The online, peer-to-peer lending marketplace Money360 has recently announced securing $110 million in funding. Money360 works to connect commercial real estate borrowers with accredited investors and plans to use the new round of funding to purchase/originate loans through its online lending platform. Funding was secured through a loan purchase agreement for $100 million, with the remaining $10 million raised in cash through Money360's subsidiary, M360 Fund 1, LLC. Timing for the firm's new robust round of loan capacity is ideal, as an increasing number of commercial borrowers are now making use of the company's online marketplace to source financing for real estate purchase. Originally launched in 2010, Money360 became the first peer-to-peer real estate lending platform. Challenges were encountered; however, as the firm was forced to endure an extended hold while awaiting the release of regulation that would make it possible for the company to market investment offerings to accredited investors.
Money360 was relaunched during the fall of 2014 and since that time has experienced tremendous growth. Last month, Money360 had more than $150 million in loan requests. Once Title 2 of the JOBS Act was released, Money360 was able to move forward with planned expansion efforts, including the opportunity to market private investments to accredited investors. During the wait for the regulations to go into effect, Money360 focused on continuing to build capital and preparing the business for the unveiling of a business relaunch.
Following Money360's relaunch, the firm announced it has incorporated a highly seasoned executive team with significant experiencing in technology, investments, lending, and real estate. As part of the relaunch, Money360 also released an updated website as well as a bevy of new online tools that would make it possible to better match lenders and borrowers around the country as part of their nationwide expansion. Investors are also able to complete their entire loan applications online. Thanks to the new funding capacity, Money360 will be better positioned to keep up with the increasing demand from commercial real estate borrowers.
The Rise of Peer-to-Peer Lending and the Crowdfunding Environment
Peer-to-peer lending has become a popular lending platform for both borrowers as well as investors, providing an attractive alternative to traditional bank loans. Loans from Money360 are typically funded by pension funds, investment groups, high net worth individuals, banks, and other accredited investors. Borrowers making use of Money360's lending platform are able to take advantage of flexible terms, competitive rates, and a streamlined, efficient service. The firm is responsible for handling all underwriting and due diligence as well as loan servicing and administration. With a newly improved and more streamlined process, Money360 is making it possible for transactions to be closed much faster and more securely than ever before.
As crowdfunding and peer-to-peer lending continue to become a popular method for investors to source investments and borrowers to identify alternative forms of lending, the availability of P2P funds will become increasingly important in the commercial real estate sector.