Money360 Closes More Than $45 Million in Loans - June 22, 2017

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On May 16, Money360 announced that it closed more than $45 million in loans in April. The leading commercial real estate marketplace lending platform is led by founder and CEO Evan Gentry. This record-breaking month for the company brings its total production to over $250 million in closed loans, with an expected $500 million in transactions by the end of the year.

“This is a record-breaking month for our company,” said Gentry in a press release. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”

The news follows several major milestones for Money360, including industry leader and Prosper Marketplace president Ron Suber joining the company as an investor and strategic advisor and one of the company’s funds being successfully registered with the South Korea Financial Supervisory Service.
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Money360 grows management ranks - June 20, 2017

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Commercial real estate marketplace lender Money360 has made a series of hires designed to support recent increases in deal flow, borrowers and capital partners.

Paul Cleary is the new COO, taking over from cofounder Dan Vetter, who retains the chief investment officer role. Mr. Cleary joins from Cherrywood Commercial Lending, a company he founded. Earlier in his career he was first vice president of business services at Kinecta Credit Union.

John Calder joins as director of credit administration and brings more than two decades of commercial real estate operations experience to the role.

Stratos Anthanassiades also brings 20-plus years to the position of regional director – midwest region. He held management positions at Alliance Credit Union, Business Partners, MetLife and Wachovia Securities.

Nick Jans is the new regional director for the southwest. Over his career he has originated and produced more than $2.1 billion in commercial real estate financings for companies including Willow Bend Commercial Capital, New York Life Investment Management and Massachusetts Mutual Life Insurance Company.

As Money 360’s CRE loan underwriter, Craig Brown will tap into nearly three decades of experience gleaned from his time with real estate consulting companies, mortgage firms and major banks.
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Money360 Secures Top Talent to Support Company Growth - June 22, 2017

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LADERA RANCH, Calif. – June 19, 2017 – Money360, the leading commercial real estate marketplace lending platform, recently announced the addition of eight new hires to support the company's rapid expansion. The hires include five seasoned commercial real estate executives and three industry specialists, who were brought on to support the increased deal flow and expanding base of borrowers and capital partners in the U.S. and around the world.

Money360's C-suite was bolstered with the hiring of Paul Cleary as the company's new Chief Operating Officer (COO). Money360 Co-Founder Dan Vetter, who was splitting his time as the company's COO and its de-facto Chief Investment Officer (CIO), will now formally assume the title of CIO and be able to focus all of his time on CIO-related responsibilities. Vetter will continue to serve as President of M360 Advisors, LLC.

"The first half of the year has set a strong precedent for the rest of 2017, and we look forward to meeting the lending needs and demands of the commercial real estate industry," said Money360 founder and CEO Evan Gentry. "The addition of a seasoned team of industry experts will allow Money360 to meet the increased demand for both bridge and permanent loans, and allows our company to be nimble in a shifting landscape."

The new hires include:

Paul Cleary, Chief Operating Officer: Cleary was Executive Vice President of Cherrywood Commercial Lending, LLC, where he helped found the company and oversaw loan production and marketing. Prior to that, he was the First Vice President of the Business Services division at Kinecta Federal Credit Union. He earned his MBA from University of California, Irvine, his JD from the University of San Diego School of Law and his Bachelor of Arts from University of California, Santa Barbara.

John Calder, Director of Credit Administration: Calder has worked as a commercial real estate operator and executor for more than 20 years at companies including SABAL Financial Group, Mir, Mitchell & Company, LLP and Sterling Bank & Trust. He earned his bachelor's degree in business at University of Colorado, Boulder.

Stratos Athanassiades, Regional Director - Midwest Region: With more than 20 years of experience, Athanassiades has held a number of managerial roles for Alliant Credit Union, Business Partners, LLC, MetLife and Wachovia Securities. He earned his bachelor's degree in political science and international relations from Northwestern University.

Nick Jans, Regional Director - Southwest Region: Jans has originated and produced more than $2.1 billion in commercial real estate financings. His background includes positions as principal at Willow Bend Commercial Capital, Vice President at New York Life Investment Management and Investment Director at Massachusetts Mutual Life Insurance Company. He earned his bachelor's degree in business administration from Saint Louis University in Missouri.

Craig Brown, CRE Loan Underwriter: With nearly 30 years of experience, Brown has held a number of executive and managerial positions at real estate consulting companies, mortgage firms and major banks. His wide range of experience includes positions at Security Pacific Bank, CORE Realty Holdings, LLC and Wells Fargo Bank. Brown earned his Bachelor of Arts from Stanford University and his JD from Western State University.

In addition to the new executives, the new hires also include three support specialists: Jared Wright, CRE Loan Analyst; Annie Chantaduly, CRE Loan Expeditor; and Joel McRae, CRE Customer Service specialist.

Earlier this year, increased deal flow and projections for robust growth prompted Money360 to launch new regional divisions in the Northwestern and Northeastern United States to drive loan transactions and investment opportunities.
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Money360 Secures Top Talent to Support Company Growth - June 19, 2017

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Money360, the leading commercial real estate marketplace lending platform, recently announced the addition of eight new hires to support the company's rapid expansion. The hires include five seasoned commercial real estate executives and three industry specialists, who were brought on to support the increased deal flow and expanding base of borrowers and capital partners in the U.S. and around the world.

Money360's C-suite was bolstered with the hiring of Paul Cleary as the company's new Chief Operating Officer (COO). Money360 Co-Founder Dan Vetter, who was splitting his time as the company's COO and its de-facto Chief Investment Officer (CIO), will now formally assume the title of CIO and be able to focus all of his time on CIO-related responsibilities. Vetter will continue to serve as President of M360 Advisors, LLC.

"The first half of the year has set a strong precedent for the rest of 2017, and we look forward to meeting the lending needs and demands of the commercial real estate industry," said Money360 founder and CEO Evan Gentry. "The addition of a seasoned team of industry experts will allow Money360 to meet the increased demand for both bridge and permanent loans, and allows our company to be nimble in a shifting landscape."

The new hires include:

Paul Cleary, Chief Operating Officer: Cleary was Executive Vice President of Cherrywood Commercial Lending, LLC, where he helped found the company and oversaw loan production and marketing. Prior to that, he was the First Vice President of the Business Services division at Kinecta Federal Credit Union. He earned his MBA from University of California, Irvine, his JD from the University of San Diego School of Law and his Bachelor of Arts from University of California, Santa Barbara.

John Calder, Director of Credit Administration: Calder has worked as a commercial real estate operator and executor for more than 20 years at companies including SABAL Financial Group, Mir, Mitchell & Company, LLP and Sterling Bank & Trust. He earned his bachelor's degree in business at University of Colorado, Boulder.

Stratos Athanassiades, Regional Director - Midwest Region: With more than 20 years of experience, Athanassiades has held a number of managerial roles for Alliant Credit Union, Business Partners, LLC, MetLife and Wachovia Securities. He earned his bachelor's degree in political science and international relations from Northwestern University.

Nick Jans, Regional Director - Southwest Region: Jans has originated and produced more than $2.1 billion in commercial real estate financings. His background includes positions as principal at Willow Bend Commercial Capital, Vice President at New York Life Investment Management and Investment Director at Massachusetts Mutual Life Insurance Company. He earned his bachelor's degree in business administration from Saint Louis University in Missouri.

Craig Brown, CRE Loan Underwriter: With nearly 30 years of experience, Brown has held a number of executive and managerial positions at real estate consulting companies, mortgage firms and major banks. His wide range of experience includes positions at Security Pacific Bank, CORE Realty Holdings, LLC and Wells Fargo Bank. Brown earned his Bachelor of Arts from Stanford University and his JD from Western State University.

In addition to the new executives, the new hires also include three support specialists: Jared Wright, CRE Loan Analyst; Annie Chantaduly, CRE Loan Expeditor; and Joel McRae, CRE Customer Service specialist.

Earlier this year, increased deal flow and projections for robust growth prompted Money360 to launch new regional divisions in the Northwestern and Northeastern United States to drive loan transactions and investment opportunities.

About Money360: Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a nationwide, direct lender offering borrowers speed, convenience and reasonable terms on commercial real estate loans from $1 million to $20 million. Money360 operates a marketplace lending platform that provides investors direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Announces New Hires to Support Rapid Expansion - June 19, 2017

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Commercial real estate marketplace lending platform, Money360, announced on Monday it has added eight new hires to support its rapid expansion. According to the online lender, the hires included five seasoned commercial real estate executives and three industry specialists.

Speaking about the hires, Money360 founder and CEO Evan Gentry, stated:

“The first half of the year has set a strong precedent for the rest of 2017, and we look forward to meeting the lending needs and demands of the commercial real estate industry. The addition of a seasoned team of industry experts will allow Money360 to meet the increased demand for both bridge and permanent loans, and allows our company to be nimble in a shifting landscape.”

The executive hires are the following:

Paul Cleary, Chief Operating Officer: Cleary was Executive Vice President of Cherrywood Commercial Lending, LLC, where he helped found the company and oversaw loan production and marketing. Prior to that, he was the First Vice President of the Business Services division at Kinecta Federal Credit Union.

John Calder, Director of Credit Administration: Has worked as a commercial real estate operator and executor for more than 20 years at companies including SABAL Financial Group, Mir, Mitchell & Company, LLP and Sterling Bank & Trust.

Stratos Athanassiades, Regional Director – Midwest Region: Has over 20 years of experience. Held a number of managerial roles for Alliant Credit Union, Business Partners, LLC, MetLife and Wachovia Securities.

Nick Jans, Regional Director – Southwest Region: Originated and produced more than $2.1 billion in commercial real estate financings. His previous positions included principal at Willow Bend Commercial Capital, Vice President at New York Life Investment Management and Investment Director at Massachusetts Mutual Life Insurance Company.

Craig Brown, CRE Loan Underwriter: Has nearly 30 years of experience and held a number of executive and managerial positions at real estate consulting companies, mortgage firms, and major banks.

The three support specialists: Jared Wright, CRE Loan Analyst; Annie Chantaduly, CRE Loan Expeditor; and Joel McRae, CRE Customer Service specialist.
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Money360 Secures Top Talent to Support Company Growth - June 19, 2017

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LADERA RANCH, Calif. – June 19, 2017 – Money360, the leading commercial real estate marketplace lending platform, recently announced the addition of eight new hires to support the company's rapid expansion. The hires include five seasoned commercial real estate executives and three industry specialists, who were brought on to support the increased deal flow and expanding base of borrowers and capital partners in the U.S. and around the world.

Money360's C-suite was bolstered with the hiring of Paul Cleary as the company's new Chief Operating Officer (COO). Money360 Co-Founder Dan Vetter, who was splitting his time as the company's COO and its de-facto Chief Investment Officer (CIO), will now formally assume the title of CIO and be able to focus all of his time on CIO-related responsibilities. Vetter will continue to serve as President of M360 Advisors, LLC.

"The first half of the year has set a strong precedent for the rest of 2017, and we look forward to meeting the lending needs and demands of the commercial real estate industry," said Money360 founder and CEO Evan Gentry. "The addition of a seasoned team of industry experts will allow Money360 to meet the increased demand for both bridge and permanent loans, and allows our company to be nimble in a shifting landscape."

The new hires include:

Paul Cleary, Chief Operating Officer: Cleary was Executive Vice President of Cherrywood Commercial Lending, LLC, where he helped found the company and oversaw loan production and marketing. Prior to that, he was the First Vice President of the Business Services division at Kinecta Federal Credit Union. He earned his MBA from University of California, Irvine, his JD from the University of San Diego School of Law and his Bachelor of Arts from University of California, Santa Barbara.

John Calder, Director of Credit Administration: Calder has worked as a commercial real estate operator and executor for more than 20 years at companies including SABAL Financial Group, Mir, Mitchell & Company, LLP and Sterling Bank & Trust. He earned his bachelor's degree in business at University of Colorado, Boulder.

Stratos Athanassiades, Regional Director - Midwest Region: With more than 20 years of experience, Athanassiades has held a number of managerial roles for Alliant Credit Union, Business Partners, LLC, MetLife and Wachovia Securities. He earned his bachelor's degree in political science and international relations from Northwestern University.

Nick Jans, Regional Director - Southwest Region: Jans has originated and produced more than $2.1 billion in commercial real estate financings. His background includes positions as principal at Willow Bend Commercial Capital, Vice President at New York Life Investment Management and Investment Director at Massachusetts Mutual Life Insurance Company. He earned his bachelor's degree in business administration from Saint Louis University in Missouri.

Craig Brown, CRE Loan Underwriter: With nearly 30 years of experience, Brown has held a number of executive and managerial positions at real estate consulting companies, mortgage firms and major banks. His wide range of experience includes positions at Security Pacific Bank, CORE Realty Holdings, LLC and Wells Fargo Bank. Brown earned his Bachelor of Arts from Stanford University and his JD from Western State University.

In addition to the new executives, the new hires also include three support specialists: Jared Wright, CRE Loan Analyst; Annie Chantaduly, CRE Loan Expeditor; and Joel McRae, CRE Customer Service specialist.

Earlier this year, increased deal flow and projections for robust growth prompted Money360 to launch new regional divisions in the Northwestern and Northeastern United States to drive loan transactions and investment opportunities.

