Figure Markets launches tokenized small business loans with 8–12% APY on Provenance Blockchain. This move signals a major shift in how real-world credit is offered to investors seeking yield and transparency in an evolving digital financial landscape. These tokenized instruments promise fixed-income exposure, blockchain-powered liquidity, and near-instant settlement, transforming the traditionally illiquid small business loan market into an investable, tradable asset class.
In a market shaped by inflation, tightening credit conditions, and institutional thirst for returns, Figure’s offering enables retail and accredited investors to participate in real-world assets historically limited to banks and private lenders. Leveraging Provenance Blockchain’s infrastructure, Figure Markets combines regulatory compliance with decentralized technology to create a product offering real economic value with verifiable transparency. The 8–12% annual percentage yield (APY) comes from short-duration small business loans, offering not only income but also the ability to trade or exit positions on a secondary market.
What Is Figure Markets & Provenance Blockchain?
Figure Markets is a digital investment platform built to tokenize real-world financial products, such as small business loans, home equity lines of credit, and private equity funds. It is a spin-off of Figure Technologies, a fintech company known for pioneering blockchain-based lending products. The platform enables users to invest, trade, and manage portfolios of tokenized credit assets. These assets are recorded and settled on Provenance Blockchain.
Provenance Blockchain is a public-permissioned layer-1 blockchain specifically developed for financial services. It offers near-instant transaction finality, smart contract automation, and compliance-ready infrastructure. With over $15 billion in real-world assets processed, it has become a backbone for institutions seeking scalable, transparent digital finance operations. It supports functions like smart contracts, security token issuance, and identity management, which are vital for managing regulatory obligations and investor protections.
Figure Markets, operating on Provenance, delivers regulated access to tokenized securities under U.S. SEC frameworks. It integrates digital identity, real-time auditability, and programmable compliance, ensuring secure and legally robust asset transactions.
Understanding Tokenized Small Business Loans
Tokenized small business loans are digital representations of real-world credit extended to business borrowers. These loans are originated by Figure and fractionalized into digital securities—tokens—that represent claims on principal and interest payments.
Once tokenized, the loan assets become available for investors to purchase. Each token reflects a portion of the underlying loan’s cash flow. Investors earn yield—typically 8 to 12 percent APY—by holding these tokens, receiving monthly or quarterly distributions depending on the loan agreement. The use of Provenance Blockchain ensures each loan’s origination, servicing, and repayment is immutably recorded and independently auditable.
The tokens are structured as security entitlements under U.S. regulations, meaning they are compliant with federal securities law. Each investor’s ownership is custodied in a secure digital wallet protected by MPC (multi-party computation) cryptographic keys, allowing for both investor self-custody and compliance oversight.
Figure’s tokenization model allows for real-time settlement, meaning token purchases, interest accrual, and loan repayments are settled in seconds rather than days. This significantly reduces counterparty risk and processing delays.
Emerging Investor Strategies
Investors are increasingly deploying sophisticated strategies to capitalize on tokenized credit markets. Some are using these instruments to hedge portfolio volatility, while others integrate them into cash management strategies to boost liquidity returns. Portfolio managers are designing laddered maturity structures, allocating capital to short-term and medium-term loan pools to optimize reinvestment rates while minimizing duration risk.
Additionally, institutional allocators such as pension funds and endowments are exploring tokenized loans as part of alternative fixed-income portfolios. They benefit from higher yields compared to traditional corporate bonds, alongside operational efficiencies enabled by blockchain technology. These institutions conduct thorough due diligence, including smart contract audits, counterparty risk assessments, and collateral verification to ensure compliance with fiduciary obligations.
Benefits for Fixed-Income Investors
Tokenized small business loans offer unique advantages to fixed-income investors seeking yield, transparency, and control over their portfolio.
These assets provide a high-yield alternative to traditional bonds or savings instruments, offering 8–12% APY in a market where many bond yields remain under 5%. The income comes from credit extended to small businesses vetted by Figure’s underwriting system, based on real-time borrower data and creditworthiness assessments.
Liquidity is another key feature. Unlike traditional loans or private credit funds, these tokens can be traded on the secondary market through Figure Connect. This enables investors to exit positions before loan maturity—providing flexibility rarely seen in private credit markets.
