Groundfloor, a residential real estate crowdfunding platform, is set to grow its business thanks to a new agreement with Direct Access Capital, a specialty finance company focused on providing liquidity to non-bank lenders of short-term, residential-backed business loans.
Through a whole loan purchase relationship with Direct Access Capital, Groundfloor plans to increase its loan origination volume and expand its product offerings over the next year.
According to a release from the companies, the shared target is $100 million in loans through 2018.
According to Groundfloor, the company is the “real estate crowdfunding platform that is open to non-accredited investors,” meaning that anyone is able to invest in residential real estate using the company’s platform.
The company lends to residential real estate investors, using money raised from individual investors.
The company, which is based in Atlanta, was founded in 2013. Groundfloor currently lends in 27 states, and has sold $40 million worth of securities on its platform and raised $8.5 million in venture capital from fintech investors.
The relationship with Direct Access Capital is Groundfloor’s first institutional partnership.
According to the companies, the purchasing agreement will increase Groundfloor’s lending capacity for borrowers seeking larger loans to $500,000, and in some cases up to $2 million.
Groundfloor also plans to begin offering new investment products with a variety of repayment options.
Brian Dally, Groundfloor’s co-founder and chief executive officer, said that the agreement will allow the company to significantly increase its revenue.
“Direct Access Capital is a highly expert, value-added financing partner whose support will enable Groundfloor to triple revenue growth,” Dally said. “Our target to supply $100 million of loans is a testament to the market demand for value-added real estate investment credit, as well as the strength of Groundfloor’s underwriting and servicing.”
Noah Martin, chief investment officer at Direct Access Capital, said that the company sees the potential in Groundfloor’s business model.
“Groundfloor has demonstrated the potential for hyper-growth while maintaining their track record of originating a quality debt product in the market tor real estate investment loans,” Martin said. “We believe in their unique business model and are proud to contribute to their mission to democratize investing for all.”
