Focusing on the Collateral

The company was launched with the premise of 2008, says Peltz.

LOS ANGELES—Private lending in the commercial property arena has gone mainstream, yet with that increasing acceptance has come a heightened element of risk. “The largest segment of private lending is unsecured and many investors neither understand what they own nor what happens in the event of a default,”  says Harlan Peltz, co-executive chairman of iBorrow LP, a Los Angeles-based direct lender specializing in private money loans collateralized by commercial real estate. “The risks are far greater for unsecured versus secured private loans. These differences are not properly priced and may not be fully understood by investors.”

Peltz and iBorrow’s other principals believe the issue will continue to escalate as more borrowers seek loans outside of the traditional banking system. “Furthermore, the advent of electronic lending marketplaces has the potential to cause borrowers and investors to view lending as a fun videogame rather than real business, which requires serious scrutiny,” Peltz says. Founded in 2012 as Eagle Group Finance, the company does not currently offer an online lending platform.