Francois Carrillo who is the Founder and C.E.O of Cybertonic which also publishes domaining.com has rolled out his newest site, Lend.me.
The site puts together lenders and borrowers together which are willing to lend and borrow using domain names and websites as collateral with an interest rate of 12% per year, which is less than domain capital’s stated rate of 15%. Moreover while domain capital traditionally only loans 50%-60% of the domains value Lend.me basically leaves it up to the borrowers and Lenders to come to an agreement on what the amount they will lend or borrow on any particular domain.
I had a chance to chat with Francois about the new service:
So Lend.me is offering loans with a 12% interest?
“”Lend.me doesn’t loan money.
We match borrowers with lenders for loan requests that are secured by digital assets. (Initially, Domain names and Websites)”
12% is the average annual interest rate proposed these past years by those offering such loans.
We hope to lower this average rate thanks to the healthy competition lend.me will generate.”
Is there a limit on the amount loaned on a domain?
There is no maximum.
How are you determining what the domain is worth?
Each lender will personally estimate the value of domains or web sites put as collateral by the borrowers.
In addition, we would like to help borrowers who don’t own “Liquid” digital assets, succeed in getting a loan.
Ideally that they also be able to get more money than the wholesale value of their asset:
There are honest hard working people who need cash advances, who don’t own liquid assets to put as collateral.
Nevertheless, they own assets that have high value to themselves.
Assets they “Cannot” lose for many reasons.
If these borrowers explain in a convincing way, why they would be able to pay their loan back, then there is no reason why some lenders should not consider lending them the money, specially in light of the fact that there is low risk and fair profit rates involved for them.
This is the reason why at lend.me we ask in the loan request form the borrower to explain, his project or need, why he wants the money and how he plans to make the money to pay the loan back. We aim to make the lending process more human, and want to help establish a first relationship of “Trust” with potential lenders.””
What percentage of the domain’s value are you willing to lend on?
Today those offering digital collateral lending have no competition.
The result is that they lend based on the wholesale value of the digital asset, and they do not lend over this amount. They want to immediately resell the collateral to recover their money if the loan fails.
At Lend.me each person registered as a lender will have is own appreciation of the collateral value and the percentage of the digital asset he is willing to lend.
The large number of lenders and the natural competition that will ensue would allow to probably get much more than wholesale value of the collateral asset.
What are payback terms?
Lenders interested to offer a loan to a borrower must respond with the loan amount they are willing to lend, the annual interest rate and the term.
The borrower will review and select the best offer, or none at all. There is no obligation.
The loan terms are:
Interests should be paid quarterly and the balance at term.
Borrower could accelerate payment and save money by paying in full the loan after the first 3 months.
How long can the loan go for?
6 months to 3 years.
Are the payments are interest only?
Yes, and the balance at term.
Do you take ownership of the domain?
Once a borrower has decided to accept a loan offer from a lender, both parties will sign a lending agreement that we will provide for convenience.
From there an escrow transaction between the borrower and lender needs to be created to secure the loan process.
Because the borrower will pay escrow fees, he is the one who should select the escrow company. We provide suggestions as to which companies they use for escrow as a convenience.
The transaction is secure because collateral digital assets are put under escrow ownership while the transaction is not completed.
This is the timeline:
- Lender will pay to the escrow company the loan amount.
- Borrower will put his collateral digital assets under escrow ownership.
- Escrow will pay borrower the loan amount minus escrow fees.
- After the first 3 months the borrower will start paying each quarter the loan interests.
- Escrow will pay quarterly the interests to the lender minus escrow fees.
- At loan term the borrower will pay the remaining loan balance to escrow minus escrow fee.
- Escrow will pay the lender and will send back the digital collateral to the borrower.
- If at anytime an invoice is not paid in time by the borrower then the loan is cancelled.
- The borrower will lose the money paid and the escrow will transfer his digital collateral asset to the lender.
If I’m a lender do i get to review domains and deals on one off basis and say someone wants to borrow $1M on sex.com and I loan the $1m what do I get, what do you get?
Lend.me works as a classified listing of loan requests,
Lend.me doesn’t make any profit when a borrower/lender match is done, nor when an escrow services to secure a loan is suggested.
We only charge:
- $35 when a borrower submits a loan (we previously review it at no charge).
- $90/year to be able to watch and make offers to loan requests. (A domaining.com premium membership, with all the added bonuses it regularly has.)
The lender and the borrower will make whatever they agree to in their internal negotiations.””
It sounds like an interesting project.
Obviously Lend.me its a killer domain name