Estimated Net Return

Estimated returns reflect various assumptions, which assumptions may or may not occur. Certain key assumptions are described below. No representations or warranties are made as to the achievability of the estimated returns and actual performance may be materially different from estimated returns. Estimated returns are subject to change without notice. The information described below is for information purposes only and is not intended as an offer to sell securities issued by Loop Funding Inc.

Loop Funding Inc. and its affiliates expressly disclaim any and all liability for any representations and warranties, expressed or implied, contained in, or omissions from, this document.

Investors should read the offering memorandum for securities offered by Loop Funding Inc., especially the risk factors relating to the securities offered, before making an investment decision. All purchases of the securities are made pursuant to available prospectus exemptions.

**Assumptions**

From time to time, we provide projected net returns on the Website. The projected net returns are a portfolio weighted estimate of the annual return. To calculate the net return, we use the projected gross yield, the projected loss rate, the projected slope of the default curve and the servicing fee for the Borrower Loans made. The average return is compounded monthly and shown before tax.

To calculate a projected annualized net return (estimated net return), we multiply the estimated gross interest rate (net of servicing fees) and estimated lifetime loss rate for each risk band by the estimated portfolio weights for the Auto-Lend plan to determine a weighted average interest rate and a weighted average lifetime loss rate for the modelled pool of loans. We then take the weighted average interest rates and weighted average lifetime loss rate for the modelled pool of loans and extrapolate them over a 3-year portfolio projection with continued monthly re-investment of principal and interest to arrive at a final cumulative net return estimate. The final cumulative net return estimate is then rooted by 3 (^1/3) in order to create the projected annualized net return.

The following are the estimated portfolio weights that are used in the current estimate:

Loan Grade

Conservative

Balanced

Aggressive

A+

2.10%

0.96%

0%

A

17.99%

8.19%

0%

B+

32.84%

14.94%

0%

B

47.06%

21.41%

0%

C+

0%

17.83%

32.71%

C

0%

15.28%

28.03%

D+

0%

9.38%

17.21%

D

0%

6.48%

11.88%

E+

0%

4.09%

7.51%

E

0%

1.45%

2.67%

The following are the estimated interest rates and loss rates that are used in the current estimate:

Loan Grade

Estimated Lifetime Loss Rate

Estimated Gross Interest Rate

Estimated Net Return

A+

1.40%

8.92%

5.52%

A

2.95%

11.61%

6.15%

B+

6.90%

13.69%

7.66%

B

9.80%

15.83%

9.84%

C+

11.30%

18.01%

11.07%

C

12.65%

20.23%

11.75%

D+

15.00%

22.93%

13.20%

D

17.80%

16.13%

15.34%

E+

22.80%

31.26%

18.59%

E

26.10%

36.93%

22.10%

**Limitations to these estimates**

These returns are an estimate of the return after fees and bad debts for recently accepted loans on the marketplace. We use these calculations as we believe they are currently the most useful and accurate way to assess future investment performance because it takes into account both our fees and any future bad debts. However, as with many calculations it has limitations, which include:

- The calculation is based on estimated bad debt rates and the actual bad debt rates may differ.
- Gross interest rates are likely to vary for each loan and may not match your portfolio of loans.
- The formula compounds interest monthly and assumes continued re-investment using Auto-Lend for a period of at least 3 years.
- The returns are calculated before taxes are applied to learnings.
- It assumes that all funds are fully invested in Notes and does not include any amounts not invested.
- The estimate uses a model portfolio and the actual portfolio weight of your Notes are likely to vary from the one shown.
- The calculation assumes that your portfolio is fully diversified, to ensure this is the case, no single Note shoud make up more than 1% of your portfolio.

We believe that transparency is vital to the success of a financial technology company

Active Investors

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Over 10,000 investors have lent money to Canadian businesses

Loans Originated

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Lent across Canada to 100's of growing small businesses

Total Loans Issued

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Performance by Loan Grade

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Distribution of Loan Grades

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Loan Characteristics by Loan Grade

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Loans by Province

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Loan Purpose

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Lifetime Default Curve

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This chart shows the cumulative loan principal defaulted in each month divided by the total volume of loans originated. Where a recovery has been successful, this will be included so the loan will be shown with the cumulative principal lost. This is compared to the projected loss curve which is calculated using the assumptions below.

Click here to view the default rate assumptions.

