Groundfloor Lending Review for Borrowers: Rates From 9%, 1,182 Loans in 2025 and a Going-Concern Warning

Why this review exists

Search for “groundfloor lending reviews” and most pages are written for investors who buy Groundfloor's notes. Our own Groundfloor review is one of them, and someone who types “lending” is usually a borrower. This page answers the borrower's questions from the filings and the company's own pages: who the lender is, what it says it charges, how a loan gets funded, what happens at maturity and what the lender's finances mean for a project that needs several draws. It does not repeat the investor story. For that, see the going-concern explainer, the Notes review and Notes versus LROs.

1. Who the lender is

Groundfloor Finance Inc. is a Georgia corporation in Atlanta that files with the SEC under Regulation A (CIK 1588504). The investors' securities (limited recourse obligations, or LROs) are issued by the parent,, and each series corresponds to one real estate project financed by a commercial loan from the company, according to the March 2026 circular. The loans are made by the parent or a subsidiary. The circular says advanced loans are typically originated by a subsidiary, and the 1-K lists Groundfloor Credit 1, LLC, Groundfloor Credit 2, LLC and Groundfloor Credit 3, LLC among its wholly-owned subsidiaries.

Two readings of the HMDA result are possible, and the data cannot tell them apart: the lending entity is new and its first mortgage-reporting year may not be published yet, or business-purpose lending falls outside what it must report. We do not argue that it should report. The practical point is that the one public dataset that normally counts a lender's loans by year does not show Groundfloor, so the filings below are the only count.

2. What it says it charges: the site and the filings differ

The company publishes two sets of terms. The lending site is the current marketing price. The SEC circular is the legal range for loans that investors fund, and it is wider.

Three things to settle in writing before you pay the $495. First, the prepayment line: the home page and the fix-and-flip page contradict each other, and a three-month minimum at 9% on $300,000 is $6,750 (our arithmetic). Second, which fee schedule applies to your loan, since the home page and the FAQ give different ranges. Third, the default rate and modification fees: the circular lists “Loan Modification Fees” as variable, and the pages we read publish no extension fee at all. The flip page also says what drives price: “Rates and terms will ultimately be determined by borrower experience,” with a five-year experience lookback.

3. How a loan gets funded, and why it matters to you

The model is unusual. Groundfloor sells securities to individual investors, series by series, to fund each loan. The circular says the offering of a series is abandoned if the borrower withdraws or the series is “not fully subscribed,” and it describes a program that exists because of that risk: “we originate and advance Loans to Borrowers who have self-reported an immediate need for capital.” The conditions to be advanced are that “a contract exists to purchase the property within 45 days of the Loan being approved from underwriting” or that the borrower already owns the property. So a borrower with a purchase contract can be funded before investors finish subscribing, and the interest that accrues in between belongs to the lender, not the investors.

More recently the 1-K shows the loans moving into other hands. In 2025 the company “sold $49,268,100” of loans under loan sale agreements, issued $62,063,000 of Class A mortgage-backed notes secured by loans in May 2025 and $56,250,000 more in February 2026, and its first-half 2026 Form 1-SA for Groundfloor Loans 3 LLC shows that vehicle adding $45,532,871 of loans. The 1-K's note on that vehicle says about $26 million of fair-value loans would be taken off the parent's balance sheet. What this means for you: the party that funds and holds your loan can change after closing, and the 1-K says the company may keep servicing loans it sells. Ask who the lender of record is, and who decides on extensions and default.

One more term from the circular matters to a small developer: “Since the Principals are not obligors under the Loan Documents, we are limited in seeking recourse for non-payment to the Borrower itself.” That describes the loans in the circular, where the borrower is an entity that owns the property. The lending site does not say whether a guarantee is required on its current fix-and-flip or DSCR products, so ask.

4. Draws, interest and what you actually receive

Interest starts on day one on the whole amount. The circular says: “Interest begins to accrue on all Loan Principal from the origination date of the Loan, irrespective of when funds are advanced to Borrowers.” Draws are “always used for Loans in excess of $50,000” unless more than $50,000 is needed to buy the property; a loan of $50,000 or less funds in full at closing. Proceeds sit in an account that is “non-interest bearing” and pooled, titled in the lender's name for the benefit of borrowers. The borrower must submit invoices against the budget, and first-time borrowers may be asked for paid receipts, photos, lien waivers and title endorsements. The site adds that a draw takes “between 3 and 5 business days” after an inspection, and that you can request as many or as few as you like.

The company's own illustration in the circular is a $100,000 loan at 10% for 12 months with $5,000 of financed fees: the borrower's account is credited with $95,000 and the borrower repays $110,000. The worked example below applies the same logic to the site's current terms.

5. Maturity and extensions: the number to plan around

The circular puts the repayment history in one paragraph. Across 5,547 loans repaid through August 31, 2024 (about $898.7 million), “approximately 93.6% of loans are repaid with full principal and interest,” but only “approximately 52.7% of loans are repaid at or before the maturity date with full principal and interest.” Another 3.9% repaid with partial interest and 2.5% with a principal loss. In other words, nearly half of loans ran past their original maturity, and the company says those “are typically modified to extend the maturity date.” That is a statistic about loans that investors bought, from a 2024 cut-off, not a forecast for yours, and it covers all grades.

