Frequently asked questions
What is Crowdadance and how does it work?
Crowdadvance is an online marketplace where investors and real estate owners and developers have DIRECT access to each other. We are often referred to as a crowdfunding platform, marketplace lender, or peer-to-peer lender. Whatever term you choose to use, we are here to connect investors who want to invest in short-term real estate opportunites. It’s that simple.
Through the Crowdadvance platform, accredited, industry non-accredited, and institutional investors have the opportunity to invest in real estate offerings online through a private, secure website. Investors can browse investments, review due diligence materials and sign legal documents securely online. Once invested, investors have access to an investor dashboard, giving them 24/7 access to watch how their money is working for them.
Borrowers and sponsors looking for capital can do so by filling out an online application, creating an account and going through our due diligence process.
We are here to simplify the capital raising process through the use of technology.
Is Crowdadvance secure?
Crowdadvance is committed to protecting the privacy and confidentiality of information. This includes but is not limited to physical and electronic procedures to protect information from loss, misuse, damage or modification by unauthorized access. Some of the central features of our security program are:
- Internal and external review of our public and non-public Internet sites and services;
- The use of specialized technologies such as firewalls and encryption;
- Rigorous multi-stage testing of the operability of products and features before they are exposed to the Internet as well as updates for known vulnerabilities;
- Monitoring of our systems infrastructure to detect weaknesses and potential intrusions.
How is Crowdadvance capitalized?
Crowdadvance is backed by two venture capital firms and additional several smaller strategic investors. In January 2016, we completed our first major capital raise for $2 million, which was led by Grizzly Peak Partners, a prominent venture capital firm and one of the first investors in OnDeck Captial.
What's the difference between a loan and Crowdadvance's and other online crowdfunding companies?
Crowdadvacne offers several significant differences from most other real estate crowdfunding companies. Crowdadvance focuses on short-term capital projects which range anywhere from 4 to 24 months. The ability to keep investments short-term and reinvest capital is a major advantage to the investor. ALL of the projects on Crowdadvance offer either MONTHLY or QUARTERLY income. Lastly, Crowdadvance investments are TRANSACTIONAL. YOU decide which projects to invest or not invest in. personal or business credit history. The application and approval process is faster, and no collateral is required. Short-term financing is available with terms from three to 24 months and it is generally repaid through automatic deductions from your business bank account.
WHAT IS BITCOIN?
Here is a list of things that you can only do with Bitcoin:
- Spend and transfer money internationally for less than a penny.
- Sell on the Internet without setting up with a payment service.
- Protect your wealth from devaluation by the government.
- Donate to any Bitcoin-accepting organization anywhere.
CONSUMERS LOVE BITCOIN
There are lots of reasons consumers love Bitcoin:
Paying with bitcoins is easier than using a credit card at check out. Unlike a credit card, with bitcoins, you don’t need to fill out a credit card number, an expiration date, a card holder name, or a CCV.
Merchants typically pay from 2% to 3% in credit card transaction fees. Merchants who accept bitcoins will be able to avoid credit card fees and can pass these savings on to consumers.
With Bitcoin, you only provide the necessary information to the merchant. For example, if the product is not being shipped to you, you don’t need to give the merchant your address.
With Bitcoin, you directly pay merchants and just like with cash there is no need to give them any payment information that can be lost, stolen, or used to make unauthorized charges.
Using bitcoins increases their value
If you have some bitcoins saved, you can make them more valuable by using them. Using bitcoins increases their demand which in turn increases the value of your saved bitcoins.
MERCHANTS LOVE BITCOIN
There are many reasons merchants love Bitcoin:
Reputable merchants can still provide refunds as needed, but this is at the merchant’s option and the merchant has no risk of fraudulent charge backs.
Low transaction fees
Receiving bitcoins is free and sending bitcoins costs less than a penny. Merchants can convert bitcoins to dollars and get volatility protection for half a percent (0.5%).