About Money360: Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a nationwide, direct lender offering borrowers speed, convenience and reasonable terms on commercial real estate loans from $1 million to $20 million. Money360 operates a marketplace lending platform that provides investors direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Announces Eight New Hires - June 19, 2017

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Commercial real estate lending platform Money360 has announced eight new hires to support the company’s growth; includes five commercial real estate executives and three industry specialists; Money360 has been rapidly growing its originations and the new hires will support increasing deal flow from its newly launched regional divisions in the Northwestern and Northeastern United States.
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Evaluating Alternative Lending Platforms and Their Prospects Going Forward - Summer 2017

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Traditionally, commercial real estate borrowers’ only option was to approach banks or other traditional lenders when seeking out a loan, a process that can be inconvenient and time consuming. Today, a wide variety of commercial real estate alternative lending platforms exist that can provide convenience and time savings, as well as flexibility for borrowers who may not be able to get loans approved from traditional lenders for a host of reasons. These platforms offer many benefits to lenders as well, such as direct access to loans, resulting in lower costs and higher returns.

What’s the Market for CRE Alternative Lending Platforms?

Commercial real estate presents a $3.3 trillion opportunity for online lenders — far greater than other peer-to-peer markets such as consumer ($2 trillion) and student loans ($1.3 trillion).

With nearly $300 billion in loans coming due in the next 18 months, alternative lenders in commercial real estate will have opportunities to fill the void left by other lenders, curtailing their lending activities and giving borrowers quicker access to funds at better terms than what may be offered by many traditional lenders. According to American Banker, the industry has grown by nearly 700 percent over the past four years. These platforms are already shifting the world of commercial real estate finance, and will only continue to grow over the next several years. With increased regulatory oversight within the commercial mortgage-back securities (CMBS) and banking industry in recent years, the pressure on traditional lenders is increasing, limiting their ability to provide new construction loans and refinance existing loans. As a result, alternative lenders are moving in to fill the gap and will become more necessary than ever to keep up with the demand for capital.



Crowdfunding vs. Marketplace Lending

Crowdfunding is one alternative lending method that is gaining popularity in the commercial real estate space. While these platforms typically raise money from many different investors, if not enough people contribute to fund the full transaction, all of the investments may fall through. Crowdfunding platforms also typically have limited options when it comes to loan terms and don’t match borrowers and investors based on the best fit, making it a less effective platform than more tailored lending platforms.

Marketplace or peer-to-peer lending is another popular option. These platforms match borrowers and lenders, giving borrowers timely access to funds from either individual or institutional investors, depending on the platform’s strategy. The marketplace lender sources, underwrites and services the loan, while marketing it to potential investors, typically after it has been funded. The lenders set the loan rates and terms of the loans they originate.

What is the Role of Technology?

In addition to expediting the process of finding an appropriate borrower or lender, marketplace platforms allow investors to review a variety of investment options in one place, do their research, and stay up-to-date on the latest investment opportunities. Investors and borrowers are updated in realtime during each step in the loan transaction, increasing transparency and reducing the back-and-forth lag in communication that occurs with traditional lenders.

Technology allows these platforms to be more accessible and easier to navigate, but the key is to have a team of knowledgeable professionals in commercial real estate financing with years of underwriting experience behind the company. Alternative lending platforms should use technology when beneficial to streamline processes, but investors and borrowers should be wary of platforms that use technology at the expense of human judgement.

What Are the Benefits of Commercial Real Estate Marketplace Lending?

In addition to providing much-needed capital for borrowers, marketplace lending offers investors access to a wide range of commercial real estate debt at varying rates of return that are typically highly-competitive, and often better, than other fixed-income investments. Marketplace lending offers many options, from smaller interests in larger loans to whole loans, for investors seeking higher yields than those offered by traditional fixed-income investments, such as CDs and U.S. Treasury bonds.

In addition to attractive yields, the fact that real estate debt is secured by collateral — unlike unsecured debt such as car or student loans and credit card debt — makes it a less risky investment prospect. Often times the investment property is income-producing, further reducing the risk in comparison to unsecured debt.

How Should Investors Evaluate Potential Opportunities?

Marketplace lending can be more effective and efficient than traditional loans, but only if done correctly. Every commercial real estate loan is different, and both investors and borrowers need to find the platform that is most appropriate for them based on the underwriting process and criteria. A casual investor looking to invest $1,000 has different requirements than an accredited investor with $250,000 in capital. Alternative lending platforms need to have experienced teams on staff to ensure lenders and borrowers are matched appropriately, that both parties are educated about the terms of the loan and that the loans are originated and unwritten correctly

Besides the loan platform itself, there are many types of commercial real estate loans investors can choose from when evaluating potential opportunities. Each opportunity should be evaluated based on the investor’s goals, risk tolerance, timeline, diversification preference and overall portfolio strategy, but there are some general rules to keep in mind.

Permanent and bridge loans typically are less risky because they are in a first lien position, secured against a property, and the loan structure has a defined rate of return with regularly scheduled payments. Equity loans, on the other hand, do not have a defined rate of return but offer the ability to have a permanent stake in the real estate. For investors seeking more diversification and less risk, professionally managed, low-cost commercial real estate funds that pool these investments can be an attractive option that some marketplace lending platforms offer.



Gary Bechtel serves as president of Money360, the leading commercial real estate marketplace lending platform that caters to institutional and accredited retail investors. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO). He can be reached at garybechtel@ money360.com or (949) 525-9311. Learn more at money360.com.
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The Growing Demand for CRE Marketplace Lending - Summer 2017

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In years past, banks and other traditional lenders were commercial real estate (CRE) borrowers’ only option when seeking out a loan. Today, there are a wide variety of marketplace lending platforms in the CRE space that can not only offer convenience and quicker closing times, but also flexibility for those who may have difficulty securing loans through traditional avenues.

MARKET SIZE

There is a $3.3 trillion opportunity for alternative lenders in the commercial real estate space – far greater than the $2 trillion market for consumer loans or $1.3 trillion market for student loans. The large total addressable market of investors ranging from institutions to highnet-worth accredited investors is why so many marketplace lenders have entered this space in recent years.

In addition to attractive yields that are competitive or better than other fixed income investments, the fact that commercial real estate debt is secured by collateral, which often times is income producing, is appealing to investors. According to a study by American Banker, the marketplace lending industry has grown by almost 700 percent in just four years. With nearly $300 billion in loans coming due in the next 18 months, fintech lenders are becoming a more attractive option to banks and other traditional lenders.

The increased regulatory pressure on traditional lenders through Basel III and Dodd-Frank, however, will only make it more difficult for banks to approve new commercial real estate loans or refinance maturing loans in the future, providing opportunities that many marketplace lenders – which have fewer regulations imposed on them at present – are poised to fill.

FASTER, MORE ACCESSIBLE UNDERWRITING

The technology used by marketplace lenders vastly increases the speed in which loans can be processed and closed. While banks and other traditional lenders can take two to four months to close on a commercial real estate loan, technology allows alternative lenders to provide an initial quote in as little as 24 to 48 hours and close in as few as two to four weeks. Investors can review a variety of commercial real estate opportunities in one place and stay up-to-date about the latest loans available for investment. Once borrowers and investors are matched, both parties can be updated in real-time about the underwriting and loan approval process. There is much more transparency, and there isn’t the lag in communication that sometimes comes with traditional lenders because borrowers and investors are able to easily navigate the process through the online platform.

While technology allows marketplace lenders to expedite and streamline the process, there should always be an underlying team of underwriters and other professionals with significant commercial real estate expertise behind the platform. Rather than relying on an algorithm, fintech platforms should have underwriters that conduct detailed reviews to ensure the borrower and investor are appropriately matched, and that it is a quality loan and investment opportunity. Technology should never take the place of human judgement. As marketplace lenders continue to streamline this process, some banks and traditional lenders have started to follow suit and incorporate technology into their underwriting process as well.

CROWDFUNDING VS. MARKETPLACE LENDING

There is often confusion in the commercial real estate industry about the difference between crowdfunding and marketplace lenders. While both facilitate fundraising, crowdfunding refers to how companies market a transaction to potential investors. Loan terms are dictated by the transaction sponsors who are raising money on the platform, and there is little personalization in matching borrowers and investors. If not enough people participate, the deal will likely fall through.

Marketplace lending, on the other hand, refers to how a loan is secured, underwritten, marketed and serviced after origination. The platforms themselves set the rates and loan terms, vet the transaction sponsors and underwrite the loan. Borrowers and individual or institutional investors are matched based on each party’s needs. Some platforms offer investment opportunities for one real estate loan at a time, while others combine loans into professionally managed funds. These funds give borrowers more opportunities to be matched with investors, and investors are provided with a more diversified option for their portfolio. In many cases, the loans are funded and then offered to potential investors, taking out the funding uncertainty inherent in many crowdfunding platforms.

BORROWER ASSESSMENT

In addition to faster closings and more transparency, fintech platforms offer more options for borrowers who may not be able to access loans through traditional means for a wide variety of reasons. Marketplace lenders offer greater flexibility in underwriting with multiple product types, ranging from bridge loans with rates ranging from 7 to 10 percent to permanent financing with rates from 4 to 6 percent.

As with banks and traditional lenders, alternative platforms thoroughly vet borrowers through background checks, credit analysis, financial evaluations, third-party valuations and other due diligence measures. The difference is the efficiency in which fintech platforms are able to complete these processes. Alternative lenders with direct lending capabilities that can close loans with the capital they control are the most effective in streamlining the loan underwriting process.

After the loan is underwritten, underwriters also can ensure borrowers are in compliance with the loan provisions. Unlike large banks and traditional lenders, alternative lenders can often make decisions on a case-bycase basis if there are any issues.

MATCHING BORROWERS AND INVESTORS

Credible alternative lending platforms have an experienced team on staff to ensure borrowers and investors are matched appropriately. An accredited investor with $250,000 in capital has different needs than a casual investor looking to invest $2,500. Underwriting professionals should help investors ensure that loans are in line with their specific risk tolerance, diversification needs, timetable and portfolio strategy. Permanent and bridge loans are often less risky because they are secured by a first-lien position against the property, while equity loans offer a permanent stake in the property but don’t have a defined rate of return or term of repayment. Both parties need to be educated about the terms of the loan, and loans need to be originated and unwritten accurately.

Fintech platforms are changing the loan underwriting process for the better, giving borrowers and investors quicker access to loans and personalized, flexible service. While there is certainly still a place for traditional lenders in the CRE space, they will need to improve their use of technology and streamline the underwriting process if they are going to compete for the large amount of capital entering the market in the coming months and years.


by
GARY BECHTEL,
President, Money360
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Will Rising Rates Affect Marketplace Lending? February 27, 2017

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SAN DIEGO—There is a lot of uncertainty on the horizon this year. From regulatory changes to rising interest rates, there are a handful of changes that could affect the commercial real estate sector. For marketplace lenders, like Money360, however, rising interest rates aren’t a major concern, especially for bridge loan products. Permanent loans may see more of an impact, but—even with some regulatory easing—leverage constraints from traditional lenders will continue to drive activity in the burgeoning marketplace lending space, according to Money360 president Gary Bechtel.

That is great news for marketplace lending, which has seen tremendous growth in the last several years. We sat down with Bechtel at the recent MBA CREF Multifamily Conference in San Diego to discuss the growing market and how some of these changes might impact the growth. Watch the full video interview to hear about Money360’s growth plans, how rising interest rates will impact the market, and how they are continuing to stay competitive as more new players enter field.

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Fintech Is Bridging the Gap
Alternative platforms are creating opportunities to fund more loans - June 5, 2017

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The traditional commercial real estate loan underwriting process is less than efficient. The strict operating guidelines imposed on banks through regulations such as the Dodd-Frank Act and the Basel III capital-reserve rules make it difficult for them to approve many new commercial real estate loans, or even to refinance their maturing loans.

While traditional lenders often create an uphill battle for worthy borrowers to be approved, financial-technology (or fintech) lending platforms can operate more efficiently and speedily. They are moving in to fill the void. As a commercial mortgage broker, you should be aware of — and, to the extent possible — participating in this emerging sector to ensure your future business success.

No longer a new field, the fintech industry produced $17.4 billion in investments globally in 2016, with projections for 2017 far exceeding this number. In addition to providing more flexibility for brokers representing borrowers who may not be able to go the traditional financing route, technology-based lending platforms make underwriting a more convenient, quick and transparent experience for brokers and borrowers.

As a result, many more brokers are now choosing alternative-lending platforms instead of traditional lenders, which benefits brokers and allows them to better serve clients by speeding up the loan-approval and closing process.

Technology benefits

The advanced technology employed by fintech-lending platforms vastly increases the transparency of loan transactions and streamlines the process for brokers and their borrowers. Brokers and borrowers can be updated during each step of the underwriting process, improving communication and providing easy access to the latest information so appropriate parties are notified about additional requirements in a timely matter.

Alternative-lending platforms with direct-lending capabilities use technology to quickly fund borrowers’ loans and match the loans with various investor requirements after funding. While banks, issuers of commercial mortgage-backed securities and other more traditional lenders can take two to four months to close a deal, technology allows many marketplace lenders to have a more streamlined process that results in loan closings in as few as two to four weeks.

Of course, technology is only as good as the people behind it, and human judgement should always be at the center of every loan. Technology is a good starting point, but lending platforms should always have a team of qualified professionals with experience in real estate financing to walk brokers, borrowers and investors through the process and answer any questions. During the underwriting phase, which often has complex requirements and terms that are unique to each deal, professionals should be part of the process of educating borrowers and brokers.

Borrower evaluation

Marketplace lenders that are direct lenders not only can close quickly, they also can offer greater flexibility in underwriting than banks and traditional lenders, and can work with brokers to structure transactions that work well for all parties involved. Brokers appreciate that marketplace lenders can offer multiple product types, ranging from bridge loans to permanent loans, so they can be a one-stop shop for their borrowers.

As with traditional lenders, fintech-lender rates run the gamut from bridge rates (8 to 10 percent) to permanent financing (4 to 6 percent) and everything in between. Fintech companies, like traditional lenders, typically pay brokers fees for loan referrals. Each company’s fee may vary, but brokers don’t have to worry about sacrificing their own fee structure when placing their borrower with a marketplace lending platform instead of a bank or traditional lender.

