DrawBridge Lending, a loan service provider for Bitcoin holders, is launching its lending platform on February 13, 2019. DrawBridge can currently lend USD in 45 states and will initially offer loans to qualified borrowers, including institutions, cryptocurrency miners and investors/holders.
Borrowers can obtain a USD loan at 2.5% APR with tenors of 1-2 months or 5.5-6.5 months (depending on the loan program) by pledging their Bitcoin as collateral. The collateral will be held with a qualified and insured third-party custodian and a one-time interest and principal payment will be due at maturity.
“Our platform extends the benefits that most institutional investors are accustomed to in other asset classes in the financial markets,” said Jason Urban, CEO of DrawBridge Lending. ”Our goal at DrawBridge is to be the bridge between traditional pools of liquid capital and the evolving digital asset space.”
DrawBridge offers products tailored made for managing market volatility and price swings. The use of market structure allows DrawBridge to offer the most aggressive interest rates in the industry. Each loan will be pegged to a price ceiling at loan maturity, meaning the secured collateral will be redeemed for USD payable to the borrower if the price of the pledged collateral exceeds the price ceiling at loan maturity (for example, the price ceiling of the loan program ideal for Bitcoin holders will be between 1.7X and 2X of the Bitcoin price at the time of the loan).
“We have developed a product that addresses many of the needs in the market right now. By offering non-recourse loans with no margin calls, we allow borrowers to predictably monetize their holdings without the worry that downward market moves will force liquidation or capital calls,” said Tom Anderson, President of DrawBridge Lending. ”Moreover, we do this at a Fed Target-like annual percentage rate. Why should the big banks be the only ones to borrow at the window?”
DrawBridge has received strong preliminary demand from a variety of institutional users. DrawBridge is now accepting loan applications for the February 13th launch. Qualified applicants can go to www.drawbridgelending.com to apply for a loan and select a loan date on the DrawBridge Planner, a three-week calendar of dates and available lending programs.
Prospective borrowers will undergo a due diligence process and must be approved before the issuance of any loan. Once a loan is processed, borrowers will receive the loan principal in USD within 1 business day.
“We take compliance with legal and regulatory requirements very seriously which requires us to conduct thorough due diligence on each borrower. That said, the registration process is geared towards facilitating borrower due diligence leading to faster client onboarding,” said Matt Lisle, General Counsel of DrawBridge Lending.
DrawBridge plans on expanding its innovative product line in 2019.
“The DrawBridge team brings wide-ranging expertise and I am proud of their hard work over the last 8 months. While the DrawBridge lending program will be the first to launch, we have a variety of other fiat and coin lending products in late stage development. We plan on being the go-to lender in the digital asset space,” Mr. Anderson added.