What are the risk categories?
Walliance evaluates each project and assigns it a specific risk category. Below is the rating scale (the risk class), alongside the scoring value (the numerical value calculated by the algorithm), according to Walliance's risk management system.
Rating scale
Class | Score | Result |
AAA | 0-5 | very low risk |
AA | 5,1-10 | low risk |
A | 10,1-15 | moderate-low risk |
BBB | 15,1-20 | medium risk |
BB | 20,1-25 | medium-high risk |
B | 25,1-30 | high risk |
CCC | 30,1-35 | very high risk |
CC | 35,1-40 | critical risk |
C | >40 | extreme risk |
In compliance with Art. 20, paragraph 1, of Regulation (EU) 2020/1503 and Delegated Regulation (EU) 2022/2115, Walliance publishes both the actual Default Rate and the expected Default Rate for all loans promoted on the platform. Rates are categorized by risk level according to Walliance’s risk management system classification and consider the class assigned to each loan as of the publication date.
Please note that for all projects evaluated and published prior to July 27, 2026, assignment to the different risk categories was based on indices provided by Modefinance or other rating agencies.
How is the score calculated?
The risk score calculation is automated through a three-step process. The system converts project metrics into scores from 1 to 5 across seven specific indicators.
Each score generates "risk points" proportional to the weight of the indicator: the closer the total sum of risk points is to zero, the higher the final rating assigned to the project will be (up to a maximum of AAA).
1. Mapping Key Factors and Assigning Scores (from 1 to 5)
The system considers 7 indicators, both financial/economic and project-related. For each indicator, the system assigns a score ranging from 1 to 5:
1 represents the minimum risk scenario;
5 represents the maximum risk scenario.
Description of the 7 Indicators:
Objective composite score (25% weight) |
Income Statement KPI score (20% weight) Evaluates the sustainability and financial balance of the business plan by analyzing the project’s forecast profitability, revenue structure, and cost framework. |
Loan to Cost (15% weight) Measures the proportion of funding requested through the crowdfunding offer on Walliance relative to the total cost of the operation. The lower the percentage, the less dependent the project is on the capital raised. |
Loan to Value (10% weight) Compares the requested financing amount to the estimated market value of the property (or completed project). It measures the asset coverage securing the operation. |
Exit Debt Coverage (10% weight) Measures the ability of the cash flows generated by the project to repay and cover the debt incurred upon completion. |
Profit on Cost (10% weight) Represents the expected profit margin calculated relative to the total costs incurred to complete the project. |
Objective Market Outcome (10% weight) Measures the commercial attractiveness of the real estate development based on target market data (e.g., local absorption rate, price per square meter, pre-sales level, or property type appeal). |
2. Converting the Score (from 1 to 5) into "Risk Points"
Once the score for each indicator is obtained, the system converts that value into "risk points" using a specific mathematical formula:
[(Score – 1) / 4] × Indicator Weight
As a result:
If an indicator receives a score of 1 (minimum risk), it generates 0 risk points.
If it receives a score of 5 (maximum risk), it accounts for the full weight percentage assigned to that indicator (e.g., the Objective Composite Score can account for up to 25 points, the Income Statement KPIs up to 20 points, and so on).
3. Calculating the Total Score and Assigning the Rating Class
The risk points calculated for each of the 7 indicators are added together to determine the overall risk score. Based on this total value, the system assigns the project its corresponding rating class. Since the model measures the level of risk, the lower the accumulated total score, the better the rating assigned to the project (with the AAA level reserved for the lowest scores).
Credit Risk Assessment
The credit risk assessment is formalized by assigning each project a specific risk category in accordance with the model described above.
To ensure greater accuracy, Walliance complements its internal reviews with verifications conducted by third-party partners. Specifically, it uses Cerved services to analyze corporate history, identify any negative records or liens, and capture any additional relevant information.
In the event of a technical unavailability of the internal model, or whenever deemed appropriate to supplement and reinforce its assessments, Walliance may also rely on credit ratings provided by Modefinance.
Note that the creditworthiness assessments described herein do not constitute credit ratings issued in accordance with EU Regulation 1060/2009 as amended.
Minimum eligibility threshold
To maintain a high and uniform quality standard across published offers, projects that reach a rating class of "B" or higher, determined by the internal risk management model or, in specific cases, by the rating issued by Modefinance, are eligible for the platform. Any exceptions to this minimum threshold will be exceptional in nature and supported by detailed justification.