“ The fintech industry produced $17.4 billion in investments globally in 2016, with projections for 2017 far exceeding this number. ”

As with traditional lenders, credible fintech-lending platforms thoroughly vet borrowers through credit evaluation, background checks, financial analysis, third-party valuations and other due-diligence measures during the underwriting process. The efficiency in completing due diligence, however, is paramount in facilitating a timely closing.

Fintech platforms offer opportunities to brokers’ clients who may not be able to access loans through traditional means. Successful closings will vary based on an alternative lender’s underwriting criteria and funding sources. The greatest success will come from fintech lenders with direct-lending capability that can close loans very quickly with capital they control.

Personalized service

One benefit for borrowers using a fintech platform that often isn’t found with larger banks and other traditional lenders is the consistent communication and personalized service. This allows underwriters to evaluate each situation as it comes up, instead of imposing overarching rules that may not apply to a given situation.

Business and real estate cycles vary. Fintech lenders are often able to make decisions on a case-by-case basis, which isn’t always the outcome with larger banks and other traditional lenders.

After the loan is underwritten, online marketplace lenders can work with borrowers to ensure they are in compliance with all loan provisions. If there are any issues, lenders can work with the borrower and broker to resolve the situation, often providing more flexible and creative solutions than are typically found with banks and traditional lenders.

• • •


The one-size-fits-all underwriting process inherent in traditional bank lending is often overcome with alternative-lending platforms. Marketplace and other fintech-lending platforms are changing commercial real estate underwriting for the better, giving brokers and their clients better access to loans, and quicker loan closings.

Evan Gentry is the CEO and founder of Money360, the leading commercial real estate marketplace-lending platform that caters to institutional and accredited investors. He has nearly two decades of experience in the real estate industry and also currently serves as CEO of G8 Capital, a real estate private-equity company he founded in 2007. Gentry can be reached at evangentry@money360.com or (949) 528-3615.
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Is Marketplace Lending a Safer Investment Than the Stock Market? - Jun 05, 2017

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Alternative investment vehicles are coming into the market that are becoming particularly attractive when investing with a low appetite for risk.

Today, there are so many different opportunities for investment it can be a challenge to identify the best fit for your capital. While equities are often thought to yield high returns with fairly low risk, it takes time for them to fully develop and come to fruition. Alternative investment vehicles are coming into the market that are becoming particularly attractive when investing with a low appetite for risk.

The genesis of marketplace lending

Advancements in technology, coupled with the recent financial crisis, created opportunities for innovative lending options to flourish. Enter marketplace lending, which matches investors with borrowers through the use of online platforms. The investments run the gamut and include real estate deals, secured business loans, student loans and more.

Marketplace lending platforms can have advantages over traditional financial institutions, often operating with lower overhead and resulting in higher returns for investors and generally lower interest rates for borrowers. Due to these advancements, the loan process is faster and provides liquidity to a somewhat illiquid market.

How marketplace lending compares to stock investments

Prior to funding an asset or loan opportunity, investors typically will evaluate and consider cost, liquidity and risk. Stock market volatility and wavering interest rates are nothing new. The general goal of investing in stock is to acquire a portfolio and build wealth gradually. The stock market is intrinsically designed to grow with time. Typically, this is why stocks are viewed as long-term investments and shareholders hold on to them despite short-term fluctuations in the market.

With consistency and diligence, the stock market can make for a profitable long-term strategy. According to Credit Suisse, as of February 2017, the U.S. averaged 6.4 percent in inflation-adjusted equity return. And while you can’t eliminate risk entirely, you can assuage it by diversifying your asset classes. By this method, if an area of the market is performing poorly, other areas ideally can serve as a means of balance.

Marketplace lending, on the other hand, has consistent returns with lower volatility. Many marketplace lenders allow their loans to be pooled or individually funded, meaning you can diversify by interspersing funds through several smaller loans or lend a greater amount towards a single larger loan. Investopedia names marketplace lending as one of the best investments for high return rates.

This is in part due to the fact that many marketplace lending platforms have transparency in the risk for their lenders. Typically, loan requests are evaluated and assigned an accurate interest rate, as well as a risk rating based on the borrower’s and loan’s characteristics. Essentially, the main risk associated with marketplace lending is that you are loaning to people who may not have been able to get approved through traditional outlets. However, it is up to your discretion on which ratings you will fund. Given the tightened credit environment, marketplace lenders are able to provide financing to those borrowers who may have been jettisoned by their previous lending relationships.

Where to put your funds

Every investor’s situation is different. Both marketplace lending and stock investments have their pros and cons. For some, one may be a better investment than the other. For others still, it may be best to incorporate both. Regardless of where you choose to invest, go in with a plan and customize it to the amount of time you have to reach your unique goals. It is smart to go into the transaction understanding your appetite for risk and overall timeline.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer with CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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New Record & Update: In April Money360 Closed $45M in Real Estate Marketplace Loans - May 18, 2017

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Money360, a leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, bringing the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


“This is a record-breaking month for our company,” indicated Money360 Founder and CEO Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

• A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

• A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

• An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

• A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

• A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

• A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

• A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California


The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200M in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.
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Commercial RE Marketplace Money360 Sees Record Volume in April - May 18, 2017

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We had a great conversation with Money360 founder and CEO Evan Gentry just last week and were favorably impressed by both his leadership and the multi-faceted platform he has created. Each RETech we talk to seems to have a different angle, and what this team has created is unique because they are bringing commercial real estate into the mix, in a sector that often focuses on residential rental properties or house-flipping. In fact, we were scheduled to talk with him on the last day of April and had to reschedule since he was so busy with month end reporting and closings, and from the looks of the press release below, now we understand why. As an asset class, through market highs and lows, real estate continually remains in massive demand from both institutional and retail investors. (Cindy Taylor/Publisher)


Money360, the leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


“This is a record-breaking month for our company,” said Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

· A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

· A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

· An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

· A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

· A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

· A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

· A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.


The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200 million in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.
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Money360 Closes $45M in Commercial Real Estate Loans in April, Breaks Monthly Record - May 17, 2017

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LADERA RANCH, Calif. – May 16, 2017 – Money360, the leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


“This is a record-breaking month for our company,” said Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

• A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

• A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

• An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

• A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

• A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

• A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

• A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.


The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200 million in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.


About Money360:
Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a nationwide, direct lender offering borrowers speed, convenience and reasonable terms on commercial real estate loans from $1 million to $20 million. Money360 operates a marketplace lending platform that provides investors direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Closes $ 45M in Commercial Real Estate Loans in April, Breaks Monthly Record - May 17, 2017

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Money360, a commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.


The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.
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Money360 closes USD45m in commercial real estate loans in April - May 17, 2017

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Money360 closed more than USD45 million in loans in April, a record for a single month, bringing the company’s total production to over USD250 million in closed loans, with an expected USD500 million in transactions by year-end.

Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.

“This is a record-breaking month for our company,” says Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the US and around the world.”
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Money360 Reports Monthly Commercial Loan Originations Record in April - May 17, 2017

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In April Money360 reported a new commercial loan originations record with loan originations of over $45 million; the month’s originations bring its cumulative loan originations total to over $250 million; it expects to surpass total loan originations of $500 million by the end of the year; the company’s commercial loans in April ranged from $3.48 million to $9.70 million and included bridge loans and permanent loans for commercial properties in the US.
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Money360 Closes $45M in Commercial Real Estate Loans in April - May 17, 2017

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Money360, the leading commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.

“This is a record-breaking month for our company,” said Money360 founder and CEO, Evan Gentry. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”

The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.

A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.

An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.

A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.

A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.

A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.

A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.

The record-breaking month follows several major milestones for the company. Earlier this year, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor. One of the company’s funds managed by Money360-affiliate, M360 Advisors, also recently successfully registered with the South Korea Financial Supervisory Service. In March, Money360 surpassed $200 million in closed transactions. It took Money360 more than a year-and-a-half to hit the $100 million mark, but less than six months to increase to $200 million.

About Money360:

Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a nationwide, direct lender offering borrowers speed, convenience and reasonable terms on commercial real estate loans from $1 million to $20 million. Money360 operates a marketplace lending platform that provides investors direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of investors. Borrowers and lenders (investors) can register at www.money360.com.
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$45M+ April sets record for Money360 - MAY. 16, 2017

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Commercial real estate marketplace lender Money360 announced today the more than $45 million in loans it closed in April sets a company record and places it on course to top $500 million in loans by year-end.

“This is a record-breaking month for our company,” Money360 founder and CEO Evan Gentry said. “The volume of deals we’ve experienced in just one month, coupled with our company growth, sets a strong precedent for the rest of 2017, and we’re committed to maintaining high standards for our expansive base of investors and borrowers in the U.S. and around the world.”

None of the properties involved in the $45 million total exceed a 75 per cent loan-to-ratio value. Highlights include a $9.7 million bridge loan for a hotel in Fayetteville, NC, an $8.5 million bridge loan on a office building in Orange County, CA, and a $7.7 million bridge loan on a medical office building in San Jose, CA.

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Does Marketplace Lending Offer Greater Transparency for Your Investment? - March 26, 2017

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The immediacy and accessibility of information in today’s digital age makes the internet uniquely suited as a medium for greater transparency.

Companies that do the bulk of their business online are in many ways more accessible than traditional brick-and-mortar establishments, and that’s particularly true when it comes to marketplace lending.

Marketplace lending, also known as peer-to-peer lending, refers to the practice of matching borrowers and investors through online platforms. These transactions can be based on a number of consumer- or industry-driven needs—anything from student loans to commercial real estate deals. Taking advantage of advanced technology, data-driven algorithms and innovative credit models, these platforms may frequently better serve their client base. They have broad options in terms of asset class and geography, quick response times and lower overhead costs, which can translate to an overall better value for both borrower and investor.

But there’s another important aspect to the growth of marketplace lending: the significant impact of the online platform on transparency.

Long gone are the days of carbon-paper contracts and stale manila files hidden under lock and key. In today’s digitally-driven world, people are looking for immediate access to the information they need to make a business decision, and that requires greater transparency and enhanced access to information that is possible only online.

Listed below are three key reasons why marketplace lending might offer better transparency for both borrowers and investors:

Enhanced access to information

Digital technologies provide greater transparency and actionable intelligence to the marketplace, allowing investors to better understand loan performance and, in many cases, to research potential loan transactions directly and thoroughly from the convenience of their desktop or mobile device.

This can include not only information unique to a prospective borrower, but market information relevant to a particular investment. Investors can study both pool and individual loan performance and quickly identify the strengths and weaknesses of any given portfolio.

Improved uniformity of data

Digital technologies also allow for better consistency of reporting standards, loan origination data and portfolio performance, which leads to better decision-making by investors.

Because many marketplace lenders use technologies that are shared across any given industry, the ability to draw analysis from apples-to-apples comparisons does a lot to enhance overall understanding, which leads to better decision-making.

This is particularly important for investors, who may be attempting to weigh one opportunity against another. When the reporting standards and data are inconsistent, it becomes very difficult to draw the comparisons necessary to make an informed decision.

This consistency of data can also help borrowers, who are researching traditional and non-traditional lenders to determine the best options. Online markets provide easy access to loan-level data, rates and terms and disclosures.

Speed and flexibility

These digital technologies enhance the speed and efficiency of a transaction, many times providing real-time data afforded by the ability to better monitor information associated with a particular deal.

Marketplace lending platforms can do much if not all of the processing for a transaction online. There’s no need to drive to an office for a face-to-face meeting. Research, analysis and correspondence can be done at any time via computer, and in some instances the response on a loan or investment request can be immediate.

Yes, there will be some in the industry who will not clearly disclose information to borrowers and investors. Those actors will be systematically weeded out of the marketplace as both borrowers and investors continue to search out reputable companies to manage their business.

