Real estate crowdfunding platform Groundfloor has entered into a whole loan purchase relationship with Direct Access Capital, a company providing liquidity to non-bank lenders of short-term residential backed business loans.
It is Groundfloor’s first institutional partnership, and allows them to both scale and expand its product roster. Its shared target is $100 million in loans through 2018.
“Direct Access Capital is a highly expert, value-added financing partner whose support will enable Groundfloor to triple revenue growth,” Groundfloor cofounder and CEO Brian Dally said. “Our target to supply $100 million of loans is a testament to the market demand for value-added real estate investment credit, as well as the strength of Groundfloor’s underwriting and servicing.”
Groundfloor will service loans for Direct Access Capital and those held by retail investors. They said their historical loss ratio is 70 basis points and their net return is 14.85 per cent (on 134 loans). The average repayment term on $12.4 million of repaid principal is 7.7 months.
“Groundfloor has demonstrated the potential for hyper-growth while maintaining their track record of originating a quality debt product in the market tor real estate investment loans,” said Noah Martin, Direct Access Capital CIO. “We believe in their unique business model and are proud to contribute to their mission to democratize investing for all.”