|Posted on January 1, 2018 at 5:15 PM||comments (0)|
f you need to borrow money to make home improvements or consolidate credit card debt, where do you turn? In 2018, the answer may be peer-to-peer lending platforms. These are websites that match borrowers with investors. The ease and speed of the loan application and approval process is helpful. And P2P platforms tend to be more forgiving than banks when it comes to credit histories. While the latter often deny loan applications from consumers who haven’t borrowed in the past,
P2P lenders often use more than just credit histories to determine a borrower’s eligibility and creditworthiness. P2P loans may offer rates that are lower than those charged by credit cards companies. Interest rates vary depending on the creditworthiness of the borrower as assessed by the P2P platforms. And while P2P platforms use some unconventional methods for assessing creditworthiness, borrowers with high scores often get lower interest rate offers on the platforms.
APRs for P2P consumer loans from some of the largest platforms range widely from 7.99 percent to 36 percent, according to a report by the U.S. Treasury. Borrowing minimums and maximums for consumers can vary from platform to platform and range from as little as $1500 to as much as $50,000. Unlike bank loans, loans from P2P platforms can be done entirely online. Filling out an application often takes 20 minutes and applicants are informed of funding decisions within 48 to 72 hours.
Funding for a single loan typically comes from a variety of sources, as P2P investors want to diversify their loan holdings and invest in multiple loans. Though the name “peer-to-peer” may imply disintermediation, large institutional investors often participate in P2P platforms. P2P platforms charge fees to both borrowers and lenders. These include origination fees, late payments fees, and fees for unsuccessful electronic payments. Lenders are charged fees as well, such as servicing fees and collection fees if necessary. Loans to consumers are generally unsecured loans. You do not need to put up collateral and you do not have to worry about someone seizing your property for nonpayment.
There are other consequences. The P2P platform could ban you from taking out new loans or turn your account over to a collections agency. In any event, your credit score will suffer and make it harder for you to take out a loan or to secure credit in the future.
For more information, contact Douglas Slain at dslain@PrivatePlacementAdvisors.com.
|Posted on September 5, 2017 at 10:15 PM||comments (0)|
Alabama The bill was signed into law and became effective immediately on April 9, 2014. Further information can be found at asc.alabama.gov/Registration%20Filing%20Req/Crowdfunding_guidelines.aspx.
Alaska The bill was signed into law on July 18, 2016 and became effective on October 16, 2016. Further information can be found at commerce.alaska.gov/web/dbs/.
Arkansas HB 1890 was introduced on March 2, 2017 and referred to Insurance & Commerce. SB 640 was introduced on March 6, 2017 and referred to Insurance and Commerce.
Arizona The bill was signed into law on April 1, 2015 and became effective on July 15, 2015. Further information can be found at azcc.gov/divisions/securities/regulatory_alerts.asp.
California AB 1517 was introduced on February 17, 2017, and referred to Banking & Finance and Judiciary.
Colorado The bill was signed into law on April 13, 2015 and became effective on August 5, 2015. Further information can be found at colorado.gov/pacific/dora/equity-crowdfunding.
Delaware The bill was signed into law on July 11, 2016, and became effective November 8, 2016. Further information can be found delcode.delaware.gov/title6/c073/sc02/index.shtml.
District of Columbia The rule was adopted on September 29, 2014 and took effect on October 24, 2014. Further information can be found at disb.dc.gov/page/equity-crowdfunding-dc-only-securities-offeringexemption.
Florida The bill was signed into law on June 16, 2015 and became effective October 1, 2015. Further information can be found at flofr.com/StaticPages/CrowdfundingIssuers.htm.
Georgia The rule was adopted and became effective on December 8, 2011. Further information can be found at garules.elaws.us/rule/590-4-2-.08. Idaho The rule was adopted and became effective on January 20, 2012. Further information can be found at finance.
Idaho.gov/Securities/AAGeneralOtherOrders.aspx. Illinois The bill was signed into law on July 29, 2015 and became effective on January 1, 2016. Further information can be found at cyberdriveillinois.com/publications/securitiespub.html#crowd. March 21, 2 HB 3791 was introduced on February 10, 2017 and assigned to Business Growth & Incentives.