Marketplace lending is a global industry that is growing rapidly as it responds to a systematic need. The industry’s open access to data is crucial to its ongoing development. Clearly, transparency in all transactions will be a major tenant of the industry and it will be a driving factor to its ongoing success.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer with CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Money360 Exceeds $200mn in Commercial Real Estate Lending - March 17, 2017

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Money360 has reported another milestone in the nascent online lending commercial real estate market; the firm has originated $100 million in new commercial real estate loans in the past six months, doubling its total from August 2016; four recent loan closings for a total of $38 million helped the company reach its $200 million milestone; Money360 says it expects to exceed $500 million in loan transactions by the end of 2017.
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Money360 Doubles Loan Portfolio, Exceeds $200 Million Mark - March 17, 2017

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Money360 Doubles Loan Portfolio, Exceeds $200 Million Mark

Leading fintech company is on track to hit $500 million in commercial real estate loans by year-end

Money360, the leading commercial real estate marketplace lending platform, has doubled its portfolio in record time, having surpassed the $200 million mark this month in closed commercial real estate loans, the company announced today.
It took Money360 more than a year and a half to hit the $100 million mark, but less than six months to increase to $200 million, and by year-end, it expects to exceed $500 million in transactions.
“This is a time of phenomenal growth for our company,” said Money360 Founder and CEO Evan Gentry. “We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage.”
Last month, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor to help shape strategy and further accelerate the company’s growth and positioning. Additionally, the company recently announced that one of its funds managed by Money360 affiliate, M360 Advisors, successfully registered with the South Korea Financial Supervisory Service. Earlier this year, Money360 also established two new regional divisions to support increasing demand in the Northeast and Northwest regions of the United States.
“The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry,” Gentry said. “Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape.”
The $200 million milestone came on the heels of four recent loan closings totaling nearly $38 million. All of these loans represent a loan-to-value ratio of not more than 75 percent and include:
A $16.2 million bridge loan for a single-tenant, 71,132-square-foot office property constructed in 2006 located in Rosemont, Illinois. The building includes two hydraulic elevators, a central breakroom, executive suite, conference room, large meeting room, computer training room, fitness center and locker rooms with showers.
A $12.3 million bridge loan for a single-tenant suburban office property in Auburn Hills, Michigan. The 36-month loan enabled the borrower to take cash out for the purpose of purchasing additional investment property.
A $7.5 million bridge loan for two industrial buildings in Irvine, California. The loan provided a cushion of time for the purchase to transpire. A $1.9 million permanent loan for an unanchored, 100-percent-leased retail property in Smyrna, Georgia. The 10-year loan places financing on an otherwise free and clear property, providing significant cash out for future commercial real estate acquisitions. About Money360 Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Doubles Loan Portfolio, Exceeds $ 200 Million Mark (Yahoo! Finance), Rated: AAA - March 17, 2017

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Money360 has doubled its portfolio in record time, having surpassed the $200 million mark this month in closed commercial real estate loans, the company announced today.
It took Money360 more than a year and a half to hit the $100 million mark, but less than six months to increase to $200 million, and by year-end, it expects to exceed $500 million in transactions.
The $200 million milestone came on the heels of four recent loan closings totaling nearly $38 million. All of these loans represent a loan-to-value ratio of not more than 75 percent and include: A $16.2 million bridge loan for a single-tenant, 71,132-square-foot office property constructed in 2006 located in Rosemont, Illinois.
- A $12.3 million bridge loan for a single-tenant suburban office property in Auburn Hills, Michigan.
- A $7.5 million bridge loan for two industrial buildings in Irvine, California.
- A $1.9 million permanent loan for an unanchored, 100-percent-leased retail property in Smyrna, Georgia.
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Money360 Doubles Loan Portfolio, Exceeds $200 Million Mark - March 16, 2017

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LADERA RANCH, CA--(Marketwired - March 16, 2017) - Money360, the leading commercial real estate marketplace lending platform, has doubled its portfolio in record time, having surpassed the $200 million mark this month in closed commercial real estate loans, the company announced today.

It took Money360 more than a year and a half to hit the $100 million mark, but less than six months to increase to $200 million, and by year-end, it expects to exceed $500 million in transactions.

"This is a time of phenomenal growth for our company," said Money360 Founder and CEO Evan Gentry. "We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage."

Last month, industry leader and Prosper Marketplace president Ron Suber joined Money360 as an investor and strategic advisor to help shape strategy and further accelerate the company's growth and positioning. Additionally, the company recently announced that one of its funds managed by Money360 affiliate, M360 Advisors, successfully registered with the South Korea Financial Supervisory Service. Earlier this year, Money360 also established two new regional divisions to support increasing demand in the Northeast and Northwest regions of the United States.

"The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry," Gentry said. "Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape."

- The $200 million milestone came on the heels of four recent loan closings totaling nearly $38 million. All of these loans represent a loan-to-value ratio of not more than 75 percent and include:

- A $16.2 million bridge loan for a single-tenant, 71,132-square-foot office property constructed in 2006 located in Rosemont, Illinois. The building includes two hydraulic elevators, a central breakroom, executive suite, conference room, large meeting room, computer training room, fitness center and locker rooms with showers.

- A $12.3 million bridge loan for a single-tenant suburban office property in Auburn Hills, Michigan. The 36-month loan enabled the borrower to take cash out for the purpose of purchasing additional investment property.

- A $7.5 million bridge loan for two industrial buildings in Irvine, California. The loan provided a cushion of time for the purchase to transpire.

- A $1.9 million permanent loan for an unanchored, 100-percent-leased retail property in Smyrna, Georgia. The 10-year loan places financing on an otherwise free and clear property, providing significant cash out for future commercial real estate acquisitions.

About Money360

Money360 is transforming commercial real estate finance into a fast, transparent and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Money360 Doubles Loan Portfolio & Surpasses $200 Million Transaction Mark - March 16, 2017

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Commercial real estate marketplace lending platform Money360, announced on Thursday it has officially doubled its portfolio and surpassed the $200 million mark this month. The lender reported it took more than a year and a half for its platform to hit the $100 million and less than six months to increase to $200 million. It expects to exceed $500 million in transactions by the end of 2017.

While sharing more details about the platform’s milestones, Money360 Founder and CEO, Evan Gentry, stated:

“This is a time of phenomenal growth for our company. We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage.”

The news about Money360’s portfolio expansion and transaction milestone comes just a couple months after industry leader and Prosper Marketplace president Ron Suber joined its platform as an investor and strategic advisor. The company also announced that one of its funds managed by Money360 affiliate, M360 Advisors, successfully registered with the South Korea Financial Supervisory Service. Gentry added:

“The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry. Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape.”
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Money360 tops $200M - March 16, 2017

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Commercial real estate marketplace lending platform Money360 has surpassed $200 million in closed commercial real estate loans, the company announced today.

The milestones are coming faster. After taking more than 18 months to hit the $100 million plateau, Money360 took less than six months to get to $200 million and expects to reach $500 million before 2018.

“This is a time of phenomenal growth for our company,” Money360 founder and CEO Evan Gentry said. “We are seeing a rapid expansion of our loan portfolio and increasing interest from investors. But amidst this rapid growth, we remain committed to maintaining the highest standards of credit quality and being good stewards of the capital our investors have entrusted us to manage.”

The achievement comes on the heels of a string of recent announcements. Money360 recently added Prosper Marketplace president Ron Suber as an investor and strategic advisor. One of the funds managed by affiliate M360 Advisors successfully registered with the South Korea Financial Supervisory Service. Money360 also established two regional divisions in the Northeast and Northwest.

“The impressive growth of our platform shows that marketplace lending is a much-needed innovation that is filling a void in the commercial real estate industry,” Mr. Gentry said. “Money360 is leveraging the benefits of technology and helping to meet the needs of a shifting landscape.”
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How Liquidity Promotes Opportunity, Yield and a Greater Public Good - March 6, 2017

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Access to capital is the lifeblood of the commercial real estate industry. It’s what allows a buyer to close an acquisition, enables expansions and renovations of properties and keeps projects afloat when a maturing loan comes due.

In the first six months of this year alone, roughly $65.6 billion in CMBS debt will come due, mostly on office and retail properties, according to Trepp, one of the industry’s leading providers of data and analytics. In February alone, more than 7 percent of that debt had fallen into default, Trepp reported, while 15 percent has been transferred to special servicing.

Clearly, the wave of maturing debt for commercial real estate properties has not yet subsided. These are still worrisome times for many in the real estate industry, and while traditional bank lenders remain constrained by the regulations enacted by Dodd-Frank and Basel III, alternative lenders in large part have been filling the void and providing the liquidity this industry needs to stay afloat.

A lifeline for viable projects
Alternative lenders, such as marketplace lenders, have benefitted from a significant flow of tens of billions of dollars invested over the past few years to help fund worthwhile commercial real estate ventures that traditional banking institutions would be unable to fund.

According to Innovate Finance, global fintech hit a record high in 2016, with as much as $17.4 billion in investments. Many industry projections put anticipated capital flow for 2017 even higher as prudent investors seek out higher yields backed by short-term loans on income-producing properties.

Alternative lenders, now flush with investment capital, are often able to look beyond the stringent underwriting criteria and one-size-fits-all checklist approach forced upon traditional lenders through these recent risk retention rules.

Access to alternative lending doesn’t mean that everyone can get a loan—due diligence in the underwriting process is still very important,—but it does open opportunities for borrowers who may have experienced a temporary setback, yet have projects that are not only viable, but promising investments.

Commercial real estate marketplace lenders will typically provide a range of funding options, from bridge to permanent loans, which can be tailored to meet the needs of the borrower and support ongoing growth in the market.

Another benefit to marketplace lending is its accessibility. Many platforms offer online services that can be accessed any place, any time. A common term applied to this phenomenon has been the “democratization” of lending—opening the availability of capital to a much broader range of borrowers.

Good for commercial real estate and the economy

Access to financing options and capital is what drives a robust market and that, in turn, stimulates jobs and growth in broader economic circles.

Development and construction of new office, industrial, warehouse and retail continues to be a powerful contributor to the U.S. economy, supporting roughly 3.2 million American jobs and contributing $450 billion to the U.S. GDP in 2015, according to NAIOP, the nation’s largest commercial real estate development association. The same principles hold true for commercial real estate renovations and upgrades, which by and far are the predominant reasons for capital transactions nationwide.

We frequently lose sight of the underlying significance of the projects we support through our work as commercial real estate professionals.

Commercial real estate creates opportunity for entrepreneurs, work spaces for jobs and storefronts for retail. It fuels commerce and promotes ancillary economic benefits that not only stretch into virtually all industries, but indirectly support millions of families nationwide.

That’s the underlying good in what we do.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Fintech Investor Ron Suber Has Been Busy in 2017 - March 3, 2017

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Ron Suber, President of Prosper often contacts us when there is a new deal closing to report, and we must say, has been a “little busy” lately.

Since January, we’ve reported that he invested in Credible, an online exchange for funding and refinancing student loans. Then we learned just a few weeks back that he had invested with Unison Home Ownership Investors. Just last week, it was announced that Prosper had secured a $5B loan purchase agreement from some major institutional players. Then on March 1, it was announced that he just invested in Money360-a real estate investment marketplace. If you want to know where the hot categories of P2P and marketplace lending are in fintech, watch where he’s investing. (Cindy Taylor/Publisher)

“Ron Suber, Prosper Marketplace President and prominent Fintech investor, has taken a stake in Money360 – a fast growing real estate investment marketplace. Suber will also play an active role as a Strategic Advisor to Money360 to help boost platform growth.

Money360 has grown exponentially. The real estate crowdfunding platform has just topped $200 million in closed commercial real estate loans. By the end of the year, Money360 expects to surpass $500 million in real estate lending. It took Money360 one year to originat $100 million in loans and 6 months to reach $200 million. Money360 predicts this type of growth will continue going forward.

Recently, Money360 affiliate M360 Advisors registered its fund with the South Korea Financial Supervisory Service thus clearing the way for a $250 million pledge from a longstanding South Korean financial institution.

Suber may be the most active individual Fintech investor in the world. He was there for the A round in SoFi – now one of the largest Fintech companies in operation.

Suber has continued his investment activity into a wide-ranging portfolio of promising and innovative financial firms.”
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Prominent Fintech Investor & Prosper President Ron Suber Invests in Money360, Joins as Strategic Advisor - March 1, 2017

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Ron Suber, Prosper Marketplace President and prominent Fintech investor, has taken a stake in Money360 – a fast growing real estate investment marketplace. Suber will also play an active role as a Strategic Advisor to Money360 to help boost platform growth.
Money360 has grown exponentially. The real estate crowdfunding platform has just topped $200 million in closed commercial real estate loans. By the end of the year, Money360 expects to surpass $500 million in real estate lending. It took Money360 one year to originat $100 million in loans and 6 months to reach $200 million. Money360 predicts this type of growth will continue going forward.
Recently, Money360 affiliate M360 Advisors registered its fund with the South Korea Financial Supervisory Service thus clearing the way for a $250 million pledge from a longstanding South Korean financial institution.

Suber may be the most active individual Fintech investor in the world. He was there for the A round in SoFi – now one of the largest Fintech companies in operation. Suber has continued his investment activity into a wide-ranging portfolio of promising and innovative financial firms.

Crowdfund Insider contacted Suber to ask him where he sees growth opportunity for Money360.

Suber explained;
“I have been investing in the loans from Money 360 for my personal family office for many months. I have enjoyed the risk-adjusted returns, investment structure and liquidity options. Upon completing additional due diligence, I have decided to personally buy equity in the company and become a strategic advisor to the management team/Board of Directors. This team and product: collateralized commercial real estate, has just scratched the surface of potential interest from individual and institutional investors around the world. Money 360 has created a new fixed income asset class comprised of commercial real estate in a structure that was previously unavailable to many.”

Money360 founder and CEO, Evan Gentry, said Suber is a perfect cultural and strategic fit for his company;

“Ron is the leading thought leader and voice for marketplace lending and the financial technology industry,” Gentry said. “We are thrilled to officially bring him on board and gain access to his expertise and deep business network.”

Asked about his expectation for the real estate sector over the next few years, Suber stated;

“I remain bullish on the opportunity that the online lending industry has to help the borrowers and investors across consumer loans, residential and commercial real estate, mortgages, small business, franchises, insurance and more.”

Suber joins other Money360 equity investors and advisors including Jon Barlow, former founder and CEO of Eaglewood Capital; John Maute, former co-founder of Helios AMC, senior managing director of Situs Holdings and a senior executive with GMAC Commercial Mortgage; and Hugh Ross, a former business executive with BP, Morgan Stanley and Glencore.
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Prosper Marketplace President and Industry Leader Ron Suber Invests in Money360 and Joins as Strategic Advisor - March 1, 2017

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LADERA RANCH, CA--(Marketwired - March 01, 2017) - Industry leader and Prosper Marketplace president Ron Suber has invested in Money360 and will serve as a strategic advisor to the company. Suber will help shape strategy and further accelerate Money360's growth and positioning as the leading commercial real estate marketplace lending platform.

Suber is a longtime leader in the fintech and financial services industries. Prior to joining Prosper in 2013, he served as Managing Director at Wells Fargo Securities. Previously, Suber served as the Head of Global Sales and Marketing and Senior Partner for Merlin Securities. He also served as President of Spectrum Global Fund Administration, and spent 14 years at Bear Stearns where he served as Senior Managing Director and Manager of Global Clearing Sales. He is a regular speaker at alternative finance conferences, is a keynote speaker at many conferences including the upcoming LendIt USA conference, and is one of the foremost advocates for the online lending industry.