How Our Projections Are Calculated

✕

To project the lifetime default curve, we use a model portfolio which assumes continued re-investment for a period of 12 months and then full amortization for the following 48 months. This is to align default performance to the normal behaviour of an “annual cohort”. In this model, there are four factors used as inputs to calculate the projected default curve. The factors used are outlined below and are used to generate the following projected default curve:

The following table outlines the assumed portfolio mix that is used to calculate the projected default curve.

Band

Total

A+

1.22%

A

8.48%

B+

15.81%

B

21.06%

C+

17.77%

C

15.53%

D+

8.90%

D

6.18%

E+

3.75%

E

1.47%

Total

100.00%

The following table outlines the projected yield and the projected default rate by risk band used to calculate the projected default curve.

Risk Band

Projected Gross Yield (%)

Projected Bad Debt (%)

A+

8.92%

2.00%

A

11.61%

4.21%

B+

13.69%

8.63%

B

15.83%

12.25%

C+

18.01%

12.56%

C

20.23%

14.06%

D+

22.93%

16.67%

D

16.13%

19.78%

E+

31.26%

24.00%

E

36.93%

27.47%

Weighted Average

18.27%

12.73%

Distribution of Defaults (the distribution of time for a loan to default).

The distribution of defaults is calculated using the exponential distribution function as explained by the following function: F(x; λ) = 1 - e-λx.For this function, a value of 0.1 is used for the lambda [λ] value of each Loan Grade (where x is time from loan start). We generated these projections by looking at the λ seen on projected and actual default curves of our own historical defaults as well as comparable international p2p lending platforms.

These returns are an estimate of the total default rate for a given portfolio. We use these calculations as we believe they are currently the most useful way to model bad debts for a given cohort. However, as with many calculations it has limitations, which include:

- The estimate uses a model portfolio and the actual portfolio weight of your Notes are likely to vary from the one shown.

- The calculation is based on estimated bad debt rates and the actual bad debt rates will likely differ.

- The model assumes interest is compounded monthly and assumes losses are compounded for the first 12 months as re-investment occurs.

- It assumes that all funds are fully invested in Notes and does not include any amounts not invested

The calculation assumes that your portfolio is fully diversified, to ensure this is the case, no single Note should make up more than 1% of your portfolio.

Loans by Industry

Projections Disclaimer

The indicated rate[s] of return are hypothetical annual returns. There is no assurance that actual returns will be the same. As you are investing to your own individual portfolio of Notes, actual returns may be higher or lower than estimated. These projections or expectations may be revised for a number of reasons, including if macroeconomic conditions change, and the projected yields and returns will be adjusted to reflect this.

Numerous assumptions have been used by Lending Loop in preparing this statistical information, which may or may not be reflected in the information that is displayed to you. The statistical information should not be construed as legal, tax, investment, financial, or accounting advice. The information is provided as of the dates shown and is subject material change without notice. The information may contain various estimates and actual results or performance may differ materially from those expressed or implied from such estimates. None of the information is or should be relied upon as a warranty, promise, or representation, express or implied, as to the future performance of any loans Any historical information contained in this statistical information is not indicative of future performance.

The indicated rate[s] of return are hypothetical annual returns. There is no assurance that actual returns will be the same. As you are investing to your own individual portfolio of Notes, actual returns may be higher or lower than estimated. These projections or expectations may be revised for a number of reasons, including if macroeconomic conditions change, and the projected yields and returns will be adjusted to reflect this.

Numerous assumptions have been used by Lending Loop in preparing this statistical information, which may or may not be reflected in the information that is displayed to you. The statistical information should not be construed as legal, tax, investment, financial, or accounting advice. The information is provided as of the dates shown and is subject material change without notice. The information may contain various estimates and actual results or performance may differ materially from those expressed or implied from such estimates. None of the information is or should be relied upon as a warranty, promise, or representation, express or implied, as to the future performance of any loans Any historical information contained in this statistical information is not indicative of future performance.

Select a plan and let us do the work

Auto-Lend gives lenders the ability to automate their investment strategy. Lenders can select from a list of preset plans or build their own.

Interested in our estimated net returns?

View our assumptions here.

Balanced

Estimated Net Return

7.3%

*

This plan purchases the following selected notes:

A+

A

B+

B

C+

C

D+

D

E+

E

Conservative

Estimated Net Return

5.6%

*

This plan purchases the following selected notes:

A+

A

B+

B

C+

C

D+

D

E+

E