A Melbourne-based company is now offering crypto-backed loans. Helio operates under an Australian Credit License (ACL) issued by the Australian Securities and Investments Commission (ASIC). In the current bear market, cryptocurrency holders can borrow fiat money and keep their digital coins for better times.
Helio Lends Fiat Against Crypto as Collateral
Helio Lending accepts four major cryptocurrencies as collateral. The platform currently supports bitcoin core (BTC), ethereum (ETH), litecoin (LTC), and ripple (XRP). It offers loans for up to 48 months and with an APR of between 17 and 24 percent, depending on the value of the collateral.
Customers can choose between 30, 40 and 50 percent loan-to-value (LTV) ratio. For example, a 10,000 Australian-dollar loan with a 30 percent LTV would require the borrower to pledge 7.19 BTC as collateral. In this case, the APR would be 17 percent and the monthly payment 350 Australian dollars (around US $250).
Helio’s website has a calculator that can produce different loan configurations. The minimum amount that can be borrowed is set at 1,000 Australian dollars. The application process starts with providing a valid email address. To complete signup, applicants should follow the confirmation link sent by the platform.
Credit License Secured
According to Helio’s founder, John O’Shea, his company is the first licensed entity in Australia to offer crypto-backed loans. He believes there’s a massive market for digital assets in the country. Some estimates suggest that Australians perform cryptocurrency transactions worth around $2.8 million daily.
Speaking to Businessbuyinvest.com, O’Shea stated there are currently not enough service providers and companies willing or able to support the growing market and to loan against crypto assets. That’s why he sees an opportunity to “capitalize on something that is so highly sought after, yet so underserviced.” The entrepreneur explained:
We provide finance to both individuals and businesses through cryptocurrency asset-backed lending. This means that clients who hold bitcoin, ethereum, litecoin or ripple are able to use their assets as collateral for loan financing.
Unlike traditional lenders, Helio can rely on the digital assets transferred by its customers to a secured collateral wallet. In the event of a default, the company can sell the coins to cover the losses. At the same time, Helio’s customers can benefit from the protection provided by ACL and ASIC laws and regulations.
According to Australian media reports, Helio Lending has obtained its credit license by acquiring another company that held one, Cashflow Investment. The ACL license will allow Helio to offer its clients even more favorable terms in the future.