Indiana The bill was signed into law on March 25, 2014 and became effective on July 1, 2014. Further information can be found at in.gov/sos/securities/4114.htm.
Iowa The bill was signed into law on July 2, 2015 and became effective on January 1, 2016. Further information can be found at legis.iowa.gov/docs/publications/LGE/86/HF632.pdf.
Kansas The rule was adopted and became effect on August 12, 2011. Further information can be found at ksc.ks.gov/index.aspx?NID=121. Kentucky The bill was signed into law on March 19, 2015 and became effective on November 6, 2015. Further information can be found at kfi.ky.gov/industry/Pages/crowdfunding.aspx.
Maine The bill was signed into law on March 2, 2014 and became effective on January 1, 2015. Further information can be found at maine.gov/pfr/securities/index.shtml.
Maryland An exemption by order (MDCF) was adopted and became effective on May 16, 2016. Further information can be found at marylandattorneygeneral.gov/Securities%20Documents/Maryland_Crowdfunding_Order_5_16_16 _final.pdf. A separate exemption by order (MISBE) was adopted and became effective on October 1, 2014, and can be found at marylandattorneygeneral.gov/Securities%20Documents/MISBEOrder.pdf.
Massachusetts The rule was adopted and became effective on January 15, 2015. Further information can be found at sec.state.ma.us/sct/crowdfundingreg/crowdfundingidx.htm.
Michigan The bill was signed into law and became effective on December 30, 2013. Further information can be found michigan.gov/lara/0,4601,7-154-61343_32915-319233--,00.html.
Minnesota The bill was signed into law on June 15, 2015 and became effective on June 20, 2016. Further information can be found at mn.gov/commerce/industries/securities/mnvest/. HB 444 was introduced on January 23, 2017, passed the House on March 2, 2017, and passed the Senate on March 20, 2017.
Mississippi The rule was adopted on February 9, 2015 and became effective May 26, 2015. Further information can be found at sos.ms.gov/Securities/Pages/Crowdfunding.aspx.
Montana The bill was signed into law on April 1, 2015 and became effective on July 1, 2015. Further information can be found csimt.gov/securities/capital-formation/equity-crowdfunding/.
Nebraska The bill was signed into law on May 27, 2015 and became effective on September 1, 2015. Further information can be found at ndbf.nebraska.gov/industries/securities/intrastate-crowdfunding. LB 148 was introduced on January 9, 2017 and referred to Banking, Commerce and Insurance.
New Jersey The bill was signed into law on November 9, 2015 and became effective on August 12, 2016. Further information can be found at njconsumeraffairs.gov/bos/Pages/CrowdfundingFAQ.aspx. A 291 was introduced on January 27, 2017 and referred to Assembly State and Local Government.
North Carolina The bill was signed into law on July 22, 2016 and is pending final rulemaking. Further information can be found at sosnc.gov/legal/ThePage.aspx.
Ohio HB 10 was introduced on February 1, 2017 and referred to Financial Institutions, Housing and Urban Development.
Oregon The rule was adopted on October 15, 2015 and became effective on January 15, 2015. Further information can be found at dfr.oregon.gov/business/resources/Pages/raising-capital.aspx.
South Carolina The rule was adopted and became effective on June 26, 2015. Further information can be found at scag.gov/scsecurities/registration.
Tennessee The bill was signed into law on May 19, 2014, and rules became effective December 16, 2015. Further information can be found at tn.gov/commerce/news/18782.
Texas The rule was adopted on October 22, 2014 and became effective on November 17, 2014. Further information can be found at ssb.texas.gov/texas-securities-act-board-rules/texas-intrastatecrowdfunding. (NASAA) 4
Vermont The rules were adopted and became effective on June 16, 2014. Further information can be found at dfr.vermont.gov/securities/corporate-finance/corporate-finance-exemptions.
