ATLANTA--(BUSINESS WIRE)--GROUNDFLOOR, the first public lending community for real estate, today announced the company has qualified with the U.S. Securities and Exchange Commission (SEC) to sell securities to non-accredited investors under the amended Regulation A (referred to as Regulation A+). On the heels of a successful pilot in Georgia, GROUNDFLOOR will soon begin a limited rollout period in 8 new states.
GROUNDFLOOR is the first company to achieve SEC qualification for peer-to-peer microlending since Prosper and Lending Club in 2009. They are also the first company ever to qualify for real estate microlending, and the first issuer to complete the new North American Securities Administrators Association (NASAA) Coordinated Review Process, which is designed to facilitate the filing of Regulation A offerings in multiple U.S. jurisdictions.
GROUNDFLOOR’s Georgia intrastate pilot funded over $2 million worth of real estate project loans to commercial borrowers, with no defaults and over $800,000 of lender principal and interest repaid to date. During the pilot, the typical loan term was six months to a year, with a typical size of $50,000 to $100,000 per loan and average annualized yield of over 12 percent. In November 2014, the company reduced the cost of each unit of investment in loans from $100 to the current $10. As it expands nationwide, GROUNDFLOOR will continue to offer individual investors access, choice and value that far exceed the personal finance status quo.
“Today is a breakthrough moment for alternative finance. Private lending is going public,” said Brian Dally, co-founder and CEO at GROUNDFLOOR. “Our qualification paves the way to open a $70 billion real estate lending market to all. We look forward to serving millions of individual investors and thousands of commercial borrowers in Georgia and beyond.”
Current GROUNDFLOOR lenders in Georgia and residents of eight newly approved jurisdictions will soon have the right to invest in loans nationwide. The initial set of approved jurisdictions include California, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington, Georgia and the District of Columbia. The company anticipates adding new investment opportunities and expanding its offerings to additional states in the near future and has positioned itself for aggressive growth.
The SEC recently expanded Regulation A, as mandated by Title IV of the Jumpstart Our Business Startups (JOBS) Act. The new rules, commonly referred to as Regulation A+, permit qualified issuers to offer up to $50 million in securities over a 12-month period in what are known as Tier 2 offerings. Companies electing to use Tier 1 offerings may offer up to $20 million.
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This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
ANY OFFERING OF SECURITIES WILL BE MADE ONLY BY MEANS OF A DULY QUALIFIED OFFERING CIRCULAR, WHICH CAN BE OBTAINED BY QUALIFIED INVESTORS THROUGH OUR PLATFORM. INFORMATION ABOUT OUR OFFERINGS MUST BE READ IN CONJUNCTION WITH SUCH OFFERING CIRCULAR IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES.
This press release contains forward-looking statements, which include, but are not limited to, statements concerning the Company and our plans and projections. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, as more fully described in the Offering Circular. In light of such risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
GROUNDFLOOR is the first public lending community for real estate that is 100 percent open to non-accredited investors. GROUNDFLOOR leverages an innovative application of existing securities law and a proprietary underwriting engine to open up the market for private real estate lending to all. The company offers non-accredited and accredited investors alike access to participate in short-term commercial loans backed by residential property.
Founded in February 2013 by Brian Dally and Nick Bhargava, GROUNDFLOOR is headquartered in Atlanta, Georgia with a fast-growing team of crowdfunding, real estate and finance experts.
For more information, visit: https://www.groundfloor.us.