"The desire for secured debt investments in U.S. commercial real estate assets from accredited investors and institutions around the world remains insatiable," Suber said. "The risk-adjusted returns and liquidity distributions provided by Money360 are among the most attractive in the asset class."

As a leading marketplace lender in the industry, Money360 has seen robust growth with record-breaking monthly loan origination volume, the establishment of two new regional divisions to support increasing demand in the Northeast and Northwest regions of the United States, and the registration by South Korea's Financial Supervisory Service of a commercial real estate debt fund managed by Money360-affiliate, M360 Advisors.

Money360 founder and CEO, Evan Gentry, said Suber has already been investing in Money360's loans and that he is a cultural and strategic fit for the company.

"Ron is the leading thought leader and voice for marketplace lending and the financial technology industry," Gentry said. "We are thrilled to officially bring him on board and gain access to his expertise and deep business network."
Suber joins other Money360 equity investors and advisors including Jon Barlow, former founder and CEO of Eaglewood Capital; John Maute, former co-founder of Helios AMC, senior managing director of Situs Holdings and a senior executive with GMAC Commercial Mortgage; and Hugh Ross, a former business executive with BP, Morgan Stanley and Glencore.

"I have enjoyed getting to know the management team and board of Money360 these past few years," Suber said. "Personally, as a debt investor in loans from Money360, I became familiar with the loan product, quality and institutionalization of the platform. The opportunity to become an investor at the company level and help advise the executive team to continued success is most exciting."

About Money360.

Money360 is transforming commercial real estate finance into a fast, transparent, and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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The Pros and Cons of Proposed Federal Charters for Fintech

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Should Fintech companies that offer banking-related products be granted special purpose national bank charters? The answer, from the U.S. Office of the Comptroller of the Currency (OCC), is “yes.”

Things are vastly different from when Abraham Lincoln first established the national banking system and the Office of the Comptroller of the Currency back in 1863. Today’s financial services industry is diverse and evolving, prompting the OCC to say there’s a need to develop a framework to support responsible innovation in the federal banking system.

More than 85 million Millennials have entered into the U.S. financial marketplace and with them came the emergence of thousands of technology-driven non-bank companies offering new approaches to financial products and services. The number of Fintech companies in the U.S. and the U.K. has in five years ballooned to more than 4,000 and grown to $24 billion worldwide.

“New technology makes financial products and services more accessible, easier to use and much more tailored to individual consumer needs,” Comptroller of the Currency Thomas J. Curry wrote in a December 2016 report supporting the concept of setting up a structure to regulate these emerging platforms. “If the OCC decides to grant a charter to a particular Fintech company, the institution would be held to the same rigorous standards of safety and soundness, fair access and fair treatment of customers that apply to all national banks and federal savings associations.”

The OCC currently charters just three specific types of special-purpose national banks that do not accept deposits. Those include bankers’ banks, credit card banks and trust banks. It is now proposing to extend the opportunity to apply for those special purpose charters to firms that participate in lending money, paying checks or receiving deposits.

“Preventing this class of companies from having that same option hurts the nation’s dual banking system and could make the federal banking system less capable of adapting to the evolving business and customer needs of tomorrow,” Curry said.

The pros

In general terms, better oversight—albeit voluntary—helps to protect consumers, particularly those who may be vulnerable to predatory lending practices that are unfair or abusive.

It could also help to lower the cost of capital and promote economic growth.

The special charter proposal also allows regulators and companies to vet risks and gauge a company’s change of success. It levels the playing field by applying the same statutes that currently apply to national banks to those Fintech companies that choose to apply for the national charter.

In addition, it would increase supervisory standards to provide enhanced transparency and compliance in the national financial industry. This would include a “top-down, enterprise-wide” commitment to understanding and adhering to applicable laws and regulations, according to the OCC.

The cons

While in some ways the national charter option could help reduce the cost of capital in the marketplace through heightened market competition, there are other ways in which it may actually make it more expensive.

Compliance with the national standards can be very expensive, and that could drive up operating costs for Fintech companies deciding to go national. This is particularly true for consumer finance companies that grant unsecured loans based solely on the borrower’s ability to pay. Consumer credit is based in large part on risk-based pricing that with further regulation could become cost-prohibitive to those who need it most: the nation’s most vulnerable borrowers.

This is an issue that will be playing itself out the months ahead. Regardless of the outcome, borrowers and investors should always be prudent in their financial dealings and do their own due diligence before signing on the dotted line.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Money360 Funds $8.3 Million Bridge Loan for Jacksonville, Illinois Retail Center

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Commercial real estate marketplace lending platform, Money360, announced on Wednesday it has provided a bridge loan to the owner of a retail center in Jacksonville, Illinois.

According to Money360, the $8.3 million loan is allowing the borrower to pay off a maturing loan on the Lincoln Square Center, a 206,257-square-foot anchored retail property that is currently 82 percent occupied by a combination of 29 national and regional tenants. The center was built in 1964 with renovations in 1992 and 1994 that upgraded the façade and made other improvements. It is located within a major retail area with several national outlets nearby.

Money360 founder and CEO, Evan Gentry, added:

“The borrower on this loan was facing loan maturity. The Lincoln Square center is a viable investment, and our bridge loan enables the owner to continue to do business until permanent financing is secured or the center is sold.” The interest-only loan has a fixed rate and a 12-month term. The loan-to-value ratio on the transaction was 74.6%.
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Money360 Funds $8.3 Million Bridge Loan for Illinois Retail Center

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LADERA RANCH, CA--(Marketwired - February 01, 2017) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided a bridge loan to the owner of a retail center in Jacksonville, Illinois.

Money360's $8.3 million loan allowed the borrower to pay off a maturing loan on the Lincoln Square center, a 206,257-square-foot anchored retail property that is currently 82 percent occupied by a combination of 29 national and regional tenants. The center was built in 1964 with renovations in 1992 and 1994 that upgraded the façade and made other improvements. It is located within a major retail area with several national outlets nearby. The borrower has owned the property since 1981.

Money360's interest-only loan has a fixed rate and a 12-month term. The loan-to-value ratio on the transaction was 74.6%.

"The borrower on this loan was facing loan maturity," said Money360 founder and CEO, Evan Gentry. "The Lincoln Square center is a viable investment, and our bridge loan enables the owner to continue to do business until permanent financing is secured or the center is sold."

About Money360

Money360's vision is to transform commercial real estate finance into a fast, transparent, and reliable marketplace for borrowers and investors. Money360 is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans . Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Real estate briefly: Pinnacle buys office complex for $40 million; Willis new GM of golf for Irvine Co. Resort Properties

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Milestones

Money360, a real estate lending platform in Ladera Ranch, reported it closed a record $35.6 million in commercial real estate loans in December. December’s transactions reflect short-term bridge loans for a mix of property types, including retail, office and industrial in California, Florida and Illinois. A total of five properties were financed, including a one-story suburban office building in Irvine; a three-building industrial complex in Richmond; a seven-building anchored retail property in Orlando, Fla.; a three-story suburban office building in Palm Harbor, Fla.; and a three-story office property in Rosemont, Ill.
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Podcast: Evan Gentry of Money360

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Money360 is a commercial real estate lending platform focused on large income producing properties.

I first mentioned Money360 on Lend Academy way back in 2010. Back then they made an initial foray into marketplace lending but the timing was not right. Four years later they relaunched the company and have had much more success the second time around.

Our next guest on the Lend Academy Podcast is Evan Gentry, the CEO and founder of Money360, a marketplace lending platform focused on commercial real estate. Like many entrepreneurs Evan’s experience led naturally to the establishment of his current company where they are making large commercial loans available to individual and institutional investors.

In this podcast you will learn:
  1. Evan’s background and how it helped him launch Money360.
  2. Why the timing wasn’t right when they initially launched back in 2010.
  3. Why 2014 was a better time to launch Money360.
  4. How they are different from the other online real estate platforms.
  5. Why they decided to focus on commercial real estate.
  6. Why Evan believes that a platform should not do both debt and equity deals.
  7. The two different types of loan products that Money360 offers.
  8. The number of loans and total loan volume they have closed to date.
  9. How they find the deals that they put on their platform.
  10. The areas of the country where they are doing deals today.
  11. Their approach to credit underwriting.
  12. Evan’s view of we are in the economic cycle as it applies to real estate.
  13. The average loan to value rate on their loan portfolio.
  14. The details about their new investor fund.
  15. What is in store for Money360 in 2017.
PODCAST TRANSCRIPTION SESSION NO. 83: EVAN GENTRY Welcome to the Lend Academy Podcast, Episode No. 83. This is your host, Peter Renton, Founder of Lend Academy.

Peter Renton: Today on the show we are talking real estate, commercial real estate to be exact. I am delighted to welcome the CEO & Founder of Money360, Evan Gentry. Now I actually first met Evan back in 2010 or at least met him online when he was just getting Money360 started. Now they didn't actually launch until 2014, we'll talk about what happened there in the show, but he's been around this industry for a long time and he decided that he would focus his business on commercial property and it's a really interesting space. They're still a relatively new company, but they are gaining traction and I think they have something that is quite a compelling offering. Most of the companies in this space are focusing on fix & flip properties, this is a way to diversify into a different type of real estate. We talk quite a bit about the kinds of projects they are funding, how they have been able to get traction and talk about their underwriting and their loan volume and spend quite a bit of time on the investor side of their business. Hope you enjoy the show!

Welcome to the podcast, Evan.

Evan Gentry: Hey, thank you, glad to be with you, Peter.

Peter: Okay, so let's just get started. Tell us a little bit about yourself and your background before you started Money360.

Evan: You bet, Money360 is actually my third kind of major venture. My first company I started in college was a mortgage technology company where we would contract with banks and they would outsource their residential mortgage business to us. We started that in the late 90's, grew it up to through kind of mid 2000's. We got to the point where we were originating billions a year in terms of loan volume for clients like E-Trade, Zions Bank and other regional and national banks in the US.

We had 50 bank clients by 2006, we sold the company to a spin-off of GE Capital in 2006 and then I stayed on for a year as the CEO of our group and then launched my second venture, G8 Capital. G8 Capital is a real estate investment group that acquires distressed and nonperforming real estate assets primarily in the commercial real estate space. So we were very active from 2007 to 2014 and then really started ramping up Money360 in 2014 and that's our primary focus today, is what we're doing at Money360.

Peter: Okay, so I know that we actually first communicated back in 2010. I was actually going back and looking at some of my...really the earliest blog posts that I ever put on Lend Academy. We actually mentioned your company because you did start something back then. Just tell us a little bit about the genesis and the early days and then it sounds like you came and re-launched or...just tell us what happened in that time period.

Evan: You bet, I've been a big believer in peer to peer lending which we now call marketplace lending, but since the very beginning strategically applying technology to the lending industry in many cases replacing unnecessary middlemen such as banks and investment banks I believe can add incredible value to both borrowers and the investors. I originally launched Money360 in 2010, at that time we were the first peer to peer real estate lending platform. I was a follower of what you were doing (Peter laughs) really from the very beginning and we had some initial dialogue back then, but as you know in 2010 the regulations were not...the timing wasn't right to scale the business. Regulations did not allow us to market online so we were limited and we were following the counsel of our attorneys. We could basically only market to our current investors and those that we knew which was very limiting if we wanted to scale the business; the timing just wasn't right. At G8 Capital we were very busy 2010 to 2014 acquiring hundreds of millions of distressed assets from the banks so that kind of became our primary focus during that time. By 2014, the distressed acquisition side of that business really slowed down and I saw the opportunity to really jump in with Money360, the regulations caught up to what we needed to do there with the JOBS Act so it was the right timing for us to jump in, in 2014...

Peter: Okay.

Evan: ....but had the vision all the way back in 2010 of the potential. I am a huge believer in the space.

Peter: I know because at the time I wrote about it because it was the only real estate offering available. I always thought It was a great fit for the peer to peer lending model, the marketplace lending model and real estate. Obviously now we are in a very different time and there's many, many platforms. Evan: Yeah.

Peter: So let's just go then...let's just talk about Money360. Can you explain...just tell us exactly what you do and what part of the market you're focusing on?

Evan: Yeah, so we provide financing on commercial real estate properties including office buildings, industrial buildings, retail centers, hospitality, multi-family apartment complexes. We do not do development loans, we do not do land loans; we focus on income producing commercial real estate properties. Our loans are typically between $1 million and $15 million. For example, just this last week we closed a loan here in LA County, it was a $10 million financing on an office property. They had a loan that was maturing and they had a very short window, they had to get new financing so stepped in and provided that financing to them, but for the borrowers we're offering multiple products.We have our bridge loan product, and then we also have some permanent loan products and we provide them a good opportunity to get new financing. For the investors, we're giving them an opportunity to invest in something that was previously not available to them from an investment perspective. So we feel like we’re creating great opportunity in the market, both for the borrowers and for the investors.

Peter: I'm curious about how you think...obviously you are different…most of the other real estate platforms are doing residential fix & flip, focusing on the bridge financing business and you're focusing on commercial properties. When you think about your business and the industry itself, what makes you different from the other platforms would you say?

Evan: Although there's a lot of, well I don’t want to say noise, but a lot of players in the real estate sector, we are quite unique in what we do in that we only provide first position or first lien debt on income-producing commercial real estate properties and we're laser focused on that, and we do it very, very well. Many of our peers are different in that there are many that are primarily or exclusively focused on as you mentioned the residential fix & flip market. I actually know that business very well. At G8 Capital, we fixed & flipped about 4,000 homes… Peter: Wow! (laughs)

Evan: ...that's across the country. I know that business very well, we’ve done a lot of that. It's not a bad business, but the business of flipping homes is a bit fickle and the opportunities come and go with economic and housing cycles.