Virginia The bills were signed into law on March 19 and March 23, 2015 and became effective on July 31, 2015. Further information can be found at scc.virginia.gov/srf/bus/crowd.aspx.
Washington The bill was signed into law on March 28, 2014 and became effective on November 1, 2014. Further information can be found at dfi.wa.gov/small-business/crowdfunding. HB 1593 was introduced on January 24, 2017 and passed the House on February 20, 2017. SB 5680 was introduced on February 2, 2017 and approved by the Committee on Financial Institutions and Insurance on February 14, 2017.
West Virginia The bill was signed into law on March 15, 2016, and became effective June 6, 2016. Further information can be found at wvsao.gov/Securities/Default#NaN.
Wisconsin The bill was signed into law on November 7, 2013, and became effective on June 1, 2014. Further information can be found at wdfi.org/fi/securities/crowdfunding/.
Wyoming The bill was signed into law on March 3, 2016, and will become effective July 1, 2017. Further information can be found at soswy.state.wy.us/Investing/Docs/Wyoming_Securities_Act_Effective_07-01-2017.pdf.
Types of Businesses Using Intrastate Crowdfunding Grocery store, general store, exercise studios, software company, night club, music/real estate venue, farmers (family-run farm, dairy farm, farming coop), retail electronics store, technology companies (medical device, education technology, renewable energy), family-run manufacturing businesses, real estate firms (micro-financing, commercial property, construction), product inventions, hair salon, barbershop, entertainment platforms (movie, album, other media, over-the air digital TV station), electronic/gaming pub, dog groomer, sushi restaurant, ice cream maker, baseball bat maker, angel funds, defense consultant, food and beverage platforms, restaurants, apparel companies, service providers (home renovation, security alarm systems, food processing), senior care facilities, physician association, media art firms, purse maker, local product distribution company.
|Posted on July 2, 2017 at 6:40 PM||comments (0)|
What is the big deal about Rule 506(c? One of the most sweeping and deep changes in securities law in over 80 years occurred with the introductionof Rule 506(c. As long as you sell (not offer) to accredited investors, you may use the Internet and other public forums to market your offering anyway you want. A REIT recently raised over $40 million using Craigslist.com. With Rule 506(c, it is the wild-west. None of this means, however, that both state and Federal law prohibiting misleading statement or material omissions has changed. Securities offerings are more rigorously reviewed than most documents for securities violations. Innocent mistakes can be costly. Practice Note: One reason we recommend that our clients avoid unaccredited investors is because doing so requires you to include additional disclosures not necessary when all investors are accredited.
|Posted on June 3, 2017 at 11:05 PM||comments (0)|
List of FINRA Approved Reg CF Crowdfunding Portals
1. Wefunder 2. StartEngine 3. NextSeed 4. Indiegogo / MicroVentures (First Democracy VC) 5. SeedInvest 6. FlashFunders 7. Open Deal (Republic) 8. Crowdboarders 9. CrowdSourceFunded 10. DreamFunded Marketplace 11. Funding Wonder Crowd 12. GridShare 13. GrowthFountain Capital 14. IndieCrowdFunder 15. JumpStart Micro 16. Kasdaq (Mr. Crowd) 17. MinnowCFunding 18. NetCapital Funding Portal 19. Not So Small Change (Small Change) 20. Razitall 21. TruCrowd
|Posted on June 3, 2017 at 10:00 PM||comments (5)|
Exempt offerings or private placements are used to launch almost all alternative investments.
An alternative investment is any type of investment that falls outside conventional investment platforms such as stocks and bonds. These include real estate, commodities, and other asset-based investments. Alternative investments include many different asset classes with different risks and expectations of return.
Some alternative asset classes are more volatile and carry more risk; others are relatively safe. Asset-based lending is backed by collateral that can be redeemed in the event of a loan default. The success of these types of investments depends in part on due-diligence done on each opportunity. Alternative investments come with different types of risk, including liquidity. Alternative investments used to be restricted to hedge funds and other high earning investors. The 2012 JOBS act enabled almost anyone to offer these types of investments to accredited investors.
