How the Secondary Market Works

Crowdlending has one structural inconvenience that no amount of good project selection removes: when you fund a loan, your money is committed until the borrower repays it. For most investors, most of the time, that is fine, and planning around it is exactly what the three decisions in Your First 30 Days on CrowdHive are for. But circumstances change, and a portfolio tool that assumes they never do is incomplete.

That is what the secondary market is for. It lets you offer your existing investments to other CrowdHive investors instead of holding them to maturity, and it lets you buy positions that other investors have listed. This article explains how it works mechanically, what it costs, and, more important than either, what it does not promise.

Selling: how a listing works

When you list a position, you choose the price. Three options, each with an honest reason to exist:

• At face value. You want your capital back without taking a loss, and you are prepared to wait for a buyer who finds the position attractive as it stands.
• At a discount. You want to sell faster, and you are paying for speed by accepting less than the face value of your claim. This is not a failure; it is a price for liquidity, and knowing that in advance is what makes it a decision rather than a surprise.
• At a premium. Your position carries terms a buyer might reasonably pay extra for, and you are willing to wait to find out whether anyone agrees.

Other investors see your listing alongside the project's key details, the remaining term and the yield. When someone buys it, the claim transfers to them and the sale proceeds are credited to your CrowdHive wallet, from which you can reinvest or withdraw. Interest accrued up to the transfer date is settled as shown on the listing page, so neither side needs to negotiate over who earned which days.

Until the moment someone buys, the listing is yours to manage: a position that has not sold can be delisted, and it simply goes back to being an ordinary holding that collects repayments.

Buying: the same market from the other side

Buying works the same way in reverse. You browse listed positions, compare the remaining term and the effective yield at the asking price, and purchase directly from your wallet balance.

Secondary listings can be genuinely useful to a buyer: shorter remaining terms than anything on the primary market, entry into funded projects that are no longer open, and occasionally a discount that improves the effective yield. But a listed position deserves exactly the review a new project does, and one question on top: the price. A discount is only attractive if the underlying loan is sound, and a premium is only acceptable if the terms justify it. The checklist in Reading a Project Card applies unchanged; the seller's asking price is an opinion, not an assessment.

One thing the secondary market does not tell you is why the seller is selling. It could be their liquidity need; it could be their view of the loan. You cannot know, which is precisely why your own reading of the project documentation has to carry the decision.

What it costs

A 1.5% secondary market fee applies to the transaction. That is the explicit cost. The implicit cost, for a seller, is any discount accepted to find a buyer faster, and the implicit cost for a buyer is any premium paid. All three belong in the same mental column when you decide whether a trade makes sense, and the fee alone is a reason not to treat the secondary market as a place for frequent small adjustments. It is a tool for meaningful portfolio decisions, not for fidgeting.

How this fee sits alongside the platform's other costs, including the ones that are not fees, such as cash drag, is covered in Fees, Bonuses and Referrals.

What it does not promise

This is the section to read twice.

A listing sells only if another investor chooses to buy it. There is no market maker and no buyback. Selling before maturity is possible, not guaranteed, and in exactly the situations where many investors want to exit at once, a troubled project, a nervous market, buyers are scarcest and discounts deepest. The secondary market is a liquidity option, not a liquidity promise, and money that may be needed on a known date should not be lent on the assumption that the option will be there at an acceptable price.

Selling does not undo risk already taken. A position in a struggling loan does not become a good position because you can list it; the market price of that listing will say what buyers think it is worth. The time to manage risk is before funding, through diversification and grade discipline, not afterwards through the exit queue.

Availability may change. The secondary market is provided under the General Terms and Conditions, and its availability is not a contractual constant of the platform. Build your plan so that holding to maturity is the default you are comfortable with, and early exit is a convenience when it works.

Where it fits in a sensible portfolio

Used well, the secondary market solves real problems: an unexpected need for cash, a deliberate rebalancing, an exit from a concentration you should not have built in the first place. Used badly, it becomes a way to churn a portfolio at 1.5% per trade while convincing yourself the money was never really committed.

The practical rules are short. Lend only money you can leave committed until maturity, so that any sale is a choice rather than a necessity. If you do list, price with a purpose: face value if you can wait, a discount sized to how much you cannot. If you buy, judge the loan first and the price second. And let Auto-Invest handle the routine re-deployment of repayments, so the secondary market is reserved for the decisions that actually need it.

Capital at risk, on both sides of every listing. The secondary market changes when you can exit a loan. It does not change what the loan is.

---

CrowdHive is a crowdlending platform operated by BellaVista Invest One AG (UID CHE-373.552.596), Zug, Switzerland, affiliated with the SRO VQF and supervised under Article 24 AMLA in respect of its anti-money-laundering obligations. CrowdHive is not a bank, balances are not covered by esisuisse or any depositor protection scheme, and lending involves the risk of partial or total loss of capital. The secondary market is provided under the General Terms and Conditions and its availability may change; selling before maturity is not guaranteed. Fee terms apply as published. Nothing in this article is investment advice or a personal recommendation.