This was a historic week for alternative finance. Following over 18 months of preparation, the week opened with our qualification by the U.S. Securities and Exchange Commission (SEC) to offer securities to non-accredited and accredited investors alike. And today, the week closes with the availability of our first loans under that qualification. Our team is very proud to have met the rigorous regulatory requirements necessary to expand GROUNDFLOOR beyond Georgia for the very first time.
Thousands of individual investors around the country have signed up to join GROUNDFLOOR while we’ve been focused on our pilot in Georgia. But today, with our qualification, we have the green light to begin our rollout across the country and pave the way to a $70 billion real estate lending market that is, finally, open to more individual investors than ever before.
What Lending Club and Prosper accomplished in the market for consumer debt, we are now well on our way to achieving in the market for private real estate lending. We are the first company ever to achieve SEC qualification to sell this type of real estate investment product to non-accredited investors. We are also the first company ever to utilize the new “Regulation A+” rules successfully, and to complete the rigorous NASAA Coordinated Review Process.
Why should all of this regulatory stuff matter to you?
Because the days of closed deals and unreasonable financial barriers are officially passing behind us.
Because private lending need no longer be a lucrative cottage industry reserved for wealthy investors and hedge funds.
Because today, the crowd wins.
Since we started our intrastate pilot a year and a half ago we’ve funded more than $2 million worth of commercial loans for residential real estate projects. More than $800,000 of lender principal and interest has already been repaid, with no defaults to date. Perhaps the most compelling finding from our pilot in Georgia is that the average annualized yield of GROUNDFLOOR loans is over 12 percent, which is even more compelling for a loan averaging just seven months in duration.
In the coming months, we’ll start rolling out to new states. Current GROUNDFLOOR lenders in Georgia and residents of eight newly approved states will soon have the right to invest in loans nationwide. The initial set of approved states joining Georgia include California, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington and the District of Columbia.
Lenders who sign up in the newly qualified states will be invited to start investing with us over the course of the coming weeks, as we bring more projects online. As we scale up and grow, GROUNDFLOOR will continue to offer more loans, in more places, to more retail investors like you.
We look forward to serving millions of individual investors and thousands of commercial borrowers in Georgia and beyond. Thank you for all of your support. Without you, today wouldn’t be possible. In this new era of crowd finance, the more investors and borrowers we gather together, the more value we can offer investors and borrowers alike. We encourage you to share the wealth and tell your friends to sign up today.
You can read the press release about our news here.