I first wrote about BorrowersFirst eight months ago when I spent a day in their New York offices. They expected to launch in the fourth quarter of last year but things were put on hold as they got their financing together.
The good news is that the financing is now in place. At LendIt 2014 this morning BorrowersFirst announced they have received significant equity and debt funding from SF Capital Group in a deal that closed last month.
What is Different About BorrowersFirst?
As a result of this deal Neil Wolfson is now Chairman of the Board for BorrowersFirst and Jonathan Ende is no longer with the company. I chatted with Neil Wolfson just after the deal closed and I was impressed with many of his ideas.
“One of the problems with online lending platforms today”, Wolfson said, “is that they don’t eat their own cooking. By this I mean they don’t invest their own money in the loans they issue.”
At BorrowersFirst they will do just that. They are going to be a hybrid marketplace/balance sheet lender. The way they plan to implement this is vey interesting and unique in the online space.
A Marketplace for Whole Loans Only
BorrowersFirst is not for the small investor. They are focused on high net worth investors and institutions. This is because they are launching with only whole loans, no fractional loans will be made available. So, an investor would need to invest at least a million dollars to build a diversified portfolio.