Accept payments internationally
Take payment from anyone, anywhere in the world with confidence. In seconds, merchants will see the payment is on the way. Usually, in one hour, the transaction is fully completed. Services are coming to eliminate the hour delay.
No payment processor set up or fees
Merchants accept payments directly from consumers. Merchants do not need a relationship with any service to begin accepting bitcoins. Merchants do not need to worry about a payment processor refusing their business, delaying their funds, or cutting off service.
Crowdadvance for Real Estate Professionals
How do I become a referral partner?
Email us at email@example.com to request more information about our Referral Partner Program. Or, call us at (888) 502-3849 and ask to speak to a member of our Referral Partner Team. If you are a suitable partner, we will send you our Welcome Pack and our Referral Partner Agreement. As soon as you sign and return the agreement, a member of the team will create a login for you to access your Partner Portal and we can get started working together on deals.
Is there a referral partner commission?
Yes, we pay our registered Referral Partners a fixed fee for any businesses they refer that get funded on our platform. This fee comes directly out of our own pocket from our origination fee proceeds.
When do referral partners get paid?
We do our best to pay commissions on the same date that the borrower receives their loan proceeds however not longer than 5 business days.
As a referral partner, how do I check the status of my client?
Use your login and password to access your Partner Portal via the blue ‘Sign In’ link in the upper right–hand corner of our homepage—www.crowdadvance.com. From your Partner Portal, you can complete and submit a loan application on behalf of your client, or you can share your unique Partner Affiliate Link (found in your Portal) so an applicant can submit their own application and it will tie back to your account.
Can my client enter their own application?
Yes. Every Partner Portal has a unique Partner Affiliate Link associated with it that can be found at the bottom of your dashboard. Just copy and send your Partner Affiliate Link to your client so they can access our online application.
As a referral partner, will you include me in all communication to the borrower?
It’s completely up to you. Every relationship we maintain is unique. We’re happy to reach out directly to loan applicants with requests for additional information, or you can manage the communication with your clients.
As a referral partner, can I receive a copy of my client’s Experian credit report?
No. For privacy reasons, we can only send a copy of your client’s credit report directly to your client and only after your client has provided us with the necessary verification information to do so.
As a referral partner, can I be copied on AAN decline emails to my client?
Unfortunately, no. For privacy reasons, we have to send all Adverse Action Notices directly to the borrower and cannot share that credit information directly with any other parties.
Who invests through Crowdadvance?
Crowdadvance investors include high net worth individual investors and institutional investors including family offices, registered investment advisors, private equity firms, hedge funds, banks, asset managers, and non-accredited individual investors who work in commercial finance.
Who can invest through Crowdadvance?
Both accredited and non-accredited investors who work in commercial finance are eligible to invest small business financing opportunities on Crowdadance.
To qualify as an accredited investor, you must meet certain thresholds as defined by the Securities and Exchange Commission under rule 501 of Regulation D. Specifically, you must meet one of the following criteria:
- Earn an annual income per individual of over $200,000 per year ($300,000 per couple) with the expectation of maintaining such level of income in the future.
- Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence.
- Be a bank, insurance company, registered investment advisor, business development company, or small business investment company
- Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
- Be a business in which all the equity owners are accredited investors.
- Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.
When I invest in a real estate project though Crowdadvance, what do I own?
When you invest in a real estate project on Crowdadvance the terms are set by the sponsor and typically include the following types of security:
- 1st Trust Deeds
- 2nd Trust Deeds
- Promisory Notes
- LLC Ownership
- DST Ownership
- Tenant in Common Ownership
What fees are involved for investors?
Joining Crowdadvance and browsing the marketplace requires no obligation. For those who choose to invest, there are fees associated with each investment. The fees depend on the type of investment (loan purchase or equity purchase) and the nature of the transaction. In addition to administrative and legal expenses, the fees will cover the ongoing reporting and communications for the investments. As we are big believers in transparency, you can find the specific fee structure for each deal when you browse through our investment opportunities.
What is crowdfunding and why haven't I heard about this before?
