Groundfloor uses a strict screening process to minimize risks for investors and actively monitors borrowers’ projects.
Every loan is anchored by the property and includes personal assurances. If a borrower defaults, Groundfloor can claim the property and the borrower’s personal assets, reducing the chance of total principal loss.
In 2022, of the loans settled for 849 properties, only 14 faced a principal loss.
The main concern is loan default. Unexpected renovation issues could delay or stop a project. Yet, if repayment is late, interest still accumulates. In extreme cases, foreclosure might occur, with investors receiving their part from the property’s sale.