The marketplace lending industry is poised for exponential growth, according to Evan Gentry. “While banks and the CMBS market are pulling back, there are a lot of bridge loan needs out there,” he says. “That gap can be filled, in a large part, by marketplace or other nonbank lenders.”
Gentry is founder and CEO of Money360, a commercial real estate marketplace lending platform based in Ladera Ranch, Calif. His background in banking, mortgage technology, and startups propelled Money360's launch in 2014. In June, the company averaged about $50 million in loans per month; Gentry anticipates the average jumping to $100 million per month by year's end.
“I saw the opportunity to be a commercial real estate bridge lender,” he says. “The bridge market has just gotten better and better, because more and more loans don't fit bank lending standards. We're making loans to borrowers who don't meet the requirements of bankers or the CMBS market, but they're still high-quality borrowers that are just outside those boxes.”
Investors can participate in Money360's platform in several ways. Those looking for a diversified return can invest in a $200 million internally managed fund. But the company also works with whole-loan buyers, “where we'll originate a loan, fund it, and then sell it to a buyer who's looking for products,” Gentry says.
Many of Money360's borrowers “are coming out of a bank or CMBS loan maturity and although they qualified for that loan earlier, they no longer do because the standards have changed,” he says. He estimates that 75 percent of borrowers are refinance loans; 25 percent are purchase loans. And they're drawn to Money360 for speed.
“We close loans quickly,” Gentry says. “We can close in as quick as 10 days, although the average time frame is about 30 days.” He credits his 30-member team's experience, along with efficient use of technology, with speeding up the underwriting process.
“I think marketplace lending is here to stay,” Gentry says. “Whether the market is up or down, there are always commercial real estate loans maturing that need to get new financing. We feel like it's a very stable market.”