvency or failure to fulfill obligations by the borrower) does not mean that the investor loses everything they have invested.

At this stage, the debts are in the recovery process, during which FinoMark applies a clear and structured strategy to recover funds – through settlement schedules, legal actions, or negotiation mechanisms.

Default Rate and Management

(Data as of June 2025)

• Share of terminated contracts due to default: 6.2% of all issued loans

• Share of defaulted contracts with a signed settlement schedule: 4%

• Total loan amount funded through the platform: over EUR 16.1 million

• Number of financed projects: 517

According to FinoMark CEO Gražvydas Balčas:

Default is a signal that a business needs a revised financing plan, not the end of the road. Most borrowers understand the responsibility of not meeting obligations – our job is to communicate that clearly with them.

How Loans Recover After Termination

Once a loan contract is terminated, an active debt recovery process begins. This may involve:

• Negotiating new payment schedules (settlement plans)

• Recovery in cooperation with the borrower

• Further legal action if no agreement is reached

Around 35–40% of borrowers return to a regular or revised payment schedule after termination. This means that even if an investor incurs a short-term loss, the full investment can still be recovered over the long term.

Settlement Schedules: Borrower Motivation Becomes Investor Protection

When the situation allows, a borrower facing payment delays may enter into a settlement schedule – an alternative payment plan based on their current financial capabilities. This way, the investor continues receiving at least partial cash flow, while the borrower avoids additional costs and court proceedings.

38.46% of borrowers who signed a settlement schedule have already started repaying their debts – some are even exceeding their planned payment amounts.

What Does This Mean for an Investor on the FinoMark Platform?

• Even if loan execution is interrupted, the borrower's responsibility does not disappear

• In many cases, borrowers resume payments

• Settlement plans help borrowers return to their payment schedule and maintain cash flow for investors