Pre-Launch Due Diligence
Comprehensive evaluation process before any Market goes live on Port
No Market goes live on Port without completing a comprehensive evaluation process. This process is designed to be rigorous and independent, with multiple layers of evaluation. The scope and focus of due diligence differs based on the counterparty type.
For originators (SCF platforms, fintech lenders, factoring companies, trade finance companies), due diligence focuses on the originator's ability to source, underwrite, and service a portfolio of credit assets on an ongoing basis.
Credit Analysis evaluates the portfolio the originator generates. This includes assessing the creditworthiness of end obligors (the parties owing on receivables or loans), reviewing historical performance through vintage analysis, loss curves, default rates, and recovery rates, stress testing portfolio performance under adverse scenarios such as elevated defaults and economic downturns, and benchmarking the originator and asset class against comparable facilities.
Operational Due Diligence evaluates the originator as a going concern. The review covers underwriting processes, collections infrastructure, technology systems, and personnel. It also examines financial health, capitalization, and the originator's ability to maintain first-loss retention. Servicing capability is assessed across collections infrastructure, dispute resolution, reporting systems, and backup servicing arrangements. Background checks are conducted on key personnel, beneficial owners, sanctions lists, AML, and adverse media.
For trading enterprises (medium-to-large companies in global trade corridors), due diligence focuses on the enterprise's financial strength, trade flow quality, and the creditworthiness of its counterparties.
Credit Analysis evaluates the enterprise and its trade flows. This includes financial health, capitalization, and the ability to maintain equity/first-loss positions and operational obligations. Trade flow verification covers historical trade data, volumes, payment patterns, and concentration risk. Counterparty assessment evaluates the creditworthiness of the enterprise's key buyers and suppliers (the obligors). Stress testing models enterprise performance under adverse scenarios including delayed payments, counterparty defaults, and commodity price movements.
Enterprise Due Diligence evaluates the borrower directly through a business model review covering trade activities, commodities, geographies, trade cycle dynamics, and competitive positioning. Financial audit review covers the enterprise's audited financial statements (minimum two years). Background checks are conducted on key personnel, beneficial owners, sanctions lists, AML, and adverse media.
Common Steps
The following due diligence steps apply equally to originator and trading enterprise Markets.
Third Party Risk Assessment
Every Market undergoes evaluation by an independent, third party risk assessment provider. This assessment evaluates the counterparty, the underlying asset class, and the proposed facility structure, producing a published risk score.
The assessment covers counterparty operational quality (management team, corporate governance, financial health, regulatory compliance, and technology infrastructure), portfolio and trade flow characteristics (historical default rates, recovery rates, obligor concentration, geographic distribution, and asset tenor profile), and structural adequacy (advance rates, tranching, covenants, insurance coverage, and SPV enforceability).
The risk score and supporting assessment are published alongside each Market's documentation, enabling investors to make informed allocation decisions.
Legal & Structural Review
Independent legal counsel reviews the facility agreements governing the lending relationship between the SPV and the counterparty, the enforceability of asset transfers and security interests across relevant jurisdictions (true sale or security interest), the SPV structure including bankruptcy remoteness, corporate governance, and operational independence, and regulatory compliance covering licensing requirements, cross-border considerations, and applicable regulatory frameworks.
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