Lending · Private Credit
How a Facility Works
Collateral in custody, credit on documented terms.
A Wesvel lending facility is a bilateral loan secured by digital assets. The borrower pledges collateral into segregated custody under a control agreement, draws cash or stablecoins against it at a conservative loan-to-value ratio, and repays on documented terms. Every element of the structure exists to make one outcome true: if the borrower cannot repay, the lender is made whole from collateral it already controls.
The parties
Three parties are always present: the borrower, the lending entity, and the custodian holding the collateral. The lending entity is separate from any trading or custody business, so a failure elsewhere cannot reach the loan book. The custodian is independent of both borrower and lender, and holds the collateral under an agreement that names who may instruct it and when.
The lifecycle
Terms are agreed and documented. Collateral is delivered to the segregated account and its value confirmed against pre-agreed price sources. Proceeds are advanced. Through the term, collateral value is marked continuously against the outstanding balance; if the ratio deteriorates past a threshold the borrower is called for more collateral or a paydown, and if the call is not met within its cure period the lender may liquidate. At maturity the borrower repays and the collateral is released.
What the borrower gets
Liquidity against an asset without selling it: to meet an obligation, fund operations, or finance a position, while retaining the upside of the collateral. Terms, rate and loan-to-value are set per facility from the collateral’s liquidity and volatility and the borrower’s profile. No two facilities are identical, and none is offered on a published rate card.
What the lender relies on
Not the borrower’s promise but the collateral’s value and the lender’s control of it. That is why the facility is over-collateralized, why collateral sits with an independent custodian rather than the borrower or the lender, why marks come from agreed sources, and why the margin mechanics act on collateral deterioration before any question of borrower default arises.
Practice
How Wesvel approaches it
- 01The lending entity is legally separate from trading and custody activities, and collateral is never rehypothecated.
- 02Collateral is held by an independent custodian under a control agreement that gives the lender the right to instruct on default.
- 03Loan-to-value, price sources, call thresholds, cure periods and liquidation rules are written into the facility documents, not decided at the time.
- 04Facilities are sized to the collateral’s depth so that a full liquidation could be executed without moving the market against the loan.
More in Lending
- Collateral and Loan-to-ValueWhich assets qualify as collateral, how loan-to-value is set from their liquidity and volatility, and why the haircut is the whole loan.
- Margin Calls and LiquidationThe thresholds, cure periods and liquidation rules that protect a facility when collateral falls, and how they differ from on-chain liquidation.
- Custody and Triparty ControlWhy collateral sits with an independent custodian under a control agreement, and how instruction rights work through the life of the loan.
- Documentation and RecourseThe facility agreement, security and control documents, and what a lender can and cannot do when things go wrong.
- Borrower Diligence and Use of ProceedsWho Wesvel lends to, what it asks before it does, and why the use of proceeds is part of the underwriting.
- Receivables FinancingAdvancing against accounts receivable, whether by purchase or by loan: eligibility, verification, dilution, concentration and collections.
- Private Credit FacilitiesSenior secured and unitranche facilities to operating companies: security, covenants, monitoring and the role of the sponsor.
- Warehouse Lines of CreditRevolving facilities to lenders and originators, secured on the loans they make: borrowing base, eligibility, bankruptcy-remote structure and takeout.
- Asset-Based LendingRevolving and term credit secured on inventory, equipment and mixed collateral pools, governed by a borrowing base and field examination.
- Structured and Other DebtBridge loans, revenue-based financing, participations, forward-flow agreements and structured notes: the products used where a term loan or a borrowing base is the wrong shape.
- Underwriting and ServicingThe credit process behind every non-digital facility: analysis, approval, documentation, monitoring, servicing and workout.
- Short-Duration Business CreditShort-duration revenue-based credit exposure to operating businesses, and how the mandate underwrites and sizes it.
- Equipment FinancingLoans and leases for vehicles, machinery, medical and technology equipment, secured on the equipment itself, plus sale-leaseback of assets a business already owns.