Groundfloor, the peer-to-peer real estate lending marketplace open to non-accredited investors, said it is expanding its lending business to 12 additional states. The announcement comes just one year after the company qualified under Regulation A+ on Aug. 31, 2015 and is accompanied by news of the company’s steady growth.
Since achieving qualification by the U.S. Securities and Exchange Commission under Regulation A+, which allows some companies to use equity crowdfunding to offer and sell their securities without having to effect a full registration with the U.S. Securities and Exchange Commission, Groundfloor has funded 102 loans, representing an increase of 175 percent. This was accompanied by a corresponding 525 percent increase in retail securities sales to $12.5 million. The company’s borrowers returned $5.4 million in principal and interest to Groundfloor investors, a 470 percent increase, at an weighted average annual rate of return of 14 percent on a term of 9 months, with no loss of principal.
Groundfloor is a part of ATDC’s Signature portfolio of startups and is in the incubator’s Worldpay-supported financial technology program.
“At a time when we’re seeing alternative lenders buckle under the ebbs and flows of institutional capital, our model continues to challenge the status quo and accelerate our growth,” said Brian Dally, Groundfloor’s co-founder and CEO. “The broadest possible base of capital means market-leading rates for the best borrowers and sensational risk-adjusted yields for retail investors.”
The company remains open to investors in nine states with plans for further expansion in 2017. Upon qualifying under Regulation A+, Groundfloor expanded its lending business beyond Georgia to 10 additional states. Now, a year later, it expanded its lending business to 12 additional states, for a total of 23 states. The states being added today are Rhode Island, Massachusetts, New Hampshire, Michigan, Missouri, Minnesota, Colorado, Arizona, Utah, Nevada, Oregon, and Washington.
“One year later, we’re still the only peer-to-peer real estate lender open to non-accredited investors,” said Nick Bhargava, co-founder and EVP of Regulatory Affairs. “Last quarter we announced lower rates, while the market trended in the other direction. Groundfloor is a thriving marketplace because we’re committed to a model that benefits everyone.”
Groundfloor’s Regulation A+ highlights:
– Number of registered borrowers up 300 percent – Number of loans funded up 175 percent
– Value of loans funded up 525 percent
– Number of investors up 300 percent
– Amount invested per investor up 300 percent