I propose the following table for interest rates. Prime will be market prime rate and could change daily. Any change to the plus or the points for credit or length of term can be changed by an additional vote. The most likely rate to change by vote is the plus. The rest of the criteria should remain the same. For example, today’s prime rate is 3.5%. That prime rate would always be tied to the prime rate. It would never be voted us unless we wanted to change it to another peg.
Discounts are given to $BSL holders who stake their tokens for the term of the loan, or until the loan is paid back, whichever happens first. Each $5,000 worth of $BSL staked at the time of closing gets a .1% reduction in rate with a max of .5% with $25,000 $BSL Staked. When the loan completes the borrower tokens are released.
Discounts in rate given for experience. For each 2 units closed .1% discount on rate with a max of 10 units for .5% max discount
The max total combined discount is 1%.
Considering the rising rates across the market, especially in the U.S market, I would say these rates are competitive and acceptable.
Rates look great to me! Very excited to see them in action! I can also see why hard money loans make a lot of sense for the SLP. Nice bang for our buck on loans.
What type of loans are these interest rates for?
Asset backed is low risk, so shouldn’t rate be lower?
This is hard money rates. These are not regular mortgage rates. These are for builders and house flippers.
I also agree these rates are in line, most likely lower than current offerings. Even standard conventional mortgage rates have risen close to 1% in the last 2 months alone. We can always keep an eye on FED rates as a comparison and shop the open market to make sure we are competitive!
These rates are competitive. Hard money loans, 7 month balloon (after closing, the borrower has up to 7 months to pay the loan back, at 7 months. The remaining balance is due)
New construction, 11 month balloon
Also, is it worthwhile to incentivize flippers/builders with better rates in a tiered system (Show proof of 10+ Alta statements per year, your rate drops .5%, or the origination fees are reduced. This would incentivize those higher producers to scale their business with us and use their saved capital to buy more deals.
Exactly… and technically credit score isn’t a typical requirement banks give a lot of weight to. It’s more about experience, the terms of the deal (cost vs profit and how real the numbers are), and how fast the deal will complete.
I like it, seems straightforward. These quick loans will do nothing but benefit all parties. Thank you for the chart, very informative.
I support these interest rates, very competitive and should help bring in a healthy amount of volume of loans.
I agree with others. It looks like these are competitive rates for the market. Typical rates for hard money loans for contractors start at more than 7% I thought so looks good to me!
These rates look like a great starting point. A question comes to mind that is not related to rates but I’ll ask here anyway. I believe most loans will be backed with crypto. If there is a default and the crypto becomes Banksocial property, is it liquidated back into the SLP?
Looks good to me, are we to review the ‘Plus’ rate via the DAO adhoc moving forward?
Yes- I think the plus rate makes sense to adjust with the market movements and overall risk profile of the loans.
I would say yes - this is correct - any liquidations or defaults would mean those funds are back into the liquidity pool for lending again.
The tiers proposed look reasonable. I would say the main thing is that we have some of the best rates out there especially in the beginning to drive customers to us.
Are we giving any discount on rates if they are a BSL holder as well? Like if they hold 10000 USD BSL they get a .25% discount break or something or reduced closing costs? With criteria they have to hold for lifetime of loan. Or maybe a % of BSL of loan. Like if they take 100k loan they have to have 5% in BSL to get discount.
These are really good rate tiers to start the process and get some loans funded. Would actually look to increase them by 0.5-0.75% as the volumes pickup and we feel comfortable in doing so. Since our placement fees are going to be lower the client WINS!
I think the rates are competitive and with good distribution channels and network we will gain a lot of customers. The discounts for $BSL holders seem fair to me getting a maximum discount of 0.5% on a rate that was already low is very promising. @PresidentHODL the discounts in rate for closed units can be given to all customers right? or only to $BSL holders? I’m ready to vote on this topic
Seems like a good idea. I like that $BSL holders get a discount as well. Great work John!