SALT Lending says Bitcoin loans are paying for tuition and payroll, not just trades

Bitcoin holders have long faced an awkward choice when real-world bills show up: sell the coins or find the cash somewhere else. SALT Lending says a growing number of its borrowers are picking a third option.In its latest report, the Denver-area lender says customers are increasingly using Bitcoin-backed loans for everyday financial needs. Those include tuition payments, working capital for businesses, home purchases and debt consolidation.A borrower posts Bitcoin as collateral, receives cash, and gets the coins back once the loan is repaid. Borrowers get liquidity without selling, which means they keep ownership of the Bitcoin and any potential appreciation that comes with it.SALT offers fixed-rate terms of one, three or five years, aimed at both personal and business customers. Pricing depends on how much a borrower takes out relative to the value of the collateral, a ratio known as loan-to-value, or LTV.At the conservative end, the company says APRs start at 7.49% for a one-year loan at a 30% LTV. Push the ratio up and the price follows. SALT lists a top APR of 10.50% for loans at a 70% LTV.There are no credit checks and no income verification. Once approved, funding typically lands within 24 to 48 business hours, according to the company.SALT, founded in 2016, says it has funded more than $2 billion in Bitcoin-backed loans since launch. It also claims a 100% collateral return rate, meaning no customer has lost collateral on its watch.SALT says it holds collateral in institutional custody and does not rehypothecate it. Rehypothecation is the practice of a lender reusing a customer's pledged assets for its own lending or trading.The company currently operates in 47 US states plus Washington, D.C. It has plans for licensing expansions into California and Nevada, with those targeted for the 2025 to 2026 window.One caveat worth keeping front and center: SALT's figures are its own. The lending volume, the clean collateral record and the claims about what borrowers spend the money on have not been independently verified. The breakdown of loan purposes, in particular, has not been quantified by any third party.The appeal for a long-term holder is mostly about avoiding a sale. Selling Bitcoin to cover tuition means giving up the position entirely. Borrowing against it keeps the position intact, at the cost of interest and some liquidation risk.For small business owners, the speed matters as much as the structure. A one-to-two-business-day turnaround with no credit check is a very different experience from a traditional bank's working capital process.The more cautious read is that the risks have not disappeared. A borrower at 70% LTV paying 10.50% is carrying real exposure to a volatile asset while servicing fixed debt.Things to watch from here include whether SALT secures the California and Nevada licenses on its stated timeline. Those approvals would bring it close to nationwide US coverage. It is also worth watching whether independent data ever emerges to confirm the shift in loan purposes the company describes.