Peter: Right.

Evan: So we've chosen to focus on financing commercial real estate properties as we believe that this a much more stable and long term business model. There's always a need for commercial real estate financing in both the up and down markets. You just have to adjust your underwriting and loan to value accordingly.

Peter: Right.

Evan: The last point I'll make on that in terms of how we're different from our peers is I believe that we have the most experienced team in this space. You know, we're a technology-enabled platform but our team members, we have about 20, we average 20 to 30 years experience in the industry in our specific areas, whether it's underwriting or technology or originations and so we have a very experienced team which I believe sets us apart substantially from our peers.

Peter: Right, right. On that, I guess with G8 Capital did you do much commercial property? You said you did distressed real estate a lot, was there much commercial in that?

Evan: Yeah, actually the majority ended up being commercial so at G8 we started, in 2007, buying non-performing residential loan portfolios then we moved into buying REO portfolios, a lot of them was from like Fannie Mae, Freddie Mac and from the major banks. By about 2011, we had transitioned to where we were primarily focused on, non-performing commercial real estate loans, so we acquired I’d say about $400 million of non-performing commercial real estate loans between 2011 and 2014. And the team I had developed by 2014, when we launched Money360 our team was primarily focused around commercial real estate loans, underwriting commercial real estate loans, acquiring them, doing workouts with these borrowers where necessary. Acquiring the distressed loans from the banks who had made very high loan-to-value, 90% loan-to-value loans, long terms loans…during the great recession those banks obviously sold those loans and we were the very active buyer so it was a very natural transition for a lot of our team members to move from the G8 focus to what we're doing at Money360.

Peter: Right, makes sense. So you're only doing debt deals then, you're not doing equity at all?

Evan: We do not do any equity deals. Yeah, we are strictly doing debt and again, that sets us apart from a number of others in the kind of real estate crowdfunding space and I’ll…I believe that there's a really good market for real estate crowdfunding on the equity side, but I have a pretty strong opinion that I don't believe that the same platform should be doing debt and equity. I think they should be different platforms because when you have a scenario where a loan becomes non-performing the interest of the debt investors and the equity investors are polar opposite in terms of what they want to do and achieve so they become very conflicting in that circumstance and if it's the same company that's representing both I just foresee major potential problems in that scenario so again I like both models, but I think they should be separate and again we just focus on the debt side. Peter: Sure, you talked about the property in LA County, but can you give us some ideas of typically $1 to 15 million...I mean, what interest rates are you charging? What are the typical lengths of these loans?

Evan: Yeah, so we have two primary products. The first one is our bridge loan product which are typically one to two-year terms; the majority are two-year terms but one to three-year term is the range. We’ll go up to 65% to 70% loan-to-value; the rates are typically in the 8% to 10% range, sometimes they're north of 10%, but typically in the 8% to 10% range and that's a product that's typically syndicated to high net worth investors, family offices and hedge funds as well as some institutional investors. Our second product is a permanent loan product which is typically five to ten-year term; we’ll go up to 75% or 80% loan-to-value and the rates are in the like 4.5% to 5.5% range and that's a product that we syndicate to banks and credit unions. So we have both a bridge product and a permanent loan product that are syndicated to the various investors based on their appetite.

Peter: Okay, okay. So let's just talk about those investors for a second. You know, you talked about the different types and obviously the 4% to 5% is going to attract a certain kind of investor that's different from an 8% to 10% offering. Do you...and I'm just of curious about how you’ve kind of marketed yourself out there to the different kinds of investors. Are these all people or all organizations from your G8 Capital days or are these people that you've really brought in specifically for Money360?

Evan: Yeah, very good question so we were certainly able to leverage many of our G8 relationships, both on the banks and then the institutional side as well as on the high net worth investor side. That gave us a good launching pad as we started the business, but today the large majority of our investors are well beyond that initial group that we were able to leverage as we launched the business. The permanent loans that are the 4.5% to 5.5%, those are going straight to the banks and credit unions. Those are loans that they would originate on their own, but they found that it's more efficient now to leverage a marketer and a platform like ours to originate that loan and then put on their books. In many cases, they don't want the whole loan, they want a fractional component so we'll syndicate those to three, four, five different banks or credit unions, but the primary product we're marketing to accredited investors, family offices, hedge funds is the bridge product which is the 8% to 10+ percent rate and we started off with a lot of my G8 original investors, but again it has gone far beyond that level at this point.

Peter: Okay, because on your website you make a play for individual investors, it sounds like. You can click on "Start Investing" and you can basically open up an account, you talk about $50,000 minimum...like how big of a piece of your business are these sort of individual accredited investors?

Evan: It's actually a big piece. I would say of all the loans...we've funded about $140 million, so far. That's about 30 loans and I would say about half of what we funded...approximately half, has been through high net worth, accredited investors/individual investors and then the other half would be hedge funds, institutional funds that are investing so we actually have a really good mix in my view across the spectrum. There's certainly significant opportunity, particularly as we grow and scale rapidly, to do a lot more with institutional investors that can scale and grow rapidly, but we get many new investors every day that come on the platform. We haven't done the level of marketing I think that some of the others have done, but they're finding us. Our investors are coming and they’re happy...the biggest factor driving our success is actually word of mouth. We have a lot of investors that with $50,000 or $100,000, and then they come back a couple of months later and they put in $250,000 or more so we've seen a lot of...in fact, I would almost say, more often than not, those that start with $50,000 or $100,000 end up coming back and doing more.

Peter: Right, yeah, that makes sense. So let's just talk a little bit about the deals themselves, I mean, it sounds like you have resources that help you source these deals so can you tell us a little bit about how you find the deals that you want to put on your platform?

Evan: You bet. We certainly capture some business that comes to us online including borrowers that will come to us directly seeking financing and that's a growing component of our business, but the majority of the loans we fund today are still coming through what I call somewhat traditional means. We have four full-time business development officers that are regionally located across the country, that are out actively in the market. These guys have 25 to 30 years experience each and so they’re out very active in the market originating loans that are coming to us, screening those loans and bringing them to us to underwrite here in our corporate office. So we have fulltime, dedicated business development officers that are finding quality deals out in the marketplace that they're bringing to us.

Peter: Okay then, what kind of regions are you focused on?

Evan: So we're national so we do a lot in the West as well as in the South and then we do...we don't do quite as much in the Northeast, we do some of the Northeast, we do a bit in the East and then we’ve done a bit of an amount in the Midwest. We're really a national platform and if I look at our 30 loans, I would imagine we're probably across more than a dozen states so we have a national footprint. There's some markets we like better than others and so we’ll underwrite them differently. There are some that we’ll avoid for particular reasons. Our background at G8 gave us the expertise and the relationships nationwide to be able to underwrite and analyze properties in locations that we're not located and that gives us a significant leg up that we can leverage our resources and our contacts with a lot of the national brokerage firms and appraisers and others to be able to quickly get a good quality underwriting of an asset.

Peter: Right, right. Can we just talk about that for a little bit as far as underwriting goes. Obviously, these are large loans, it's really important not to screw it up (laughs). No one wants any loan to go south, but if you've got one…if you've got a big chunk of a multi-million dollar deal then one goes south, that could really hurt your reputation particularly at this stage in your business so can you just tell us a little bit about your underwriting process and how you go about that?

Evan: Yeah, we have a very...we call it institutional quality level of underwriting comparable in many ways to the CMBS or bank level underwriting so we get all, very thorough, detailed third party reports, there’s a MAI appraisal, quality national firms will do the appraisals, we'll do inspections, we’ll get the necessary environmental reports so we go through...of course, we underwrite the borrower, we go through all their background and detailed information. With technology one of the ways you can leverage technology is to be able to capture a significant amount of data very quickly to allow our underwriters to review and make decisions very quickly. So we go through a very traditional underwriting and this is not...you know, there are other loan products where you can automate the loan underwriting…I think in consumer loans, you can be effective there, but with a commercial real estate loan, particularly for the $5 or $10 million size loan, that's not something you’re going to automate, but you can use technology to automate the collection of the data and the organization that allows our underwriters who have a significant amount of experience to be able to sit down and go through it and then make good quality decisions about what we're willing to do and what we're not willing to do. By the way, we turn down the large majority of what comes to us. We have significant volume coming in, but we're very picky about the loans that we choose to fund.

Peter: Right, right, that makes sense, that makes sense. So then how long does this process take from the time that a loan comes in your door or from your website, I mean, how long does it take before closing?

Evan: The quickest scenario is typically about three weeks. It's really driven by the third party reporting, the appraisal, inspections, environmentals and so the quickest scenario is three to four weeks that we can get a loan closed. We've had exceptions where we've had circumstances where someone has come and they have a situation where they need to close a loan within two weeks or they're going to have a significant loss on a property or lose a significant opportunity and so we can then pay a premium to our third parties to speed up that process so it's possible to do it. We've done a couple of loans in about two weeks, but typically, it's three to four weeks is the kind of a typical time frame from when they come to us until we're able to be in a position to close their loan which is...in this day and age, it's actually very quick. Banks and CMBS lenders would typically take as much as three months to underwrite and close a loan. That's one of the reasons we do a lot of the bridge product that we do is because borrowers are willing to pay a higher rate just so they can get the loan closed in a matter of three or four weeks as opposed to three or four months.

Peter: Right, right. You mentioned banks before and I'm just thinking about the interest rates you're charging. It sounds like your...particularly on your term loan product that you’re pretty much competitive on a rate basis with the banks...is that...

Evan: Yeah, our permanent loan product is competitive with the banks and the banks, due to the regulation...both the banks and the CMBS market, the securitization market, are going through major changes due to regulatory factors that are causing them to pullback significantly in their lending. The CMBS markets pulled back dramatically and the banks are also pulling back with these new regulations which are making a lot of loans that previously would go to those sources come to sources like us, you know as alternative or marketplace lenders. So there are really significant opportunities that are developing for all of us in this space because the primary market is pulling back dramatically, but the permanent product that we offer is competitive with the banks and the bridge loan product is a really unique product. These markets typically have their local, if you will, kind of hard money lenders and we're able to provide a much better solution, better terms, more professional solution than a lot of these regional players have previously provided to these local borrowers. Peter: Right, makes sense. So then I'm curious about…the real estate market has...we all know about what happened in 2008, actually even before then, but that's when it really caused problems. We all know it's cyclical, I guess I'm curious to know from your perspective...I mean you've been buying distressed loans, I mean, right now the economy is chugging along, they’re talking about potentially increasing interest rates shortly, where do you think we are in the cycle and what's your feeling, you know, focused on the commercial real estate and securitization market, what can you tell us about where we're at?

Evan: Well the last downturn was obviously more significant than anything we've seen in a very long time and so it's not unusual that we've had a significant run-up. We have had now six or seven years of increasing valuation of prices in both residential and commercial properties so I believe that we're getting toward the top end of this cycle. I don't know if it's going to peak next month or next year or two or three years, but I think we're getting near the top of a part of this cycle which is actually why I believe the product that we're offering in terms of offering a low loan-to-value debt product is the right product at this point in the cycle and even when the cycle is going down. The reason I'm cautious about equity is if you make an equity investment then you're in a first loss position so if you have $10 million property and the property drops by a $1 million in value, that’s $1 million of value wiped out for those equity investors. We would come into that $10 million property with a $6 or $7 million loan and so there’s significant room in terms of values coming off before it impacts any dollar of our principal so we're very cautious in how we underwrite…in fact one of the reasons we have chosen this kind of 60% to 70% loan-to-value as an average place for us is during the downturn…the last downturn 2008 to 2012, commercial real estate value dropped about 25%. So we kind of look at that as a gauge of what the possibility is. We don’t predict that type of a downturn this next time, but even if we were to experience that, we feel we'd be safe based on the type of loans that we're making.

Peter: Right, that makes sense. From your perspective, a downturn is not necessarily going to hurt your business. You might have some loans that go into arrears or even potentially foreclose, but you sound like you're confident that despite whatever the market does, your business is going to be fine and keep growing.

Evan: You're correct and that's why we've chosen this asset class. I think the fix & flip market, they will experience different things during an economic downturn than what you see with commercial real estate so we, very strategically, have chosen this asset class looking at it from the long term and the long view. Our objective and goal is to be the biggest player in the commercial real estate marketplace space. So that's our focus and our objective and we're taking the long view in how we achieve that. Even when you have loans...you think about non-performance, it's not a matter of if the loan doesn't perform, it's a matter of when. There are going to be loans that don't perform even in perfect economic conditions and even with perfect underwriting, you can't control borrowers or outside circumstances. So the key is when you have a loan that doesn't perform compared to a consumer loan, that's usually a full write-off, but with a real estate loan, we can go in, foreclose, you could take the property and will almost always make more money on a foreclosed loan than we will if they had performed. Certainly we're trying to make loans that we hope and expect will perform, but the nice part of the scenario where we do have non-performers is we'll typically make more money in that scenario. The most common scenario is we have significant leverage, most of them have personal guarantees, there's a lot of equity above our loan so typically, they end up coming back and curing their default with us, paying default interest, paying penalties and using another debt provider or equity to pay us off or become current. We're in a very good position even in a downturn scenario.

Peter: So I just want to go back to the investor side because I noticed here on your website you talk about a professionally managed fund, I'd like to actually hear a little bit about that because obviously not everyone wants to go and invest in properties one by one so what can you tell us about this fund.

Evan: Yeah, so we found and this is very heavily driven by our investors who really liked the product we were offering, but there are a number of them that didn't want to go in and underwrite loans. We provide all the diligence information, and then you can go in and look at the loan and decide to make it a $50,000 or $100,000 or $500,000 investment, but as we talked to them the direction and the input we got was the benefit of a fund would give diversification across numerous loans and across numerous geographies, property types, borrowers and so we saw significant advantages in creating a loan fund. We actually tested this in 2015 and had created a small fund that was successful, it was a closed-end fund. So earlier this year we launched an open-ended fund that is one of our primary focuses in terms of raising money to fund loans. So far this year we’ve raised about $35 million that’s deployed in that fund today, we have about another $30 million committed to come in over the next month or two and we anticipate growing that fund to a couple of hundred million in 2017.

Again, it's very attractive for investors because they have the ability to come in and invest in a fund that's making commercial real estate loans and you get that diversification across an entire portfolio of loans as opposed to one individual loan.

Peter: So is there a minimum on that fund, is it the $50,000 as well for that or is it different?

Evan: Correct, yeah, correct, it's also $50,000.

Peter: Okay, and what about fees? Are you taking management fees, performance fees or what are you doing?

Evan: Yeah, so probably don’t want to go into too much on the podcast…

Peter: Sure.

Evan: …but we can certainly go through with each individual investor that contacts us, but it's very, very minimal fees. We do charge a 1% loan servicing fee to service the loans and to manage them, but the fees are actually fairly minimal and very attractive to the investor.

Peter: Sure, and so those service fees obviously apply to the individual investor or the fund, I mean, you'd have that same fee structure for the investors, right?

Evan: Correct, and we tried to structure the fund in a way that it was comparable to what they would do if they were investing in loans directly so it’s not a disincentive to invest in the fund, we tried to make it very, very attractive to investors.

Peter: Okay, great, we're almost out of time, but before I let you go I would like to know what...you talked about you want to be the biggest in this space? I mean, you've done $140 million now, what do you have on tap for 2017?

Evan: Yeah, so we anticipate with our pipeline growing...we spent the last 12,15 months really laying a solid foundation, putting the right team in place so we could scale quickly. We have now, just in the last couple of months really launched, kind of a scale mode for us so we anticipate funding between $250 and $300 million in mid 2017. We'll grow this fund substantially and continue to grow and have success. We've been able to accomplish considerably more than a number of our peers with a lot less equity than others have had to bring in to be successful. We do anticipate doing a kind of small to medium equity raise in the first quarter of 2017 and then continue to scale and grow from there, but our objective is to grow within the next couple of years, get to where we're originating at least a billion a year in loan volume. Including myself and our president and others, numerous of us have already done that in prior ventures and companies and so we've done it before, it's not our first rodeo, we know we can do it again so just try to take the right steps to build the right quality long term firm.

Peter: Okay, well on that note, I wish you the best of luck and I really appreciate you coming on the show today. Evan.

Evan: Thank you, Peter, thank you very much for taking the time. It’s been my pleasure.

Peter: See you.

I have personally become more interested in real estate this year and I've done some investments. We've obviously featured some more real estate platforms on the blog and while this is obviously not investment advice, I cannot provide that in this format, each person has to consider their own options but for me, I like investing in different kinds of companies, different kinds of offerings, ways that I couldn't invest in by myself. For example, a $10 million building, there’s no way that I could...a $10 Million loan for a building, there's no way I could actually do that and make that part of my portfolio, but by going with a platform like Money360 that becomes possible. So I think having a diverse set of investments, not just within each asset class, whether it be unsecured consumer loans or small business, or real estate but different sub-asset classes, I think is really important.

Anyway on that note, I will sign off. I very much appreciate you listening and I’ll catch you next time. Bye.
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Crowdsourcing Firms Starting to Rack Up Noticeable Volume in CRE Financing

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Marketplace Lenders’ Growing CRE Presence Prompts Forewarnings

Marketplace lenders (also known as crowdsourcing or peer-to-peer lenders) comprise a small but growing sliver of the multi-trillion dollar U.S. commercial real estate (CRE) finance industry. But while the sector has a tiny share of the mainstream market, these nonbank lenders that rely on online marketing and underwriting platforms to raise investment funds are beginning to do enough business to attract increased scrutiny from bank regulators and rating agencies.

Marketplace lending platforms reported rapid growth in 2015, with an estimated $28.6 billion in loans originated, according to the Office of the Comptroller of the Currency. While most of that growth was for consumer lending, some of the funds raised went into CRE lending.

"Marketplace lending in the commercial real estate sector promises efficiency and speed of execution in terms of mortgage loan originations, as well as access to previously untapped sources of capital," said Moody's director of commercial real estate research, Tad Philipp. "It will, however, grow more slowly than in consumer finance sectors because CRE loans are typically larger, more document-intensive and backed by collateral that is not homogenous.”

Marketplace lenders received a boost from a 2013 federal law that allowed businesses to publicly solicit investments from accredited investors.

Currently, such lenders address the full spectrum of debt investments, though the bulk of CRE debt is still originated by portfolio lenders, Moody's Philipp noted in a report issued last week.

In time, though, Philipp believes marketplace lenders could drive banks and other portfolio lenders to shift more of their origination process online to possibly improve standardization, efficiency and speed of execution, especially for smaller loans. At the very least, Moody's expects marketplace lenders to prompt other lenders to raise their game in terms of sourcing and processing loan originations.

The sweet spot for marketplace lenders offering CRE funding is currently loans of less than $5 million, which to some extent overlaps with CMBS loan originations, as well as originations from portfolio lenders. The CEO of Money360, a Ladera Ranch, CA-based CRE marketplace lending platform, said the drop-off in CMBS financing earlier this year provided an opening for this new sector and enabled some marketplace lenders to rack up some impressive numbers.

Money360 recently surpassed the $100 million mark in closed loans with the completion of $15.25 million in loans closed late this summer.

"The continued growth of our lending platform is a testament to the marketplace's need for non-bank and alternative lenders to fill the void left by banks and the contracting and shifting CMBS market," according to Money360 founder and CEO Evan Gentry, adding that Money360 has seen more than a 100% increase in applications from borrowers turned down by bank and CMBS institutions as a result of increased regulations.

Money360's recent transactions include a pair of bridge loans for the acquisition of a multifamily property in Tucson and the renovation of a full-service boutique hotel in Aurora, OH; cash-out permanent financing for a single-tenant retail building in Dayton, OH; and a bridge loan for the refinance of a 206,257-square-foot shopping center in Jacksonville, IL.

Los Angeles-based Realty Mogul Co., another marketplace lender active in the CRE sector, claims to have originated, underwritten and financed over $200 million in real estate properties across approximately 200 debt and equity transactions since its founding in 2013.

This past summer, Realty Mogul launched a nontraded REIT, MogulREIT I, looking to raise $50 million for investment in CRE debt.

“We believe that the near- and intermediate-term market for investment in commercial real estate loans, commercial real estate-related debt securities, commercial real estate-related equity securities, and other real estate-related assets is compelling from a risk-return perspective. Given the prospect of low growth for the economy, we favor a strategy that targets senior and mezzanine debt to maximize current income, with significant subordinate capital and downside structural protections,” the REIT said in an SEC filing.

Despite such successes, the growth and evolution of CRE marketplace lending bears watching, Philipp of Moody's said, especially as CRE enters the late stages of the credit cycle when construction is more feasible.

CRE marketplace lenders have a short loan performance track record, with most of it during an economic recovery. An element of negative selection could also be in play, with marketplace lenders in some cases making loans that balance-sheet lenders would not, Phillip said.

The Comptroller of the Currency this summer also issued warnings to banks about jumping into the marketplace lending sector.

Some marketplace lenders have experienced challenges in managing costs, credit performance, and loan delivery as institutional investor interest has diminished, the OCC noted.

As more banks engage in strategic partnerships, purchase loans, securitize or work in other ways with marketplace lending firms, banks could face potential compliance, operational, and market risk issues, the OCC said.

By Mark Heschmeyer
October 12, 2016
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Q&A with Evan Gentry, CEO of Money360

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The top executive discussed the major changes happening in the CRE lending market and shared with CPE his long-term outlook.

Ladera Ranch, Calif.—Tightening regulations and stricter standards imposed by banks have boosted the alternative lending market, creating opportunities for investors seeking to provide bridge loans, for example. Money360, a California-based direct lender founded in 2010, recently exceeded its $100 million mark in closed commercial real estate loans.

Evan Gentry, founder & CEO of Money360, spoke with CPE about recent changes in the CRE lending market and how this is impacting his company’s long-term goals.

CPE: Could you tell us how the lending market (particularly for CRE) has changed since Money360’s founding in 2010?

Evan Gentry: I founded Money360 as I saw opportunities developing in the market to make CRE bridge loans. At the time, I was still very active running G8 Capital, where we were acquiring distressed CRE loans from banks and loan servicing companies. We were very busy with G8 Capital’s acquisition through 2014. It was really about two years ago that we started ramping up Money360. I have been in real estate lending my entire career, whether I was making new loans or buying distressed loans during the recession.

As we all know, this market experiences cycles. These cycles have a very big impact on the overall business. There have been a lot of opportunities to acquire CRE properties at attractive prices and to make attractive CRE loans starting around 2011 to 2012. Many properties have come through foreclosures or distressed sales during the recession, providing an opportunity for new owners to get into the properties at a lower cost basis. This has created tremendous upside opportunities for these property owners and those lending against these properties.

CPE: Are investors now more open to getting involved in the lending business?

Gentry: As the values have continued to climb, more CRE investors are choosing to strategically participate in the debt side of the transaction. We believe that participating in the debt side provides the most attractive risk/return in this current part of the real estate cycle. We are not predicting a crash like we saw in 2008 because the fundamentals of the market are much stronger now than they were in 2008. In particular, properties are not nearly as over-leveraged as they were in 2008, which drove much of the crash. However, we are clearly going on about seven years of property value increases, and that will not continue forever.

On the debt side of the equation, our risk is insulated by the equity investors and sponsors who bear first-dollar loss in the event of property devaluation. We are not the only group that sees the value in providing debt in this current market and have witnessed a significant increase in competition over the past year, which is also driving pricing/rates down—something that is positive for property owners/sponsors.

CPE: The shrinking CMBS market is fueling opportunities for alternative lending sources such as Money360. What types of lenders are stepping in to fill the gap?

Gentry: The shrinking CMBS market is definitely fueling new opportunities. This includes lenders stepping in to fill this gap through investments in hedge funds, private funds and marketplace lenders. Hedge funds and other institutional funds are moving very quickly into this space. Many are doing so directly, while others are providing the funds and backing lenders that are active in this space. There are also many private funds, both large and small, that are coming into this space. These private funds range from institutional to private funds backed by large family offices. Although not as large as the hedge funds and private funds, marketplace lenders such as Money360 are also growing very quickly and beginning to acquire market share.

CPE: Specifically, how does Money360 pursue deals? Could you give us a few examples of recently closed deals?

Gentry: Money360 pursues lending opportunities primarily through our regional business development officers (BDOs) that cover the primary regions in the country. These BDOs generally have 20 to 30 years of experience in the industry and draw upon their deep relationships within the broker community. The large majority of our loans come through CRE loan brokers.

Some recent Money360 transactions include an $8.3 million bridge loan to refinance a maturing CMBS loan on an anchored 206,357-square-foot shopping center in Jacksonville, Ill.; $3.2 million in bridge financing for the acquisition of a 70-unit apartment complex in Tucson, Ariz.; a $1.9 million cash-out permanent financing transaction for a single-tenant retail building in Dayton, Ohio, currently occupied by a Panera Bread restaurant; and a $1.9 million bridge loan to renovate a 67-room boutique hotel in Aurora, Ohio.

CPE: How do you think the lending market will change in the coming years?

Gentry: There is one thing you can count on if participating in real estate or real estate lending, and that is change. Although I don’t predict a crash, it would seem reasonable that we reach the peak of the current market expansion within the next year or two. However, based on the low leverage costs, significant capital coming in from overseas and investors generally accepting lower cap rates and return hurdles because they lack compelling alternatives, I wouldn’t be surprised if values bounce around at their current levels for several years before we see any meaningful downturn. My comments are on a general and national level, but of course individual markets are unique and will vary according to their local economic factors.

CPE: What are Money360’s long-term goals?

Gentry: At Money360, we believe that there will continue to be significant opportunity in the CRE lending space, especially driven by the reiteration of CMBS lenders and the pull-back by national and regional banks due to increasing regulations. We anticipate funding $250 million in the coming 12 months and getting to $1 billion or more in annual loan fundings within two to three years.

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Brief: Money360 Provides $2.45 Million Bridge Loan for Kansas City Multifamily Property

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Commercial real estate marketplace lending platform Money360 announced on Tuesday it has provided a $2,450,000 bridge for a 120-unit low-rise multifamily property in Kansas City, Missouri. This new loan was provided to a commercial property owner to pay off a maturing first mortgage with detailed real estate taxes and to fund recently completed property renovations.

Speaking about the loan, Money360 founder and CEO, Evan Gentry, commented:

“The Money360 team has extensive experience in developing creative solutions to meet borrowers’ needs and timelines. Due to the complexities involved with this transaction, it required a trailer-made solution.”

Over the past month, Money360 has provided a $6 million permanent loan for Texas property and a $8.5 million loan that was dedicated to refinancing South Carolina property.
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Money360 Completes $2.45 Million Bridge Loan for Multifamily Property

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LADERA RANCH, CA--(Marketwired - October 25, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided financing to a commercial property owner to pay off a maturing first mortgage with defaulted real estate taxes and to fund recently completed property renovations.

The $2,450,000 bridge loan is secured by 120-unit, low-rise multifamily property in Kansas City, Missouri.

