$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: , , , , , ,

HEADLINE NEWS

Daily MailNick Clegg crowdfunding former Deputy PM appeals donations ...Daily MailLib Dem MP Nick Cleg is 'crowdfunding' to help bankroll the publication of thousands of party leaflets for canvassing ahead of the re-election bid in Sheffield ...and more » [...]

OregonLive.comCrowdfunding efforts for Portland stabbing victims top $700000 in less than 48 hoursOregonLive.comThe crowdfunding campaigns sprang up soon after news reports spread of the attack. Two are designed to help all three families with medical costs and to alleviate any financ [...]

Android Authority (blog)Crowdfunding project of the week: BIKI is an underwater drone that ...Android Authority (blog)Drones are fun, but they can only move through air. We know plenty of you prefer to go underwater. If so, BIKI is for you.and more » [...]

Hall alone in vote against rape kit crowdfundingRockwall County Herald Banner“Rape kit testing is far too important to rely on an undependable funding source like crowdfunding. This is a core function of government and as such it should be funded by government. Victims deserve to know [...]

Virginia Tech launches its own crowdfunding site to reach new generation of donorsRoanoke TimesOne of the first four pilot projects that went live on Jump, Tech's crowdfunding website, lets users pay for as little as one local child to attend educational programming by the Moss A [...]

New York MagazineFacebook Rolls Out Crowdfunding to EveryoneNew York MagazineDepending on your perspective, the rise in popularity of crowdfunding is either a fantastic new way that the internet lets strangers help each other out, or emblematic of the decay of institutional safeguards [...]

Youris.comCrowdfunding boosts green powerYouris.comWith state subsidies falling, crowdfunding platforms are increasingly stepping in to help make green power projects a reality. For individual investors, injecting anything from a few euros to hundreds of thousands, they are a tangiabl [...]

Tech City NewsWhy are more and more tech firms turning to crowdfunding?Tech City NewsWhen Facebook bought virtual reality firm Oculus VR for £2bn (£1.3m) in 2014, the crowdfunding world looked on with amazement. Oculus, founded in California in 2012, had raised its crucial first $2m o [...]

Crowdfund InsiderResearch on Risk Shows Crowdfunding Has Significant Fraud Immunity: Here's WhyCrowdfund InsiderIt may be counterintuitive but the research has been done and the results are now in – and it's as we've been saying for almost five years. Fraud in crowdfund [...]

Finance MagnatesEthereum Alternative Æternity Starts Phase Two of Crowdfunding CampaignFinance MagnatesÆternity's blockchain is built from scratch with most of the transactions done off-chain for speed and efficiency. Avi Mizrahi | News (CryptoCurrency) | Monday, 29/05/2017|14:55 [...]

CFB Finance

Marketwired

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

Press Release

CrowdFund Beat Media

Teacher turns to crowdfunding to buy greenhouse for Nunavut students upflow.co/l/bqoI pic.twitter.com/chHa3MnCfT

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 |