What is Bitbond?
Investors are able to benefit from the interest of the bitcoin they lend out, and small business can kick start their operations with these loans.
The company has been operating for six years now and has over 100,000 borrowers and lenders with a total loan volume of nearly 1.5 million dollars.
The Chief Executive Officer of the company is Radoslav Albrecht, who also founded the company.
Bitbond lets small businesses borrow $1,000 up to $25,000, with the option to repay the sum anywhere from 6 weeks to 5 years.
The company’s services are available in 120 countries around the world.
The only supported cryptocurrency on Bitbond is Bitcoin.
How does loaning on Bitbond work?
In order to use the platform to make loans, the credit rating of the borrowers has to be established.
The ratings are ranked from A, the highest, to F, the lowest.
After this, the borrowers post the project in the marketplace where investors select which offer is the most attractive.
The listings have to be fully funded in 14 days, but the auction will be closed if the listings get all the money it needs before that time expires.
The minimum sum which can be lent by investors is 0.01 BTC and borrowers are not allowed to take on multiple loans at a time.
When Bitcoin’s price goes up during the lifetime of the loan, the number of Bitcoins that have to be paid back goes down. Also, when the price of Bitcoin decreases during the lifetime of the loan, the number of Bitcoins that have to be paid increases.
Loan Interest Rates
The interest rates generated by loans are not fixed. The rates vary depending on the borrower’s ratings and the terms of the loan on which both parties have agreed upon. Bitbond’s interest rates can be anywhere from 7.7% to 25%.
Deposits and withdrawals
Deposits and withdrawals to Bitbond accounts can be made by residents from SEPA-supported countries of Europe. Bitcoins can be deposited directly into Bitbond wallets. There are no fees for fiat or bitcoin transfers, but there may be a network fee applied.
A one-time origination fee of 1% to 3% of the total loan amount is applied. Depending on the length of the service, these fees may vary. If you have to repay the loan in a shorter amount of time, you are charged a lower origination fee.
Bitbond reviews your business to establish if you are eligible for a loan. You will not be required to submit audited financial statements. You have to complete and submit a borrower’s application. This information attached with linked business accounts such as eBay, Amazon, and PayPal, will then be reviewed by Bitbond.
Your approval is determined by these factors:
- Your credit score.
- Type of employment.
- Country of residence.
- Personal business accounts.
- Payment history of bitcoin loans where available.
- eBay feedback score if available.
Bitbond does not fare well when it comes to its customer support. Several online reviews show that there have been many unsatisfied customers. The most common claims are the support team’s ineffectiveness and very slow response (a week from the filing date). There have also been complaints about high penalties due to Bitbond’s collecting partners’ inability to send their loan repayments in time.
- Go to the official website at bitbond.com and register for an account.
- Select if you would like to be a borrower or a lender.
- Enter the personal data required: name, email, password and agree to the terms and conditions of service.
- You will receive a confirmation link at your email address.
- You will be navigated back to the login page where you will have to put in your credentials to log in.
- Personalize your account however you want.
- Have your account verify by clicking on start verification.
- An identity TM agent will give you the next instructions in a video session.
- To lend Bitcoin, you have to first click on the Bitcoin symbol and send funds to the featured Bitcoin address.
- Wait for the transaction to be confirmed.
- Next click on invest in loans.
- Customize your search to find loans you are interested in.
- Verify loan description and see if it is convenient for you.
Bitbond is a lending platform that caters to small businesses seeking Bitcoin or fiat loans. Although the platform is based on a good concept, there are some issues with the business model they implemented, as there are some significant flaws which have been pointed out by users.
The main issue with Bitbond is that it does not offer any guarantees to investors that their loans will be repaid in full. The default mode is very disadvantageous for the investor as they can lose most of their money, and even so, loan backing is very poor.