Privlo has an unusual looking balance sheet from the outside. The business is an alternative financing service that allows users access to home loans outside of the post-recession banking system where credit requirements are both high and rigid.
To date, Privlo has raised about $6 million and has around $350 million in debt commitments.
“We wanted to be a little eye-popping with it, to show we are in business,” founder Michael Slavin told Forbes. “It is a huge commitment to a company just getting out of the base, though.”
The average loan through Privlo is around $250,000. The firm lends at rates 4.5 percent and hard money loans of 10 percent. Privlo then securitizes the loans, but maintains 20 percent interest in them to make sure they have a vested interest in the loans success.
The firm focuses its lending activating on those who are qualified, but who for some reason do not fit easily into banking eligibility criteria. They are explicitly not looking for sub-prime borrowers, but instead commission-bases sales people, fund manager and business owners who are obviously qualified and responsible, but who lack consistent income.
“We think it’s a $100 billion market,” says Spark partner Alex Finkelstein, reports the source Forbes. “The goal is to lend out billions a year, and with origination fees and then paying to the life of the loan, something like this can get pretty big pretty quickly.”
Spark invested in Privlo during its second round for $3.8 million, they studied Privlo’s loans at an individual basis to make sure the company maintains its high-quality borrower claim.
The company hopes to have $100 million in loans out by the end of the year.