How To Borrow Money Against Your Domain Name
Just like any other valuable collateral, domain names may be used to secure loans to help grow your business or as security against selling your domain name. Using a domain name brokering service can help, although each situation is different.
Here’s how you can borrow money against your domain.
Do I Have A Valuable Domain?
The large majority of domains aren’t worth more than the $10-$25 per month it costs to keep them registered. However if your domain is made up of an attractive keyword or houses a successful website, it’s worth getting a free evaluation.
Who Lends Money On Domain Names?
Capital loan companies such as Lenovo and Domain Capital will lend up to $100,000 against domains — brick and mortar banks typically do not.
Part of the reason most banks don’t lend money against domain names is that they aren’t subject to as many government regulations as traditional loans. For instance the loan collateral (the domain), may not have an established value like a piece of real estate or a car does. There also aren’t set interest rates for domains, and many banks simply don’t have the structure to arbitrarily set their own rates for these types of loans.
How Can I Borrow Money Against My Domain Name?
The loan amount for a domain name will typically be less than the wholesale value of the name. The amount lent may be fluid, as well – the attractiveness of a domain can vary over time.
The application process is similar to that of any other type of loan. You’ll fill out an application, including proof of ownership for the domain name you wish to borrow against. An underwriter will review your application and approve a loan for a certain amount.
The interest rate is based on risk involved, although Domain Capital caps out at 15% per year.
What Happens If I Default On My Fault?
As Internet continues to be integrated with our everyday lives, the need for a fast, reliable connection becomes imperative. Fiber cable networks have the capacity to support our online needs for decades to come, but still have a long way to being fully integrated into our infrastructure.
Call your Internet provider to find out the status of their fiber network and see if you can get 1 gig Internet where you live.
Find Out The Value Of Your Domain
Borrowing against your domain could give your business the jump start it needs. If you need professional advice about taking out a loan against your domain name, we’re here to help.
Contact us today for a free domain name valuation or talk to one of our brokers about the lending process.
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