Access to these opportunities is now being democratized, with new access to non-accredited investors, and lower minimums and shorter investment durations. These opportunities typically have 1 to 3 year terms. Investment opportunities outside of the stock market have existed for decades. Alternative investment opportunities outside of hedge funds, such as private equity, managed futures, real estate, and asset-based lending are already established asset classes.
Many alternative investments are designed to protect from market volatility and alternative asset classes have shown different volatility patterns from the stock market, zagging when the stock market zigged. Because it is backed by tangible collateral, asset-based lending does not have a high correlation to the stock market, protecting an investor’s portfolio from market volatility.
|Posted on May 19, 2017 at 2:35 PM||comments (0)|
Questions we hear
Can I do multiple offerings on the same raise at the same time?
How do Blue Sky laws work?
What does “testing the waters” mean for a Reg A+ offering and why are some Reg A+ issuers declining to test the waters?
Do I have to be a broker dealer?
Do I have to use a broker dealer?
Do I need FINRA’s approval for a Regulation D offering?
Is there a limit on how many investors I can have?
What documentation is required for my type of offering?
What is a Reg CF offering?
For answers, see
Web site: http://privateplacementadvisors.com
|Posted on May 13, 2017 at 12:50 AM||comments (0)|
Unregistered Real Estate Exempt Offerings
Using our template for a general partnership with a specific purpose you do not need to pay and wait for Regulation D exemptions. Private Placement Advisors LLC employs a general partnership vehicle to avoid almost all review by regulators. With no limited partnership or other passive interest created, no security is formed. This particular template is designed for real estate lenders and borrowers. To learn more about the advantages of unregistered, non-exempt private placements, contact email@example.com.
|Posted on May 4, 2017 at 5:05 PM||comments (0)|
Rule 506(c offerings must be sold only to accredited investors, whereas crowdfunding campaigns can accept money from non-accredited investors.
Remember, however, that 506(c offerings can still be marketed and advertised to anyone.
Another difference is that under Rule 506(c, funding sources must be verified as accredited investors using a third party service (such as Private Placement Advisors LLC).
Rule 506(c offerings have no limit on the capital raise, whereas crowdfunding raises are usually restricted to a $1 million.
The rules overseeing crowdfunding solicitation are much more restrictive than with 506(c offerings. General advertising is limited and specified disclosure has to occur at one or more online funding portals.
Is $1M enough for you, or do you need more? If you need more up front, you should go with the 506(c exemption. If your financial needs are $1M or less, consider a crowdfunding program appropriate for your company.
Do you assume you will not need non-accredited investors? Then go with 506(c.
If you believe your campaign is particularly attractive to a wider variety of investors, equity crowdfunding is for you.
|Posted on April 28, 2017 at 1:15 AM||comments (0)|
2016 saw a total of 23,292 Reg D offerings
The average offering size was $87.8 Million (offered not sold)
There were 307,764 total investors
The average number of investors per offering was 13.2
The banking industry had the largest total offerings in amount ($1.9 Trillion), number of offerings (7,083), and number of investors (115,536)
The travel industry had the smallest total offerings in amount ($484.2 Million), number of offerings (97), and investors (1,083)
|Posted on April 26, 2017 at 4:25 PM||comments (0)|
The president of the North American Securities Administrators Association (NASAA) said today that Trump’s proposed Financial CHOICE Act would dramatically change regulatory policies in the wrong direction, weaken the Dodd-Frank Act, and expose investors to significant new risks.
“It is clearly evident that the changes contemplated by the bill would significantly undermine and compromise the ability of regulators to effectively enforce financial laws and regulations,” said Mike Rothman, NASAA’s President.
“By attempting to eviscerate so many critically important reforms with weakened oversight of private securities markets and reforms, watered down provisions intended to expand fiduciary obligations to investment professionals, lowered standards for securities sold to the investing public, the legislation blithely aims to sweep away in one stroke scores of essential protections and modernizations to our financial regulatory architecture that were literally decades in the making,” Rothman said.