The 1-K shows what an extension looks like on the books. It sorts loans into three states: Current, Workout (“the Company has negotiated a modification of the original terms that does not amount to a fundamental default”) and Fundamental Default. At December 31, 2025:

Those are legacy loans: the 1-K says there were no amortized-cost loans originated in 2025. The loans originated in 2025 are carried at fair value, $155,090,590 in total, and of them only $936,431 (0.6%, our arithmetic) was 90 days or more past due at year end. That split cuts both ways for a new borrower. The recent book is young and mostly performing; the older book shows how often a short-term loan outlives its term. Other real estate owned, the properties the company took back, rose from $20,328,188 to $34,322,624 during 2025.

6. The lender's finances, as a borrower should read them

We cover the investor side in the going-concern explainer. For a borrower the question is narrower: will the lender still be funding draws in month nine. The auditor's report dated March 31, 2026 says “the Company has incurred losses and negative cash flows from operations since its inception, resulting in substantial doubt about the Company’s ability to continue as a going concern,” and that the opinion “is not modified with respect to that matter.” The 1-K reports a 2025 net loss of $11,071,453 and a total stockholders' deficit of $11,799,041 (2024: $2,368,458). Revenue came largely from borrowers: $16,513,996 of origination fees and $10,791,868 of loan servicing revenue in 2025, and the 1-K says the origination fee “is paid when the Loan is issued to the Developer and deducted from the gross proceeds distributed.” The company also says it will “continue the current strategy of raising equity and, in limited circumstances, debt financing” until it is cash-flow positive.

Nothing in these documents says draws will stop. The point is a diligence one: with a going-concern warning, ask what happens to your undrawn balance if the servicer changes, and prefer a loan agreement that is clear about the lender of record.

7. What it lends on: 23 funded projects by state

The March 2026 circular covers 23 series totaling $7,544,188, each tied to one property. These are only the loans investors were being offered in that amendment, not the whole book, and the project summaries themselves are images we did not read; the table counts the property addresses in the circular's list by state.

The median series is $286,998, the smallest $77,000 (Tulsa, Oklahoma) and the largest $824,999 (Brookhaven, Georgia). Thirteen states and the District of Columbia appear, in line with a footprint concentrated in the Southeast. Every series is above the site's $75,000 floor, and none comes near the “$2.5 Million+” top of the site's range, so the published ceiling is a ceiling, not what the investor-funded book looks like.

8. What a $300,000 loan costs on the site's published terms

We use the lending site's own numbers: a 12-month loan with fees financed into principal, simple interest on the full $300,000 from day one (the circular's rule), and no draw schedule effect. This is our arithmetic, not a quote.

Two stress lines from the same inputs. If the loan runs a month late at the circular's ceiling default rate of 20%, a month of interest on $300,000 is $5,000 against $2,250 at 9%, so each month in default adds about $2,750 (our arithmetic, at the circular's ceiling). If you prepay in month two and the home page's minimum applies, you owe three months of interest, $6,750 at 9%. Neither the pages nor the circular give an extension fee, so we have not priced one. Compare with posted prices elsewhere in our hard money loan rates data and the fix-and-flip loans guide.

9. What a reader can do with this

• Ask Groundfloor, in writing, which entity is the lender of record on your note, who services it and whether a personal guarantee is required.
• Ask which fee schedule applies (home page 2.75% to 4% or FAQ 1% to 3.75%), whether the three-month prepayment minimum applies to your loan and what an extension costs, before paying the $495 application fee.
• Plan the exit with a second route to repay: the circular says about 52.7% of loans repaid on or before maturity, so assume you may need an extension and price it.
• Before closing, ask what happens to undrawn funds if the servicer changes, given the auditor's going-concern paragraph.
• Look up the lender's license for your state yourself. We could only confirm the company's own Minnesota claim; we did not check any register.
• Get two other quotes on the same deal. Our hard money lender guide and loan requirements page show what to ask, and our lender vetting checklist shows which public records to check.

Sources: Groundfloor Finance Inc. Form 1-K for FY2025 (accession 0001104659-26-038396, filed April 1, 2026); Form 1-A POS offering circular amendment No. 9 dated March 12, 2026 (0001104659-26-027724); Form 1-SA of Groundfloor Loans 3 LLC for the six months to June 30, 2026 (0001104659-26-114492); the lending site lending.groundfloor.com home, FAQ, fix-and-flip and referral pages, read November 13, 2026 through a page-reading tool and treated as the company's claims; GLEIF record 984500UR6363B0540053; CFPB HMDA Data Browser API for 2023 to 2025. Quoted text is verbatim from the saved documents. Figures labelled “our arithmetic” are calculated by us. This is analysis of public documents, not investment, legal or tax advice. Compiled by CrowdfundedWealth on November 13, 2026.