For Borrowers

Complete guide to borrowing through Coalesce Finance.

Overview

As a borrower, you:

1. Get whitelisted by the protocol
2. Create markets with your terms
3. Borrow from deposited funds
4. Repay by maturity

Key Benefits

Getting Whitelisted

Coalesce Finance is a permissioned lending protocol. Borrowers must be whitelisted before they can create markets and borrow funds. Since loans are unsecured, whitelisting provides lender protection through verified borrower identity, capacity limits, and accountability.

Process

1. Contact the team — Email compliance@coalescefi.com or apply through the website
2. Submit application — We will request documents from you, such as legal entity name, financial statements, etc.
3. Due diligence — The protocol team reviews entity verification, financial health, and risk profile
4. Receive credit maximum — You're assigned a borrowing limit and whitelisted on-chain

Capacity

Your capacity is your maximum borrowing limit across all markets:

Your Capacity: 1,000,000 USDC

Market A created with 500,000 capacity → Available: 500,000
Market B created with 300,000 capacity → Available: 200,000

To increase capacity: demonstrate a track record of on-time repayments, provide updated financials, and submit a request.

After Whitelisting

Once whitelisted you can create markets, set terms, borrow, and repay. You cannot exceed your capacity limit or transfer your whitelist to another wallet.

Creating a Market

Market Parameters

When creating a market, you set:

Steps

1. Connect your whitelisted wallet
2. Go to "Borrower Dashboard" or "Create Loan"
3. Set your interest rate, maturity date, and capacity
4. Review that the rate is sustainable, you can repay by maturity, and capacity fits your needs
5. Click "Create Loan", approve the transaction in your wallet
6. Your loan market is now live — lenders can deposit

What Happens On-Chain

A loan market account and vault (escrow) account are created on-chain to hold the loan market's state and deposited funds.

Multiple Loans

You can create multiple loans with different terms. Each has separate deposits, borrowing, and maturity. Total capacity across all loan markets cannot exceed your whitelist limit.

Creation Errors

Common failures are listed in Error Codes.

Borrowing Funds

You can only borrow what lenders have deposited into your market, up to the market capacity.

Steps

1. Go to "My Markets" and select your market
2. Check the available balance (deposits minus already borrowed)
3. Enter your borrow amount
4. Click "Borrow" and approve the transaction
5. USDC transfers from the vault to your wallet

Partial Borrowing

You don't have to borrow everything at once. You can borrow in increments as needed. Note that interest accrues on all deposited funds at the fixed rate regardless of how much you borrow — borrowing less doesn't reduce the interest owed to lenders, but it does keep more USDC in the vault for their withdrawals.

Tracking Your Obligation

See Protocol Calculations for exact obligation calculations.

Borrow Errors

Common failures are listed in Error Codes.

Repaying

Repaying returns USDC to the market vault, making funds available for lenders to withdraw. You can repay any time — before maturity, at maturity, or even after maturity (which helps lenders through re-settlement).

Steps

1. Go to "My Markets" and select the market
2. View your obligation (principal + accrued interest)
3. Choose full or partial repayment
4. Click "Repay" and approve the transaction
5. Verify the vault balance increased

Repayment Timing

Impact on Settlement

Your repayment directly determines the settlement factor. See Settlement for detailed payout behavior.

Repayment Errors

Common failures are listed in Error Codes.

Risks

You are obligated to repay principal plus interest by maturity. Failure to repay results in a lower settlement factor (lenders lose money), reputation damage, potential capacity reduction, and possible de-whitelisting.

A full list of risks can be found in Risks.

Related

• Interest Accrual
• Settlement
• Re-Settlement
• Whitelisting
• Fees
• Error Codes