Peer-to-peer loans use domain names as collateral.
Francois Carrillo, who runs the Domaining.com news aggregation site, has launched Lend.me, a loan marketplace for domain name owners.
It’s a peer-to-peer loan marketplace similar to Prosper and LendingClub. A key difference is that the loans are secured with domain names.
The site acts as a matchmaking site between people who want to lend money and those that want to borrow. Much like on the popular peer-to-peer sites, the borrower posts what they are going to use the money for and a plan to repay it. They also select a loan term between three months and three years.
Borrowers must offer up domain names they’re willing to place as collateral for the loan.
Lenders respond to loan requests and propose interest terms.
Lend.me doesn’t play a role other than matchmaker; the money changes hands via participating escrow services.
I’ve long been interested in peer-to-peer lending, and Carrillo has come up with an interesting twist on it. I think it’s generally a good idea. It will be interesting to see how it works in practice.
One key question: How many domain name owners who need a loan be willing to post about it “publicly”.
Lenders should also consider loan regulations in their home country and state before participating.
I dont see domainers divulging the information to a free for all. At least Ii would not.
I’m aware of a domainer making a public request for a loan previously. I can see some doing it. Will be interesting to see.
Maybe some domainers will see some sort of stigma in a loan application, but they probably shouldn’t — as if making use of credit necessarily signals that one’s finances are unsound!
It’s a curious double standard.
A startup will spend half its time begging everybody under the sun for VC funding, which is basically a loan with company equity as collateral. Yet this is perceived as a sign of entrepreneurship. And when they obtain a loan (i.e. VC funding), we assume they’re somehow very promising — rather than financially unsound. The champagne corks pop!
You probably have at least 1 credit card. Using that credit doesn’t mean that you’re poor. Conventional businesses can go to the bank for a loan. Most small businesses have loans at any given time. That’s normal. Since domainers are in business, shouldn’t they be allowed to take out loans too?
It’s no different from tapping into your equity with, say, a reverse mortgage.
Domainers might want a loan for all sorts of reasons. Maybe they’re GROWING, launching a new ambitious project that can benefit a large amount of capital at once. For instance, they may be buying an expensive domain and want to spread out that cost across a wider period. Financing the new acquisition leaves the domain in the seller’s hands, and some sellers insist on a lump sum. So getting a domain-based loan is a different form of financing that purchase.
Where does a domainer go for an extra $20k or $200k to fund their growth spurt? They could sell off domains cheaply. Or they could tap into their operating budget or long-term savings. But maybe it’s a bad time to sell stock. Or maybe you’d prefer to keep that money in the bank as a buffer for life’s vicissitudes.
It can make more sense to use your own domain portfolio to generate extra liquidity — either to smooth out the ups and downs of expenses or to finance additional growth.
No stigma attaches. So domainers shouldn’t hesitate to use the credit that comes from their own smart investments. Who cares if it’s public?
Think of it in the same way as asking for VC funding. Entrepreneurs feel no shame in advertising that they want cash.
FYI, there is an option when you request a loan to only make loans visible to premium members.
I could not have respond better, thanks Joseph!
Apparently most borrowers prefer their loan applications seen only by premium members.
In a side note an application was submitted last night with the borrower showing his LinkedIN account. I immediately thought, Ouch! this guy is serious about pay back his loan. So I decided I will add the question in the application form (optionnal) to give borrowers an additionnal way to reassure lenders and maybe give them more chance to get a loan when their collaterals are not outstanding. Trust is all.
Annyway for those who desire more privacy, I added the option to display or no the borrower name in the loan request page.
Sounds Interesting!!! A new approach to buy domains but I too doubt how many will actually post publicly regarding requirement of domains