The $5 Million Question
Building this requires hiring engineers who understand both Python and UCC Article 12. Level 3 asset valuation methodology. Control architecture for digital asset perfection. Custody integrations with brokerages and crypto exchanges. Compliance documentation for True Lender, Model Risk, and Fair Lending. Your institution could build all of it. The question is whether you should.
$3-5M first year, then what?
...assuming you can hire engineers with UCC expertise, your legal team understands Article 12 control requirements, custodians return your calls for API access negotiations, and nothing else demands your resources and attention for a few years.
Institutions with $50B+ in assets, dedicated fintech subsidiaries, and strategic commitment to own this infrastructure permanently. If you're reading this page, that's probably not you.
SaaS license + per-loan fees
Flat-rate document fee plus real-time collateral monitoring per active loan. No origination fee. No points. No revenue share draining the economics. Your institution captures all lending economics.
Credit unions and community banks that want to serve members with modern wealth without diverting engineering resources from core systems. Deploy in weeks, not years. Focus on lending, not infrastructure.
What you'd actually have to build
Pledged-asset lending requires more than software. It is valuation methodology, legal infrastructure, custody relationships, and compliance architecture wrapped in technology.
Valuation methodology for Level 3 assets
ASC 820 fair value hierarchy places LP interests, private company stock, and tokenized securities in Level 3: significant unobservable inputs. You need defensible methodology. Multi-source data fusion, asset-specific risk models, explainable outputs, and continuous calibration.
UCC Article 12 control architecture
Article 12 uses control, not filing, as the basis for perfection. Control requires technical architecture that enables a secured party to exercise exclusive power over controllable electronic records. Actual system capability is required. 33 jurisdictions have enacted it. The legal framework exists. Building compliant control infrastructure is the hard part.
Custody integrations across asset classes
Schwab, Fidelity, and Vanguard for traditional securities. Coinbase, Gemini, and BitGo for digital assets. Carta and Computershare for private company stock. Each requires separate negotiation, security review, and ongoing maintenance. Getting API access is not a checkbox; it is a relationship.
Compliance infrastructure
True Lender documentation structure for 6 states with explicit statutory tests. OCC 2011-12 model risk management for valuation models. NCUA Letter 18-CU-03 alignment for third-party risk. Fair lending analysis and adverse action documentation. Your legal team will spend months on frameworks alone.
Perfection automation across UCC articles
Article 8 for investment property. Article 9 for general intangibles. Article 12 for controllable electronic records. Different assets require different perfection paths. Debtor validation, jurisdiction determination, collateral description, and continuation tracking. Five-year expiration windows. Automated filing through CT Corporation and CSC.
Smart contract orchestration
Multi-party agreements with atomic execution guarantees. Control agreements that automatically satisfy Article 12 requirements. Margin call triggers with pre-wired liquidation pathways. Legal documents that execute themselves when conditions are met.