When you invest in a Patch of Land offering, you are investing in a borrower payment dependent note (“BPDN”)—a promissory note in which the investor receives a stated interest rate for a stated term that is dependent on payment of the underlying loan between Patch of Land and the property developer. The BPDN is a contract between the investor and Patch of Land. Although the investor does not own any equity in the underlying property and their name is not on the property title, the BDPN gives the investor an interest—shared with the other investors who have funded the project—in the underlying property. The interest in the property is the right to receive monthly interest distributions as well as the return of principal upon the borrower's full payment of the underlying loan.

Interest rates differ for each loan and can range from 9% to 18%. Because each loan is unique, the interest rate is determined based on many factors such as risk. However, because our loans are for short-term real estate rehabilitation projects, they generally carry higher interest rates than other debt instruments.

For the most current listing please view our Lending Parameters

Patch of Land may charge a fee between 0-3% of the loan amount, which assists in covering costs associated with administration, servicing, and compliance. Additionally, if a loan defaults, we and certain third-party vendors do take certain fees from late charges, default rates, extensions, workouts, and other additional monies collected in the workout process. A breakdown and explanation of fees is available in our Private Placement Memorandum and other investor documents. You can download the full set of investor documents here.

Enacted in April 2012, the Jumpstart Our Business Startups Act (JOBS Act) fundamentally changed the way that entrepreneurs access capital. The JOBS Act was designed to encourage the funding or small businesses and startups by easing certain securities regulations for both issuers and investors. A few of the main provisions include:

• Removal of the ban on general solicitation, allowing companies to publicly talk about raising capital
• Easing the restrictions on the “accredited investor” requirement, allowing non-accredited investors (anyone over the age of 18 regardless of income or net worth) to invest in certain private placements
• Allowing the creation of online funding portals registered with the SEC for the purpose of equity crowdfunding (yet to take effect)
• Increasing the limit on the amount a private company could raise and be exempt from registering with the SEC

Read more: JOBS Act Review

Regulation A+ are the final rules promulgated by the SEC that were mandated by Title IV of the JOBS Act. The rules amended and expanded the existing exemptions under Regulation A by increasing the amount of capital smaller companies could raise through the offer and sale of securities. For more information about the requirements of Regulation A+, click here.

• The crowdfunding industry has grown 1000% in the past 5 years
• Crowdfunding contributes over $500 billion in funding per year
• Equity crowdfunding has already hit $662 million in the first quarter of 2015 and is expected to rise even further now that Title IV of the JOBS Act has finally been adopted
• Crowdfunding generates over $3.2 trillion in economic value per year

For up-to-date information check out CNBC Crowdfinance 50 Index

As our company continues to grow, Patch of Land is proud to be able to expand our product offerings into the commercial real estate lending space.  This move will allow us to provide more diversification across different asset types for investors and offers a viable long-term option to your portfolio.

Commercial real estate developers enjoy working with Patch of Land because of the following benefits we’re able to provide versus traditional and hard money lenders:

• Consistent and reliable funding – Gain access to a large pool of capital stemming from our network of accredited investors & institutional investor base.
• Speed to close – We know timing is everything. That’s why we’re able to close our commercial loans in 10-20 days on average, once all due diligence documents have been submitted and title is clear.
• Prefunded loans – Patch of Land funds your loan first so you don’t have to wait for the crowd.
• A nationwide reach - Our network of Investors spans across the United States.
• Ability to expand & grow your business - Take your business to the next level

Commercial Developers will typically utilize Patch of Land’s crowdfunding platform as a means of bridge financing.  This allows Borrowers to acquire the properties quickly and bring them to a stabilized state in order to sell, refinance, or execute another exit strategy.

The following are some of the commercial opportunities Patch of Land might offer:

• Multi-Family
• Office
• Industrial
• Hospitality
• Retail