Glossary

Knowledge base.

Key private-credit terms — in plain language.

Private credit: Lending to businesses directly, bypassing public markets and bank bonds. Yields exceed bonds and deposits thanks to an illiquidity premium and direct lending; the risks are borrower default and illiquidity.
Trade finance: Financing a specific commercial transaction: a business buys goods, sells them, and repays the loan from the proceeds. The cycle is short (weeks); the loan is backed by the goods, the contract, and the deal’s cash flow.
First-loss capital: Capital that absorbs losses first. At The Dash, the manager’s own capital sits in the first-loss tranche and takes losses before investor capital — aligning interests with money, not promises.
Capital stack: The seniority order of capital in a fund: who is repaid first and who absorbs losses first. Senior tranches sit at the top (repaid first); subordinated tranches sit at the bottom (losses first).
Senior tranche: A priority layer of capital: repaid first and hit by losses last. The Dash’s investors sit in the super-senior tranche.
Subordinated tranche: A lower-priority layer of capital: absorbs losses earlier and is repaid later than senior tranches. The manager’s first-loss capital sits here.
LPA (Limited Partnership Agreement): The agreement a fund operates under: it fixes the distribution order, terms, fees, the parties’ rights, and default procedures. These are the fund’s obligations, as opposed to marketing promises.
Distribution waterfall: The fixed order in which income and capital are distributed: investors first, the manager second. Set in the LPA and independent of any single period’s result.
Illiquidity premium: The extra yield an investor earns for not being able to withdraw capital at will. One reason private credit pays more than liquid instruments.
Collateral: Assets or cash flow that secure a loan. On default, the fund executes collateral per the LPA procedures; this reduces losses but does not guarantee full restoration of the position.
Default: A borrower’s failure to meet loan obligations. The core risk of private credit; reduced by borrower selection and collateral, but not fully removed.
Quarterly distributions: Income payouts to investors — at The Dash, quarterly and in USD. Income can be withdrawn or reinvested.
KYC / AML: Identity-verification (Know Your Customer) and anti-money-laundering procedures an investor completes before signing the LPA and funding.