The second element is that the money raised by the company from the 50 basis point service fees and from the upfront payment of the NPV of the margin of each loan it issues, will be held in a cash reserve to form a cash buffer. Should the company ever issue any loans, the cash reserve will quickly reach a substantial size thereby boosting the resources of the company. The cash reserve is there to cover shortfalls in payment to holders of funding instruments and it will only be distributed back to guarantors when the company has fulfilled its purpose and been dissolved. The cash reserve must be invested in high quality liquid debt instruments. The company will, in the event of a delay or failure to pay by a borrower, first make a demand on the guarantee from each guarantor. If that does not cover the due payment on the funding instrument, then the cash reserve can be used.

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