General Investor Questions
What are the benefits of investing though Crowdadvance?
Crowdadvance makes it easy for accredited, industry professionals, and institutional investors to invest in small businesses.
We provide access that was historically limited and pre-vet every investment in the marketplace. We spend countless hours sourcing real estate investments so you don’t have to. We also allow you to invest in real estate with dramatically smaller check sizes. Instead of $50,000 or $100,000 minimums, you can buy shares of investments with as little as $1,000. And we make the process frictionless – allowing you to screen investments online, sign legal documents online, and have access to all your documents in one place on your investor dashboard.
For institutional investors, we are a source of efficient and technology-based production, helping them diversify their portfolio while getting access to a wide suite of commercial debt products.
What will I actually own?
When you invest in a Purchase and Sale Agreement or "PSA", you are purchasing an unsecured note in Crowdadvance, LLC., the performance of which is tied to the underlying small business cash advance. This PSA allows you to receive periodic payments on the on the note if and when the borrower on the underlying business cash advance makes payments.
When will I get my investment back?
Depending on the property type that you invest in, the dividends or profits you receive may be paid out periodically usually either monthly or quarterly with a lump sum when the project is complete or sold. Each investment opportunity will have its own "hold period" as determined by the real estate developer or owner. Please note that the hold period is an estimate and may differ from the actual hold period.
Can I use a retirement account to invest?
At this time, we can (and regularly do) process investments made through a self-directed IRA account, but it will depend on your custodian's processes/procedures. Our two requirements are that the custodian be able to process documents via electronic signatures, and that it be able to process contributions and distributions via ACH transfer payments. Unfortunately, some custodians have problems meeting these conditions; inquire of your current custodian whether they can work with these requirements, and if not, we can refer you over to other providers who can meet these guidelines.
If a borrower stops paying, what happens?
If a borrower stops paying, we will determine what note modification or loss mitigation options to pursue before beginning foreclosure proceedings. Crowdadvance will inform all investors if any significant actions are taken on their specific investments.
Is there an investment minimum and maximum?
Yes. The minimum and maximum investment amount is different for each project and is set by Crowdadance. An individual investor my not invest more then 10% of their total account value any single offering.
Is the investment performance guaranteed?
No, the investments on Crowdadvance are not secured.
How often should distributions be expected?
Distributions depend on the specific investment, but are typically provided to investors monthly. Please review the expected distribution schedule for each investment before making an investment. No distributions are guaranteed.
Are these investments risky?
Yes they are. However, before placing any investment opportunity on our platform, the Crowdadvance team reviews all aspects of the proposed deal to ensure quality and to prevent fraud. While we recognize that every investment involves risk, and there is always the risk of losing your capital, we strive to reduce that risk by providing you the transparency and tools you need to make an informed decision.
What are the tax implications for investing in Crowdadvance?
Tax information regarding first lien debt investments is reported annually to investors on Form 1099. For other types of debt (like mezzanine debt), distributions may be characterized as interest, dividends, or other distributions, and investors may receive either a Form 1099 or a Federal and state Form K-1, depending on the structure of the transaction.
Crowdadvance do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. See offering documents for additional details, disclosures, and disclaimers.
Who is eligible to buy larger percentages?
Institutional investors looking to invest >$5 million are eligible to buy whole notes from Crowdadvance.
What is the process to get financing?
To apply for capital, start the application process here. You’ll be asked a quick series of questions about the property and you. Our propriety technology then will screen your application and if found to be suited, one of our account executives will reach out to discuss further details and provide you with a quote.
What are the advantages for owners and developers?
Most projects can qualify for short-term capital. You’ll need to provide some documentation, but far less than for longer term loans or equity investment. Projects can be approved as quickly as in a few hours and funded within days.
What sorts of rates do you charge?
We offer competitive rates but they are subject to a variety of factors including asset class, capital request size, debt to value ratio, sponors track record and time in business and capital structure.
Access Your Future
accredited and allow you to access to all our projects.