Blockchain transparency is critical. Investors can verify loan-level data, borrower history, payment performance, and even Figure’s servicing record—all recorded on Provenance Blockchain. This offers an unprecedented level of visibility into portfolio risk and return.
The blockchain infrastructure also reduces fees associated with intermediaries like custodians, brokers, or transfer agents. By minimizing costs, investors retain more of the yield generated by the underlying credit.
Additionally, because the platform supports fractional ownership, investors can build diversified credit portfolios with modest capital allocations, spreading risk across dozens of business borrowers.
Market Outlook and Future Trends
Looking ahead, the growth trajectory for tokenized lending markets appears strong. Analysts expect global tokenized credit markets to surpass $1 trillion by 2030, driven by technological advances, evolving regulations, and demand for alternative yields. Figure Markets plans to expand its offerings to include equipment financing, invoice factoring, and commercial real estate loans—each tokenized for investor access.
Further integration with decentralized finance (DeFi) protocols may unlock new use cases. For instance, tokenized small business loans could become collateral in DeFi lending pools, enabling composability with other blockchain-native products. This could transform risk management, liquidity provision, and capital allocation strategies across both retail and institutional finance.
Use Cases and Market Applications
Tokenized small business loans are being used by a range of investor classes. Retail investors gain access to fixed-income yield opportunities once exclusive to private banks. Accredited investors diversify credit exposure across hundreds of loan pools. Family offices and hedge funds use these instruments to earn short-term returns with enhanced visibility.
Businesses benefit too. Small companies access funding faster and cheaper than through traditional banking channels. Tokenization enables more efficient capital markets, reduces underwriting delays, and opens up broader investor participation.
Risks and Due Diligence Considerations
Credit Risk
Investors must evaluate the credit quality of the loan pools. If small businesses default, investors may face delayed or reduced payments. Figure’s underwriting process uses real-time data but cannot eliminate risk. Always review the loan-level documentation.
Liquidity Risk
While tokenized assets can be traded on Figure Connect, market depth may vary. Secondary liquidity is not guaranteed. Selling tokens before maturity may result in discounts, depending on demand.
Regulatory and Custody Risk
Although Figure complies with SEC regulations and uses regulated broker-dealers and custodians, the legal frameworks around digital securities continue evolving. Investors should ensure they understand their rights and the protections provided.
Smart Contract and Tech Risk
Even on Provenance Blockchain, bugs in smart contracts or custodial errors could affect ownership or payments. However, the system uses MPC wallet security and hardened protocols to reduce this risk.
How to Participate
To participate, investors must open an account on Figure Markets. Verification includes Know Your Customer and Accredited Investor checks. Once approved, users access an investment dashboard showing available small business loan pools.
Each loan pool lists loan duration, borrower info, expected APY, and risk ratings. Investors select desired pools, fund them in USD or USDC, and receive digital tokens in their wallet.
Returns accrue automatically. Distributions are made monthly or quarterly, depending on pool structure. Tokens can be sold or transferred via Figure Connect, the platform’s secondary market.
How It Compares: Traditional vs. Tokenized Lending
Traditional lending channels include banks, SBA lenders, and private credit funds. These models involve high friction, slow disbursement, opaque borrower data, and poor investor liquidity.
Figure’s model is real-time, digital, and transparent. Tokenized small business loans offer faster access to yield, immutable audit trails, and lower fees. Most importantly, they open a private credit market to global retail and institutional investors.
Figure Markets launches tokenized small business loans with 8–12% APY on Provenance Blockchain. This offers a compelling intersection of yield and innovation. It delivers transparency, speed, and accessibility through blockchain automation. Investors can access high-yield returns previously limited to institutional players, now available with fractional ownership and real-time auditability.
The platform’s backing by SEC oversight, MPC custody and robust compliance adds further confidence. Figure’s recent triumph—a $355 million blockchain-based securitization earning S&P AAA ratings—is a landmark validation for institutional-grade blockchain finance and the Provenance network. This milestone underscores both credibility and scalability.
Still, risks remain. Credit, liquidity, smart contract vulnerabilities and regulatory shifts warrant careful analysis. Investors must review loan pool quality, platform security and legal structure before committing.
If you’re seeking fixed-income clarity with stronger yields, tokenized small business loans deserve serious consideration. Monitor Figure’s offerings, track platform updates, and weigh these opportunities against your portfolio goals. In a world hungry for yield and transparency, this model bridges DeFi innovation and real-world results.
