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Author Topic: Financing Using Miners as Collateral?  (Read 83 times)
CryptoGatherer
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March 03, 2018, 01:19:18 AM
 #1

I hope this is the correct place to post this. If not, moderators please tell me where it would be appropriate.

Does anyone know of companies that would be willing to provide financing by using mining equipment as collateral? I know this is an unusual scenario. Finding financial institutions that understand mining and the value of the equipment is difficult.

If anyone has suggestions, please let me know.

Thank you.
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March 03, 2018, 09:59:05 PM
 #2

I hope this is the correct place to post this. If not, moderators please tell me where it would be appropriate.

Does anyone know of companies that would be willing to provide financing by using mining equipment as collateral? I know this is an unusual scenario. Finding financial institutions that understand mining and the value of the equipment is difficult.

If anyone has suggestions, please let me know.

Thank you.
With mining what is being required is the GPU's. These GPU's vary based on the necessity. For mining purpose there is special cards especially for mining apart from the normal consumer GPU. In this manner we cannot have collateral as mining equipment which is worthless when it goes for a second selling.

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March 03, 2018, 10:09:22 PM
 #3

You'll find it very difficult to find anyone willing to provide finance for income generated by mining. First of all your mining equipment would have to be generating more than what they need, and usually when something is offered for collateral it's at it's price that it can be sold for. A few  businesses are put up for collateral due to their earnings the past year, but it's far more likely that the businesses assets are put up instead of the actual business.

You could work out your last 3 years earnings with the mining equipment and send that to banks providing finances and see if they are interested. But, due to the difficultly and price of Bitcoin dropping and rising it's unlikely they'll be interested.

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March 03, 2018, 11:24:53 PM
 #4

I hope this is the correct place to post this. If not, moderators please tell me where it would be appropriate.

Does anyone know of companies that would be willing to provide financing by using mining equipment as collateral? I know this is an unusual scenario. Finding financial institutions that understand mining and the value of the equipment is difficult.

If anyone has suggestions, please let me know.

Thank you.
You can use pawnshop for that but what you want depends on agreement. For example they usually leave technics with them and give you money but some of them has option, for example on smartphones that they give you money + give possibility to have that smartphone with you. I have no idea what kind of deals do pawnshops have in your country, but do research.

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March 03, 2018, 11:34:57 PM
 #5

Using Bank would be impossible to obtain your loan, they only accept gold or propert, They rarely accepts anything else.
Try Pawnshop, as suggested by poster above me. Although don't hope for a big loan, pawnshops tend to take your equipment for cheap.
Not only the demand for Mining Equipment are low, its price can drop easily after a new series of Mining Rig has come out.

If your mining rig turns out to be GPU farm, you can probably forget it.
GPU used for mining are in poor condition and can't be / hard to be loaned  Undecided
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March 04, 2018, 01:04:01 AM
 #6

Thank you everyone for the replies. Besides using miners for collateral, in general, are there any financial institution that minimally would provide loans knowing your business is in the mining of cryptocurrency? Some of the more well known traditional institutions have been unresponsive or not interested in providing our organization with a loan. Just wondering if there are more progressive or open minded lenders out there.
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March 04, 2018, 03:42:50 AM
 #7

Does it mean you have mining equipment on hand? Right, then don’t need institutions to help you with that because they won’t actually understand it. Look for investors or group of them who also in cryptocurrency and it’s better that it is near your place of operation. This just a plain suggestion from someone who think there’s an interesting partners for you out there but you need to find it manually.

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March 04, 2018, 05:47:46 AM
 #8

Thank you everyone for the replies. Besides using miners for collateral, in general, are there any financial institution that minimally would provide loans knowing your business is in the mining of cryptocurrency? Some of the more well known traditional institutions have been unresponsive or not interested in providing our organization with a loan. Just wondering if there are more progressive or open minded lenders out there.

Probably not gonna happen.

Mining equipment isn't very liquid and is very specifically used. You'll only be able to sell it to someone that understands how to set them up, and use them to turn a profit. For a financial institution this is probably not feasible.

