# How does it work?
There are 3 primary components that make Sweepmax work. Mortgage contract, Flashloan and Drops lending pools. Although there are multiple steps involved, an NFT is financed in 1 transaction.
Financing starts with minting a Mortgage NFT, an account contract that enables loan tokenization. Each borrower mints private, isolated Mortgage contract.
In the next step, the borrower provides a down payment for NFTs, which is combined with a flashloan to buy the NFT from the marketplace. The purchased NFT then gets used as a collateral at Drops lending pool.
The last step is repaying the flashloan, which is done by borrowing funds from the pool and sending to the flashloan provider which is currently DyDx.
Now the Mortgage NFT holds dNFT tokens and the user can transfer it, sell Mortgage NFT, or repay the loan and withdraw NFT.
**Liquidation**
In case the borrow limit gets exceeded, the loan position becomes available to be liquidated by anyone. The borrow limit is usually 30-60% of NFT floor’s value.
Once the limit is exceeded, anyone can repay the debt and seize collateral. If the debt is lower than the NFT floor value and fees, then the borrower gets to keep the remainder in ETH.
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