"The Money360 team has extensive experience in developing creative solutions to meet borrowers' needs and timelines," said Money360 founder and CEO Evan Gentry. "Due to the complexities involved with this transaction, it required a tailor-made solution. Money360 was able to meet the borrower's needs in a timely manner and provided the certainty of execution needed in a time of transition."

The recourse loan is fixed for one year at an interest rate of 11.50%, on an interest-only basis.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Shrinking CMBS Market Casts Uncertain Jobs Forecast

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At its peak in 2007, the CMBS market was booming, with 23 issuers delivering some $250 billion in funds. In 2015, there were 46 companies issuing just $130 billion.

Projections for the coming year are even more dire, due in part to market volatility and the looming rollout of risk-retention rules that require CMBS issuers to hold on to 5 percent of every new deal or designate a B-piece buyer to assume that risk.

It’s been a rough couple of years for the CMBS market, and the ride is not over yet.

Market volatility, contraction and heightened regulation have made it difficult for originators to profit from their CMBS loans. This is forcing many to adopt creative methods to stay afloat. Others are scaling back, hoping to weather the storm.

Brace yourselves: The CMBS market is facing turbulent waters, and some issuers are likely to jump ship.

Risk Retention Changes Rules of the Game

The risk retention rules taking effect toward the end of this year under the Dodd-Frank Act are likely to squeeze out shops that don’t have the capital to meet the 5 percent obligation for the five years required under the law.

Major CMBS issuers presumably have the edge in adjusting to these new regulations, which would require lenders to hold as much as $50 million in capital in a $1 billion transaction. But even those with the available funds to do so are being pressed by the need to keep their balance sheets in check.

As a result, some traditional lending institutions may consolidate in an attempt to stay afloat. Others may attempt to meet these rules by selling the risk of first loss to a designated third party, known as a B-piece buyer, in exchange for higher yields.

But yields have become problematic as profits in the industry have dipped. The 10 percent gains experienced in the 1990s have given way to meager yields of 2 percent today. This changes the game significantly as the industry struggles to redefine itself and satisfy investors in a complicated mix of shifting variables.

Undoubtedly, there will be CMBS issuers who decide to take a “wait and see” approach to these changes, holding off on issuing any more CMBS loans until the waters have calmed.

Some will find themselves pushed out of the market all together, unable to meet the escalating costs of doing business.

What Does this Mean for Jobs?

These market impacts are already affecting the job market, with many in the industry asking themselves, “Do I really want to be in this business?”

Credit Suisse announced this year that the company would be cutting $1.7 billion in costs and eliminating 6,000 jobs this year as part of an overhaul that runs through 2018. This announcement came on the heels of layoffs at other major banking institutions.

Unfortunately, we’re going to see a lot of qualified and very experienced real estate professionals out of a job, possibly even before the end of this year.

But the story isn’t all doom and gloom.

Market shifts tend to give rise to new innovation. In the case of CMBS, the contraction of traditional banking institutions has sparked substantial growth in the arenas of alternative and marketplace lending.

There will always be a need among commercial real estate owners to borrow money to keep their projects and new ventures moving.

Alternative lending is filling that void. It will undoubtedly help provide many of those laid off by the traditional lenders with new employment, too.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Real estate briefly:

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Ken Gaitan has been hired at Money360 in Ladera Ranch as regional director of the company’s Western region. Gaitan brings nearly 30 years of commercial real estate experience to his role and has closed more than $3.5 billion in commercial real estate transactions during his career. Gaitan has served in senior production and management roles for firms such as Bank of America, Merrill Lynch, CBRE and Newmark Grubb Knight Frank.
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Money360 Provides $8.5M Bridge Loan Dedicated to Refinancing South Carolina Property

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On Monday, real estate marketplace lending platform Money360 announced it provided a $8.5 million bridge loan for the refinancing of a K-12 charter school located in Spartanburg, South Carolina. According to the platform, the new loan will allow the borrower to pay off a maturing seller-financing loan, which had a higher interest rate, and provide $4.8 million cash out for impending near-term buildout of additional classrooms and facility space for the school.

Money360 founder and CEO Evan Gentry, stated:

“This transaction reflects a scenario typical for many commercial property owners who are facing loan maturation and have been squeezed out of the traditional CMBS market. We were drawn to this transaction because the borrowers had already invested a substantial amount of their own capital into the property and had an excellent track record in developing this property type.”

Money360 added that the new loan term is fixed for two years, includes an interest-only payment, and has a limited prepayment penalty. The news of the bridge loan comes just a few months after the marketplace lender officially surpassed the $100 million in closed commercial real estate loans with the completion of $15.25 million in recently closed loans.

Money360’s recent transactions does include a bridge loan for the acquisition of a multifamily property in Tucson, Arizona; a bridge loan for the renovation of a full-service boutique hotel in Aurora, Ohio; cash-out permanent financing for a single-tenant retail building in Dayton, Ohio; and a bridge loan for the refinance of an anchored shopping center containing 206,257 square feet of rentable area in Jacksonville, Illinois.
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Money360 Provides $800,000 Bridge Loan For Illinois Retail Property Acquisition

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Real estate marketplace lending platform Money360 announced on Monday it has provided an $800,000 bridge for the acquisition of a newly-constructed, single-tenant retail building, located in Raymond, Illinois. According to Money360, the borrower has secured a loan through its platform and was able to close before its 1031-exchange deadline. Money360 founder and CEO, Evan Gentry, stated:

“Borrowers looking for assistance in completing 1031-exchanges need certainty of execution. Our team has extensive experience in working with borrowers to complete their transactions effectively and efficiently. We were drawn to this transaction not only because of property’s condition and the favorable loan-to-value ratio, but also because we knew our team could meet the borrower’s timeline needs. The retail location was recently constructed and already occupied by a national tenant, creating strong fundamentals for the transaction.”

The lending portal added that the loan is fixed for two years at an interest rate of 10.00%, on an interest-only basis. This news comes just days after Money360 announced it provided a $6 million permanent loan for the refinancing of a single-tenant industrial building that is located in Bryan, Texas. As previously reported, this loan will allow the borrower to pay off a higher interest rate loan, and provide approximately $500,000 of cash out that was used to fund capital leasehold improvements that were made as a part of a new lease for a national tenant which recently took occupancy.

Money360 president Gary Bechtel, added at the time:

“We have continued to see a trend of borrowers in need of financing that will refinance maturing loans or those with higher interest rates, as well as provide capital to fund property improvements or additional capital reserves,” said l. “This transaction fit well within our criteria because the borrower had already invested a substantial amount of their own capital into the property and has a long history of effective ownership, management and property maintenance.”
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Money360 Funds Bridge Loan for Acquisition of Illinois Retail Property

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LADERA RANCH, CA--(Marketwired - October 17, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided an $800,000 bridge loan for the acquisition of a newly-constructed, single-tenant retail building, located in Raymond, Illinois.

Faced with an impending 1031-exchange deadline, the borrower secured a loan through Money360 and was able to close on time and avoid tax penalties.

"Borrowers looking for assistance in completing 1031-exchanges need certainty of execution. Our team has extensive experience in working with borrowers to complete their transactions effectively and efficiently," said Money360 founder and CEO Evan Gentry. "We were drawn to this transaction not only because of property's condition and the favorable loan-to-value ratio, but also because we knew our team could meet the borrower's timeline needs. The retail location was recently constructed and already occupied by a national tenant, creating strong fundamentals for the transaction."

The recourse loan is fixed for two years at an interest rate of 10.00%, on an interest-only basis.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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Brief: Money360 Provides $6M Permanent Loan to Texan Property

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Real estate marketplace lending platform Money360 announced earlier this week it has provided a $6 million permanent loan for the refinancing of a single-tenant industrial building that is located in Bryan, Texas.

Gary BechtelAccording to the lending portal, the new permanent loan will allow the borrower to pay off a higher interest rate loan, and provide approximately $500,000 of cash out that was used to fund capital leasehold improvements that were made as a part of a new lease for a national tenant which recently took occupancy. Sharing more details about the loan, Money360 president Gary Bechte, stated:

“We have continued to see a trend of borrowers in need of financing that will refinance maturing loans or those with higher interest rates, as well as provide capital to fund property improvements or additional capital reserves,” said l. “This transaction fit well within our criteria because the borrower had already invested a substantial amount of their own capital into the property and has a long history of effective ownership, management and property maintenance.” Money360 went on to add the recourse loan is fixed for five years at an interest rate of 4.375%, utilizing a twenty-five-year amortization schedule, and no prepayment penalty.
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Money360 Closes $6 Million Permanent Loan for Texas Property

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LADERA RANCH, CA--(Marketwired - October 10, 2016) - Money360, the leading commercial real estate marketplace lending platform, announced today that it has provided financing for the refinancing of a single-tenant industrial building, located in Bryan, Texas.

The $6 million permanent loan allowed the borrower to pay off a higher interest rate loan, and provides approximately $500,000 of cash out that was used to fund capital leasehold improvements that were made as a part of a new lease for a national tenant which recently took occupancy.

"We have continued to see a trend of borrowers in need of financing that will refinance maturing loans or those with higher interest rates, as well as provide capital to fund property improvements or additional capital reserves," said Money360 president Gary Bechtel. "This transaction fit well within our criteria because the borrower had already invested a substantial amount of their own capital into the property and has a long history of effective ownership, management and property maintenance."

The recourse loan is fixed for five years at an interest rate of 4.375%, utilizing a twenty-five-year amortization schedule, and no prepayment penalty.

About Money360
Money360, Inc. is a direct lender that offers borrowers speed, convenience and reasonable terms on small- to mid-balance commercial real estate loans. Money360 operates a marketplace lending platform that caters to institutional and accredited retail investors, providing direct access to attractive fixed income investments secured with a first-priority lien against income-producing commercial real estate. Money360 also operates an investment management company, M360 Advisors, LLC, which manages diversified fund vehicles on behalf of institutional and accredited retail investors. Borrowers and lenders (investors) can register at www.money360.com.
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U.S. Commercial Real Estate: A Favorite among Foreign Investors

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Considerable press has been given lately to high-profile real estate acquisitions made by foreign investors, particularly those from China. China Life Insurance Group Co. recently purchased a $1.65 billion Manhattan office tower on Sixth Avenue; Anbang Insurance Group Co. bought Manhattan’s Waldorf-Astoria Hotel for $2 billion; and Chinese real estate giant Greenland Group is midway through the acquisition of a massive, $1 billion mixed-use project in downtown Los Angeles called “Metropolis.”

These high-ticket projects make headlines. But the real story lies in the steady growth of overseas investment in small- to mid-balance commercial real estate transactions, particularly as they have become available through marketplace lending.

What’s the draw for foreign investors?

Global instability, Brexit and the threat of a debt-fueled bubble bursting in the Chinese economy has made U.S. commercial real estate one of the most desired investments on the planet. The Wall Street Journal recently reported a 19 percent year-over-year increase in investment by China in U.S. commercial real estate for the first half of 2016.

Generally speaking, real estate, especially income-producing commercial real estate, is seen by foreign investors as a solid investment. Why? Because not only does it retain significant value at all points in the cycle, it also provides a tangible, saleable and income-producing form of collateral in the form of lease and lodging payments.

Overseas interest in office, multifamily and hospitality properties from coast to coast has been rising steadily all over the U.S., but more so in traditional metropolitan centers such as Los Angeles, New York, San Francisco and Chicago.

China’s high-net-worth individuals are buying up luxury apartments, hotels and retail developments, but they’re also investing in funds and REITs to spread their investments among multiple properties that will diversify their interests across the market and, in some instances, provide for greater liquidity. Many upper middle class professionals in China are doing the same: pooling their money with other investors to buy smaller-scale commercial properties such as budget hotels, shopping centers and apartment communities.

New opportunities

Marketplace lending, also known as a peer-to-peer platform, gives foreign investors the opportunity to get involved in the financial side of commercial real estate without the headache of having to manage commercial real estate as an owner or part owner in the property.

Marketplace lending is nothing new to the Chinese. In fact, the China peer-to-peer lending market is the largest in the world, topping more than $150 billion in 2015. The Wall Street Journal reported last year that there were 1,575 peer-to-peer platforms in China, up from 50 three years ago.

But few, if any, of those platforms offer the benefits of U.S.-based marketplace lending, where foreign investors can participate in loans for individual properties stateside, such as hotels, retail centers or multifamily communities. Investment funds offer the same opportunities, but for multiple properties instead of just one, frequently creating preference among investors for providing diversity, reduced risk and, in many cases, stronger yields.

As foreign investors continue to look for new commercial real estate investment platforms, marketplace lending will continue to create new opportunities for this group.

Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer of CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
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Podcast 69: Jon Barlow (Money360 Board Member), Founder of Eaglewood Capital

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PODCAST TRANSCRIPTION SESSION NO. 69: JON BARLOW (Money360 Board Member)

Welcome to the Lend Academy Podcast, Episode No. 69. This is your host, Peter Renton, Founder of Lend Academy.

Peter Renton: Today on the show, we have someone who I would consider one of the true legends of this space. He has been around for many, many years and I’m referring to Jon Barlow, the former CEO of Eaglewood Capital Management, he was also the Founder of that company and he built that up from zero to just under $2 billion in AUM when he left and that’s the largest asset manager dedicated to this space. Since then he has been doing a lot of interesting things. I see his name around a lot, he’s been investing in different companies, he has joined the board of several companies, but I wanted to get him on the show really to talk about the early days of Eaglewood, talk about sort of the institutional type approach that he really brought to the industry. I think the industry has been a lot better off because of Jon Barlow. We also talk about the Lending Club saga, we talk about what platforms can do now to attract the institutional capital that everyone so desperately wants. We cover that and much more on the show, hope you enjoy it!

Welcome to the podcast, Jon.

Jon Barlow: Thanks, Peter, appreciate the opportunity to be on with you today.