In short
From one of two places. Either the lender is lending their own capital — a person or a business with money, lending it directly — or they are lending capital placed with them by other people, which is how most organised private lending works. In the second case the chain is short and should be visible: an individual provides capital, a registered credit provider grants the credit and administers the agreements, a borrower repays with interest, and the interest flows back. If an operator cannot draw you that chain in four steps, that is the answer to your question.
01 — The two sources
There are only two sources, really
Own capital. A person or a company with money lends it out directly. This is the oldest form — the individual with cash who lends against a property, the business that extends terms to a customer. It is straightforward and it is limited by how much the lender has.
Placed capital. Individuals provide capital to an organisation, and that organisation lends it to borrowers. This is how lending scales beyond one person’s balance sheet, and it is what most people mean when they talk about private lending as something you can participate in.
A bank is the same idea at national scale and under a different licence: depositors provide the money, the bank lends it on, the bank keeps the spread and pays depositors a rate. Nobody finds that mysterious. Private lending has the same shape with a different borrower class, a different return, and no deposit guarantee.
The useful frame
Money does not appear. In any lending arrangement, somebody supplied the capital and somebody is repaying it. Being able to name both is the whole of the diligence.
02 — The chain
The chain, step by step
In an organised arrangement there are four roles. They are sometimes held by the same group of companies and sometimes by different ones, but they are always all present, and each should be nameable.
| Who | What they do | |
|---|---|---|
| Capital | You, or another individual | Provides the money, for a term, at an agreed rate |
| Credit provider | A registered organisation | Grants the credit, holds the NCRCP registration, administers |
| Borrower | The defined borrower class | Uses the money and repays it with interest |
| Distribution | A platform or consultant | Explains the arrangement and introduces clients |
The reason to insist on all four being named is that the failures in this market are almost always a missing link. Capital that goes to an entity which does not lend it anywhere; a “lender” with no identifiable borrower; a return paid out of new capital rather than out of repayments. Each of those is visible the moment you ask who is repaying and where the money physically sits.
03 — The borrower
Who is actually borrowing it
The most useful question, and the least asked. A lending return is a repayment, so who repays determines everything about whether the arrangement works.
A defined borrower class — a specific type of borrower with a specific reason to need money and a specific way of repaying — is a much better answer than a general one. “Businesses” tells you nothing. “Community schemes recovering arrear levies” tells you what the debt is, why it exists, and where the repayment comes from.
- Who are they? A named class, not a category.
- Why do they need the money? There should be a specific, repeatable reason.
- How do they repay? From what income, on what schedule.
- What happens if they do not? What security exists, and who enforces it.
04 — The failures
What a broken chain looks like
Every well-known failure in lending is a missing link in the chain above, and each one is visible to a person who asks the four questions rather than reading the brochure. It is worth knowing what each looks like from the outside, because they do not announce themselves.
- No identifiable borrower. Capital is taken, a return is promised, and nobody can say who is repaying it or why. If the money is not lent to someone who needs it, the return has to come from somewhere else — and the only other place it can come from is the next person’s capital.
- No registered credit provider. An operator granting credit to consumers without registration is operating outside the National Credit Act, and the agreements may be unlawful. The NCRCP number takes two minutes to check and the absence of one is decisive.
- Returns that do not move. Lending returns are tied to the cost of money. A rate that never changes while the repo rate moves repeatedly is either fixed by agreement — which should be stated — or it is not coming from lending.
- Pressure and secrecy. Urgency to commit, reluctance to put the structure in writing, or an explanation that becomes vaguer the more precisely you ask. An orthodox arrangement gets clearer under questioning, not hazier.
None of these requires financial expertise to spot. They require the willingness to ask a plain question twice and to notice whether the second answer matches the first.
05 — Where ProLend fits
Where ProLend fits
ProLend is the distribution link in the chain above and nothing else. It does not hold capital, it does not lend, and it does not grant credit. Its job is to explain the arrangements and to introduce clients to them.
The credit provider link is BC Funding Solutions (Pty) Ltd, registered with the National Credit Regulator under NCRCP 11132 and licensed as FSP 55147. The capital link is the individuals who place capital. The borrower link is the class those loans are made to.
Four roles, four names, checkable. That is the standard worth holding any operator to, including this one.