How Do Rate Bands Work?

Rate bands set a position's yearly rate by the size of its pledge or balance. For example, a debt fund can pay 9% on pledges under $100,000, 9.75% from $100,000, and 10.5% from $250,000. Each position earns the rate for the band it falls in. For a debt investment that is the interest rate on its notes. For an equity investment it is the preferred return rate.

Set Up Bands

1. Open the investment from Investments and click the Investors tab.
2. Click Rate Bands above the positions table. If the investment already has bands, click Edit Bands on the Rate Bands panel.
3. If the investment has more than one class, choose whether the bands apply to the Whole Investment or one class. A class's own bands win over the investment's.
4. Under Band Is Based On, choose Pledge (the amount each investor agreed to invest) or Current Balance (capital that cleared, less capital returned).
5. Choose the Starts On date.
6. Enter each band's starting amount and Annual Rate. The first band always starts at $0, and the last band has no maximum. Click Add Band for more.
7. Check the Preview. It shows how many positions land in each band, which positions change rate, and how each one's next payout changes.
8. Enter a Reason or Agreement Reference, tick These Bands Match the Investors’ Agreed Terms, and click Save Rate Bands.

A pledge of exactly $100,000 is in the band that starts at $100,000.

When a Position Changes Size

When a pledge changes (a top-up or an approved pledge change), or, for balance bands, when a payment in or a capital return posts, the position moves to its new band from that day. The next payout prorates by day: days before the change earn the old rate and days after earn the new one. Syndelo records each move in the change history.

Investor Overrides Still Win

A rate set for one investor with Schedule Rate (on the Investment Transfers & Investor Rates panel) wins over bands from its start date. The positions table labels it Override, and the bands preview shows it staying in place. See Transfer an Investor's Position.

Good to Know

• Bands can't start before a period already approved for payout. The Starts On field shows the earliest date allowed.
• Saving bands follows the same rules as an investor rate: someone who can prepare payouts saves them, and each version is kept with its reason and who saved it.
• To stop using bands, open the editor, click Remove Bands, and save. Positions go back to the class rate from that date. Overrides stay.
• Notes keep their own rate until bands start, then follow the band. Amortizing notes keep a fixed rate.
• The positions table shows each position's current rate with its band, for example 9.75% Band 2.