Debt Crowdfunding for Business & Real Estate
Easier access to patient capital is at least one of the boons promoted by the crowdfunding industry at large. Debt crowdfunding is already assisting business and real estate projects alike. Like its partner equity crowdfunding, debt crowdfunding expands the possibilities for many businesses looking to find a non-bank solution for sourcing the necessary capital. Because of its unique position and structure, debt crowdfunding is actually preferred by many investors who prefer the steady income available, have the ability to collateralize obligations and are able to capitalize on their investment immediately.
We bring the right partnership mix of legal, investment and crowdfunding expertise to your next debt crowdfunding project. Whether you are seeking senior secured debt obligations for a real estate project or require a healthy mix of debt and equity for some acquisition financing, we can provide the right structure to facilitate the capital raise through crowdfunding. Our expert team has raised millions of dollars for capital financing projects through traditional channels. We bring that same expertise and meld it with crowdfunding to ensure we supply the put-away power to your capital raise.
We utilize 506(c), Regulation A+, and (very soon) general Title III crowdfunding to source capital for your debt offering. Our minimum capital raise requirement is $5,000,000. Please contact us. We would be happy to assist with your next crowd-lending project.
Benefits to Issuers
- Raise between $1,000,000 and $50,000,000 in your debt crowdfunding campaign (our internal minimums are $5,000,000)
- Depending on the legal structure of your raise, your business can raise capital from both accredited and non-accredited investors
- Offer a unique structure to investors
- Avoid bank financing or use crowdfunding as an alternative when the bank is unable to provide the financing
- Use the capital for a myriad of internal needs including acquisition financing, working capital needs or recapitalization
- Gain better rates on your capital than traditionally available through banks and mezzanine lenders
Benefits to Investors
- Greater diversification of crowdfund investments
- Immediate access to capital streams from recurring loan repayments
- Use collateral such as equipment or real estate to become a senior, secured lender to the issuer, providing risk mitigation in the event of default
- Structured convertible debt can allow conversion to equity if upside occurs
- Provide investments in increments both small and large, depending on the capital raise
- Including yourself in crowdfund investing databases, provides access to a greater number of quality deals
Debt crowdfunding represents a benefit for investors looking for immediate returns with securitized instruments
Crowd-based lending allows entrepreneurs more flexibility for their financing needs without the dilution of equity funding.
Like its equity counterpart, debt-based lending represents a compelling opportunity for small business owners seeking financial assistance outside traditional lending institutions, including banks and credit unions. Debt crowdfunding or “crowd lending,” as it is sometimes called, provides non-dilutive business financing on payment terms requested by the founder and funded by the crowd.
COST + OPPORTUNITY
Platforms that provide this service typically charge a few points for loan origination to use the service. The rates vary from platform to platform and fluctuate depending on the size and length of the borrowing period. The most favorable terms on any such debt finance deal is likely to come from a business owners’ closest circle, including friends and family. When sourcing accredited and institutional money, the APR (annual percentage rate) for a crowd loan is likely to be several points–or more–higher. Once declared legal and properly regulated by the SEC, debt-based crowdfunding will present a huge opportunity for even the smallest business owner wanting non-dilutive financing to contribute to his/her business growth needs.
Astute non-bank lenders are interested in filling the gap in small business finance.
We work with investors and other non-bank lenders to provide small business crowd lending finance for company growth and working capital needs. Both institutional accredited and individual non-accredited investors alike can benefit from our unique financing platform for business growth. We use our network of savvy, qualified and willing investors to assist in sourcing capital to fuel your business. Investors and entrepreneurs interested in working together to change the way business is done are invited to get in contact with us directly.
We don’t compete directly with any equity crowdfunding portal. We partner with them.
By maintaining a platform agnostic stance to our strategy it means we work with whatever debt crowdfunding portal or platform entrepreneurs and their investors decide to use. It also means platform operators are incentivized in working directly with us on specific deals and opportunities as we both increase deal flow, but also increase the financing turnover for their platforms. If you own or operate a crowd lending platform, please get in touch with us.