Company offers capital to owners of domain names and online businesses.
A new company has entered the domain name lending space, offering loans to domain name owners and digital businesses.
Lendvo was founded by Patrick Izzo and Ben Lichtman, nephew of the late Igal Lichtman (Mrs Jello).
The company has a number of creative financing options for buying and selling domain names, as well as unlocking the equity built up in existing domain name portfolios.
The most straightforward loan is for the purchase of a domain name. But Lendvo can get a bit creative.
For example, if a seller has already entered into a payment plan arrangement with a buyer, Lendvo can pay the full amount upfront to the seller. It can also work with the buyer to convert the payment plan into a more traditional loan, perhaps spreading out the payments beyond the original 12 months.
Lendvo will also provide a sales advance to a domain owner who is in the process of selling a domain name. For example, a domain owner who just placed a six-figure domain for sale with a broker but needs the cash now can take a loan, with the due date tied to an estimated sales date.
The company also provides loans for other digital businesses, such as e-commerce sites that need money for inventory or operations.
Borrowers typically put 35%-40% down toward the purchase price, although the company does loans with as little as 25% down. Interest rates are typically between 1.5%-2.9% a month with a 1% origination fee. Loans are personally guaranteed by the borrowers with the digital assets as collateral.
Lendvo currently has seven figures of capital to put to work. The company competes with other domain name financing companies, such as Domain Capital.
thelegendaryjp says
Latona 2.0 how’s that working…
Andrew Allemann says
There are other companies lending against domain names that are doing well, such as Domain Capital.
Is it risky? Sure. But that’s baked into the business model.
Note that Lendvo is charging interest in one month equivalent to what you currently pay for an entire year of interest on a secured car loan. These loans are also personally guaranteed. If domain values drop AND the borrower can’t service the debt, Lendvo can seek more than just the collateral to be made whole.
I lend money through LendingClub this is entirely unsecured and for much longer terms than 18 months. There’s risk whenever you lend money. The key is to balance the upside with the downside.
Platey says
I’ve had a look at lending club etc it looks good
I am looking to borrow against my domain name portfolio with the loan being paid of as domains in my domain name portfolio are sold
I have a few two keyword dot coms And a few 5L brandable. Coms etc
Joseph Peterson says
Good. Whether as buyers or sellers, we need more options and more competition in this space.
thelegendaryjp says
Is it good? As a lender it is great they are getting such a large amount down but the flip side is if markets turn like 07-08 you are finished…. like I said how’s Latona doing? To add to it getting in at a peak in any market is just plain reckless, you know what follows peaks Joseph?
Joseph Peterson says
@thelegendaryjp,
To hear some domainers talk, peaks are followed only by still higher peaks!
Within the domain market, certain sectors are likely to have peaked or be near the turning point. (China, obviously, springs to mind.) But that’s not true of all sectors. The domain market isn’t a monolith. Different domain styles and TLDs rise and fall at different times and for reasons dissociated from one another.
Yes, of course, if a lender assigns collateral value based on peak market conditions, then the lender will be in for a rough ride. Borrowers, finding themselves underwater on now-overvalued assets, might simply jump ship.
But why is it a foregone conclusion that the lenders will mismanage their business? Risk analysis is a sane part of any loan. Banks don’t fail simply because of market volatility. They fail when they underestimate risk.
So I stand by my original point. Having more lenders is a good thing.
thelegendaryjp says
Joe, hearing domainers talk that peaks are followed by peaks is almost laughable. The proof was just 8 years ago.
We cannot ride an emotional high because of the Asians buyers jumping in, jump in and perhaps jump ship eventually. Out side economical events certain do impact domain values, again 2007-08.
No foregone conclusion anyone will mismanage in fact you can do everything right and still lose. At this point one could argue that risk is high, I speak with many big buyers weekly and they have as far as I can tell put the breaks on a little bit (in regards to chips and numbers).
There is always a risk involved in a venture but we can minimize the risk if we evaluate the state of things. Huge price increases, falling world markets + risk, jmo.
John says
Only 1,5% to 2,9% a month. What a deal. Are they in a charity business ?