Net Return on Deployment
Net return on deployment is the effective return earned on deployed capital after accounting for the cost of the policy loan used to fund the deployment. It is calculated as the deployment's return rate minus the policy loan rate — this difference is commonly called the spread.
For example, if you deploy capital into a real estate project earning 8% and the policy loan rate is 5%, the net return on deployment is 3%.
Net return on deployment is one metric among several for evaluating how capital is working within your banking system. It reflects the incremental return generated above the cost of accessing your capital.
Net return is a single data point — not the sole measure of a deployment's value. Capital velocity (how quickly capital cycles through the system) and repayment discipline (how consistently you restore capital to your policies) are equally important considerations.
In Policy Stack, net return on deployment is calculated automatically when you enter both the deployment return rate and the policy loan rate. It appears on deployment detail pages and in the deployment summary on your dashboard.
This figure is based on the rates you have recorded. It does not account for taxes, fees, or other external costs that may affect your actual economic outcome.
Related terms: Spread, Capital Deployment, Capital Velocity, Net Return