Financing Domains

[jamesb]

I read a report one day about some companies which could help you with financing the purchase of high value domains. Does anyone have any experience with such companies?

 

[Jeff]

Digipawn and DomainCapital.

DomainCapital is more like a traditional lender, whereas Digipawn is more like a pawn shop.

 

[jamesb]

Hi Jeff,

Would you know how this works. How much percent financing do they offer. For example, if you have a great idea to develop a certain domain name, would they finance the whole purchase price?

 

[Jeff]

It's going to depend on what they think they could get for the domain quickly in the wholesale market.

I think that the main difference between Digipawn and Domain Capital is that Digipawn loans solely on the value of the domain whereas Domain Capital is more like a traditional lender, and looks at your income and credit rating.

I'd be a bit nervous about financing a developed domain. If something went wrong, you'd not only lose the domain, but also all your development and marketing. I'd use a different domain for financing the one you're going to develop.

 

[Rick Latona]

I own DigiPawn. I would loan on .in names. I seriously doubt Domain Capital would. I'm not speaking for them so ask them. They are great guys. I just don't think they would.

 

[abhishekjha]

well domaincapital dont reply, while digipawn replies with a sweet "no" to my premium CCTLD domains and for all of my domains none of these companies has offered me even 2 cents! i bet they want to buy something like money.com for $0.001 xD

so its better to finance with your money, dont borrow or lend, its just gonna get you into debt! rather if you live in the USA, just use your credit card to buy hundreds of domains and refuse to pay the bills xD thats really the best and thats what good investors would suggest, but the rest is your wish!

 

[Jeff]

I've used Digipawn before and have been quite happy with them. Response time has normally been literally minutes. The paperwork involved is minimal and everything can be completed in 24 hours.

I can't speak for Rick, but based on what I've seen, I think that he is valuing domains at what he could sell them for quickly at a reseller level. That's pretty fair, as if you default on the loan, that is how he has to get his money back.

Borrowing on a credit card is probably better than using Domain Capital or Digipawn. But the purpose of each is quite different. Digipawn is great if you need funds quickly to close a deal and expect to pay the funds back soon.

Also, if you're self-employed, and earn your income from the internet, it can be hard to get credit from traditional sources, as quite frankly they don't understand what it is you do, no matter how simply you break it down for them. And they'll never consider the value of your domains as collateral - so you could have a very valuable domain portfolio, and still not be able to get traditional financing.

 

[intime]

I can't speak for Rick, but based on what I've seen, I think that he is valuing domains at what he could sell them for quickly at a reseller level.

True. An extremely bad way to finance. You would be getting little more than a penny on the dollar of it's true worth. Credit card is a much safer option or else you need to save until you can afford to develop the name. Under no circumstances should you risk pawning your domains, if things are that bad, better off to sell on the open market at Sedo with no reserve.