Executive Risk Briefing: YouLend

Audited Turnover & Result: 171,530,000 • Operating Result: 30,635,000 • Net Result: 8,837,000

Wholesale / Senior Debt Facilities: Total borrowings are £343,440,000 (Note 17). Facilities include senior loan notes and other loans provided by related parties under common control (BC Midco Pte. Ltd. and EQT AB group entities). These borrowings are secured by fixed charges over the assets of the Company and by fixed and floating charges over assets held in YL VII Limited and YL III Limited. Some related party loans totaling £146,049,000 are repayable in December 2027, while others are repayable on demand.

Statutory Audit Note Disclosure: Credit risk: The Group's main income-generating activity is lending to merchants (primary borrowers), making credit risk a principal risk. This risk is tied to the underlying borrowers' ability to repay, which is dependent on sales-based repayments, making the Group sensitive to negative macroeconomic developments affecting the SME segment (Strategic Report, Note 18). Customer Default Risk: The Group's ECL model defines a default event as an outstanding balance past the legal maturity date, unless the obligor is still active. Most defaulted accounts are sold and written off (Note 18). Merchant Settlement Risk: Implied by the dependence on 'sales-based repayments' and 'repayment patterns linked to merchant activity' (Strategic Report, Note 18). Chargeback Exposures: Not specifically disclosed. Credit Concentration Risk: Significant concentration in lending activities 'primarily focused on providing financing to merchants operating within the retail sector'. Geographic concentration is high, with approximately '80% of the Group's merchants based in the UK', making the portfolio sensitive to UK-specific economic factors, market conditions, and regulatory environments (Note 18). Liquidity Risk: The Group faces the risk of not being able to meet financial obligations or doing so at excessive cost, particularly due to high-volume, short-term loans with variable repayment patterns. Effective liquidity management is crucial to handle potential timing mismatches between loan disbursements, operational needs, and cash inflows (Note 18).