I think you may be able to chat to a few of the people on the mining subforum to get a financing deal on your equipment, as well as posting a loan request on the lending forum for interested lenders to finance your loan with the miners as collateral. No guarantees though.

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March 04, 2018, 08:04:53 PM
 #9

Your loan could be granted if you are applying for someone here in forum that you can meet personally to obtain those miners. But if you are referring to a banking loan and you'll use those miners as collateral, it would be very difficult for you. There are standards that has been set for them to grant someone's loan even the manager has knowledge with mining or cryptocurrency, he can't accept that easily. They have set protocols on what are the do's and don'ts for collateral. But if there's a bank that allows it to happen, that bank is certainly supporting crypto and their management is knowledgeable about it. Don't you have any other assets that you can use as collateral like car or house? but I guess you are only asking and you are not in dire situation.
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March 05, 2018, 04:47:56 AM
 #10

Besides using miners for collateral, in general, are there any financial institution that minimally would provide loans knowing your business is in the mining of cryptocurrency?
Most, won't but the following websites might come in handy (apart from the above suggestions):

1. Bitbond
2. BTCTCPOP

Take note: I haven't tested those but both seem to have mixed reviews.

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March 10, 2018, 06:42:16 PM
 #11

Your loan could be granted if you are applying for someone here in forum that you can meet personally to obtain those miners. But if you are referring to a banking loan and you'll use those miners as collateral, it would be very difficult for you. There are standards that has been set for them to grant someone's loan even the manager has knowledge with mining or cryptocurrency, he can't accept that easily. They have set protocols on what are the do's and don'ts for collateral. But if there's a bank that allows it to happen, that bank is certainly supporting crypto and their management is knowledgeable about it. Don't you have any other assets that you can use as collateral like car or house? but I guess you are only asking and you are not in dire situation.

I'm not in dire need. We currently have funds for the equipment. We are looking for alternatives to the funding we already have. It is not necessary for us to use the miners as collateral, it was just a thought. We do have other assets that can be used as collateral. I mostly would like to find a lending institution that is open to working with a crytocurrency business. Therefore non-traditional financing.
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March 10, 2018, 06:44:13 PM
 #12

To all that have replied, thank you.

Putting the whole idea of collateral aside, I'd like to just simply know of financial institutions that are open minded to working with a cryptocurrency business. We have been having difficulties with traditional financial institutions. Any suggestions of companies open to cryptocurrency businesses would be appreciated.
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March 10, 2018, 09:04:35 PM
 #13

To all that have replied, thank you.

Putting the whole idea of collateral aside, I'd like to just simply know of financial institutions that are open minded to working with a cryptocurrency business. We have been having difficulties with traditional financial institutions. Any suggestions of companies open to cryptocurrency businesses would be appreciated.
We can really see different adaptation but most of the time financial institutions are not really open minded anytime to collaborate with cryptocurrency business this is why we do really have difficulties if we do try to seek out back up finances towards this.For now i would suggest to look at for those things being mentioned by SFR10 above.This is also the thing comes to my mind.

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March 10, 2018, 09:16:39 PM
 #14

To all that have replied, thank you.

Putting the whole idea of collateral aside, I'd like to just simply know of financial institutions that are open minded to working with a cryptocurrency business. We have been having difficulties with traditional financial institutions. Any suggestions of companies open to cryptocurrency businesses would be appreciated.

Most banks are risk-averse and will not entertain proposals related to cryptocurrency or if it remotely endangers their compliance position. Bankers tend to be anti-crypto so you can expect to continue to encounter difficulties with traditional banks in the foreseeable future. This negativity is unfortunate but there is little room for change in an environment where governments offer little to no encouragement either.

As for your question above, would this be a query along the lines of establishing accounts with banks? Or is this specifically lending related? Lending will invariably require collateral. Accounts will depend on which country your business is registered in and which business model you operate. Banks will look into that for compliance purposes.

If you want flexibility, sign up for Estonia's E-Residency. Then register your company in Estonia. When that's done, you can quickly and painlessly open an account with Holvi. Holvi can open a business account for you. I'm sure they are crypto friendly.

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March 12, 2018, 04:49:14 PM
 #15

Thank you again for the additional replies. I will share this with my team.
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