$250m credit facility announced by Patch of Land

By George Popescu, CrowdFundBeat Guest post, Patch of Land (PatchofLand.com), a marketplace lender for real-estate, announced today the signing of a $250m lending facility from an undisclosed credit fund.

Picture Courtesy of Patch of Land

Picture Courtesy of Patch of Land

Patch of Land was founded in October 2013 and offers real-estate secured short-term loans in a true peer-to-peer model. The company has funded about 200 projects to date. Since founding the company has collected more than $20M in principal and interest payments without any defaults. The average blended rate of return to investors is about 12%.

Selection bias ?
This large capital facility of sophisticated money validate’s Patch Of Land’s model. It will also allow for faster growth as it will enable the company to focus more on customer acquisition. In addition it will allow Patch of Land a quicker deal closing which may be an advantage when competing for the same customers with other online marketplace real-estate lenders.

By offering a real-estate collateral Patch of Land may appear as a better trade-off in cost vs reward for lenders. However one wanders given the high-cost of the capital on their platform why aren’t their borrowers able to access much cheaper capital at traditional lenders ? And therefore, is there is a selection-bias where online marketplace real-estate borrowers are only those customers who are unable get access to traditional funding ?

Arbitrary real-estate lending rules in tare real reason
On the other side post the 2008 crisis the traditional real estate funding sources have restricted themselves to extremely strict rules which are often arbitrary. As a result many very-interesting real-estate projects can not find financing because they break such a rule. For example it appears that operators who focus on short term investments in which they purchase a property, renovate it and sell it back, can not obtain more then 9 loans at a time from a bank. When these operators work on projects that offer a 20% IRR in less then 1 year, it makes sense for them to borrow at 15% percent interest for 6 months .

According to our information the online marketplace real-estate lending represents $1.5b in total origination in 2015. We expect this section of marketplace lending to be the fastest growing in 2016. The limiting factor of the sector growth seems to be the lack of transparency of the platform’s data in general as seen here where the name of the credit fund providing the $250m facility was not disclosed.

source:

http://lending-times.com/250m-credit-facility-announced-by-patch-of-land/

Tags: , , , , , ,

nov2017-fintech confernce-dc

HEADLINE NEWS

The HinduCrowdfunding to save endangered parrotThe HinduAustralian researchers have turned to crowdfunding to help bankroll a new technology to save the critically endangered swift parrot from extinction in the island state of Tasmania. Scientists from the Australian National Universi [...]

Former Blink 182 Guitarist Crowdfunding Spaceship - The OnionThe Onion (satire)UFO enthusiast and Blink 182 co-founder Tom DeLonge is crowdfunding a “public benefit corporation” whose first project is a proposed intergalactic spaceship.and more » [...]

San Francisco ChronicleCrowdfunding sites raise millions for fire recovery but stir controversySan Francisco Chronicle“Crowdfunding has proven to be a remarkably powerful, fast, effective way to rally a community struck by hardship to raise much-needed relief for victims,” said Dan Sa [...]

Business Insider Nordic (blog)The 11 coolest crowdfunding hits in the Nordics 2017Business Insider Nordic (blog)In crowdfunding, there really are no limits. With the public deciding what flies and what doesn't, platforms such as Kickstarter and Indiegogo give tech enthusiasts a c [...]

ForbesThe Recipes For Crowdfunding Success On Kickstarter -- And What To AvoidForbesConversely, how should we analyze the crowdfunding flops like the Cuppress, a coffee capsule sealing machine which is both economical and user-friendly? Too little is known about the recipes for a succ [...]

The MercuryHobart's Carols by Candlelight organisers ExitLeft have today launched a crowd-funding campaign for this year's eventThe MercuryManaging director Ian Williams announced today the business would launch an online crowd-funding campaign aimed at raising $150,000 to s [...]

Entrepreneur'Don't Go Dark' and Other Crowdfunding Mistakes to Avoid From Indiegogo's Slava RubinEntrepreneurWhen it comes to creating a successful crowdfunding campaign, entrepreneurs make a number of common mistakes. Luckily, Indiegogo co-founder Slava Rubin has [...]

LoudwireTom DeLonge Launches Crowdfunding Campaign for SpaceshipLoudwireTom DeLonge's To the Stars Academy has launched a new crowdfunding site that includes their goals of building a spaceship to further investigate UFOs.Former Blink-182 Member Tom DeLonge Is Crowdfunding a Spac [...]

The AdvertiserMcLeod's Daughters reboot scrapped, but creator Posie Graeme-Evans is considering crowd-fundingThe Advertiser“Would I think of crowd-funding a possible sequel? Deep breath. Yes,” she wrote in post on her Facebook page. McLeod's Daughters creator and writer Posi [...]

The Hill (blog)Crowdfunding campaign for fallen US soldier's children raises more than $600kThe Hill (blog)An online crowdfunding campaign to pay for the college education of the children of a U.S. solider killed in Niger has surpassed $600,000 as of Saturday. The Sgt. La David T [...]

CFB Finance

Syml
Lst Val
+/- Val
+/- %

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

CrowdFund Beat Media

lnkd.in/gXvUdRw On November 6th & 7th 2017, global thought leaders will convene at the 2020 #Fintech at Nati…lnkd.in/gQ62iJ5

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |