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Domain name loans

Labeled as question in Legal Discussion started by Shackleton, Jan 18, 2020.

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  1. Shackleton

    Shackleton Established Member

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    I'm sure the answer to this question will be that I should consult a lawyer/attorney. Nevertheless, here's the question. Is it legal for me as a Canadian to offer an American a loan to purchase a domain name as a sole proprietor? This would be an unsecured personal loan with a rate of interest about the same as credit card interest.
     
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  2. wallet2it

    wallet2it Deep Thinker @ DeepThink.org VIP

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    I think different states limit how much interest you can charge on the loan....
     
  3. Shackleton

    Shackleton Established Member

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    I don't think that will be a problem as I'd be charging credit card interest rates or even less, say 18% APR. The rate isn't important to me for reasons I don't want to get into.
     
  4. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent Gold Account VIP Trusted Blogger

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    It is a good question. I don't know the answer, but hope that someone does. I think the question is regarding is there a law in Canada that indicates you have to be accredited to do loans. I suspect there is indeed such a requirement. Although organizations like GoPeer supervise peer to peer lending in Canada, so maybe there is not such a problem.

    Is there a reason why the person buying just does not secure the loan from a third party themselves? That seems to me a better arrangement.

    Another option, if you are comfortable with it, is to offer them the domain on a payment plan so the buyer is essentially just making a payment each month. This article covers payment plan questions and options.

    If you get a definitive answer please let us know. Best wishes.

    Bob
     
  5. Shackleton

    Shackleton Established Member

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    Hi Bob, in this case I am not the seller of the domain name. Person A is buying from person B and I, person C, am providing a loan to person A.
     
  6. wurdd

    wurdd Established Member

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    If your loan covers the amount, why not buy the name yourself and then lease it to person A?
     
  7. JoeCanadian

    JoeCanadian Established Member ★★★★★★★★★★

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    As others have said I would do it as a secured loan. You buy the domain. Point the domain name as per ultimate buyers instructions. Transfer domain name when loan paid.

    Not sure whether strictly legal. Also not sure what government agency is going to come after you for a one-off transaction at a reasonable rate of interest.
     
  8. urlurl

    urlurl Top Contributor VIP ★★★★★★★★★★

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    why would you want to do this, and what collateral or guarantee the person you are loaning to will repay

    think worst-case scenario, you may end up with a name (assuming that the collateral) that does have the value or is not liquid enough to sell-off

    not sure what the realtionship is with you, the current domain owner and the person you want to lend money too

    but i would also be careful A and B may know each other and they are scamming a way to sell an overpriced under value name
     
    Last edited: Jan 18, 2020

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