Money360, Inc, the peer-to-peer (P2P) real estate lending platform, announced that the platform has accomplished another “industry first” by closing the first tranche loan to be originated by a U.S. P2P platform. Proplend staked its claim in the UK market in May, reported Crowdfund Insider’s Samantha Hurst. Money360’s $8.75 million commercial real estate loan was funded by a diverse group of institutional and accredited private investors, and is secured by one first-trust-deed loan. The loan was structured with an “A” tranche, at a lower rate, and a “B” tranche, at higher rate, with an overall blended rate paid by the borrower.
“We are proud to be not only the original peer-to-peer real estate lending platform, but also the first to introduce tranche loans to the U.S. peer-to-peer real estate lending market by closing a large loan with a diverse group of investors,” said Evan Gentry, Founder and CEO of Money360. “What Money360 is pioneering here will give investors more selection in terms of risk, maturity and return, while giving borrowers access to lower-cost rates on a blended basis.”
Money360 brings borrowers and investors together on loans backed by commercial real estate nationwide. The $8.75 million loan was secured by a 184,000 square foot industrial building in Salt Lake City, Utah, and was funded by one institutional investor, two private investment groups and five high-net-worth, accredited investors, according to Money360. The loan-to-value was 70 percent of real estate value and 53 percent of the total pledged collateral (including real estate and equipment/assets).
“Investors are drawn to Money360’s P2P/marketplace lending platform for its exclusive and unique investment opportunities, so the tranche loan program is a natural expansion for Money360,” said Dan Vetter, President of Money360. “Money360 investors now have an even wider spectrum of investment opportunities with the ability to calibrate their risk and return preferences within an individual loan. Money360’s tranche loan program also benefits borrowers by offering them a lower-cost blended rate.”
“Money360 has been rapidly expanding since relaunching its website last month with new online tools,” stated the platform. “Money360 pioneered the peer-to-peer real estate lending model in 2010, but subsequently put the business on hold until regulation caught up to allow this model to operate. Since new regulation (Jobs Act – Title 2) implemented at the end of last year, Money360 has been quietly installing a seasoned leadership team and re-building the model for rapid expansion. The company is on track to close $25 million in peer-to-peer real estate loans by the end of the year.” Money360’s P2P lending platform aims to eliminate the overhead and processing costs associated with traditional banking/lending models.