#6536 Business loan - 3.stage (Lithuania)
Interest per annum
600 investors, €30,000 raised
#5047 Development loan - 1.stage (Estonia)
Interest per annum
1,451 investors, €143,000 raised
#4547 Bridge loan - 1.stage (Estonia)
Interest per annum
411 investors, €60,000 raised
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What is a Referral Bonus?
EstateGuru investors can earn an extra bonus by inviting their friends, acquaintances, and family members to join the platform. To receive your bonus, you should share your personal referral code (your EGU code) with the potential new investor. You can find your code at the top of your virtual account page or under the referral program sub-menu in the account settings section. For each new investor who joins and provides your code, we will give you a 0.5% bonus on any investment they make in the first three months after their account activation. This bonus will be credited to your investment account after the project the friend invested in gets funded. The same bonus is given to your friend, who also earns a 0.5% bonus on their first three months of investment.
What is the difference between development, bridge and business loan?
Development loan is a loan used to finance the development's planning process or the development/construction of the property itself. A bridge loan is a short-term loan used to meet current obligations before securing a permanent financing option, enhancing the value of the property or selling the underlying asset. A business loan is a loan used to raise capital for supporting the day-to-day activities of the firm, business expansion, acquisition of equipment or goods, cover pending obligations (taxes, etc.). Despite the loan type, all EstateGuru's loans are secured with a mortgage.
What is a stage loan?
Many developers face the challenge in which the current value of their development object does not enable them to raise the capital that is needed to complete the development object entirely. As EstateGuru only lends against the current value of the collateral not the future value, then for development loans we often make use of the stage financing method. This means that when the first investment round of an object enables the borrower to increase the collateral value of the property by developing the object further, then in the context of the given LTV the investment amount can increase via next stages of the loan. All loans are funded solely based on the current value of the object and a precondition for every stage is a new updated valuation report of the collateral.
What is projected LTV?
Projected LTV represents an LTV figure that EstateGuru's team is willing to offer for this particular project as a maximum. This indicates that within the next upcoming stages of the loan the LTV of the loan might increase up to the projected LTV figure.
Why is my investment in "pending" status?
"Pending" status indicates that the funds have been raised to finance the loan, however the notary transaction has not occurred yet. Normally the notary transaction will occur within 1 week from the end of the syndication period, however according to EstateGuru's loan terms the notary transaction needs to occur within 15 calendar days + 10 working days from the end of the syndication period.
What is calculated under "reserved balance"?
Once a loan is in "fully invested" status and has not reached the notary transaction just yet, then all adequate investments are marked in investors' portfolios as "reserved" funds.
Who can invest on EstateGuru?
You must be at least 18 years old and have a bank account in any of the EEA member states or in Switzerland in order to lend through EstateGuru. We also have to perform certain "know your customer" checks before you can start investing with EstateGuru.
What payment options are accepted by EstateGuru?
Users are welcome to make their deposits to EstateGuru via SEPA payments, LHV bank link, but also through third party service providers such as Transferwise, Lemonway, Trustly and Paysera. A user's first deposit is the means to verify the bank account, hence the first deposit needs to be done from the investor's personal bank account!
I have made a deposit to my virtual account but cannot make investments?
To invest on the platform your bank account needs to be verified. Hence, the first deposit needs to be done from the investor's personal bank account (SEPA payment). If you have made the first deposit from your personal bank account but investing is still not possible, please contact EstateGuru customer support.
What is the minimum investment amount?
The minimum investment amount is €50.
What is the predictable rate of return and interest rate?
Depending on the project characteristics the annual interest rate can range between 8% and 13%.
How is my investment secured?
All the loans are backed with a mortgage. Once the loan is fully invested, the borrower has to go to the notary office and enter into an agreement with the Security Agent to create a mortgage. The mortgage will then be registered at the Land Register (with the Security Agent as mortgagee on behalf of the investors). The Security Agent is a separate limited liability company whose primary purpose is to hold securities for the benefit of investors making investments via EstateGuru. The name of the entity is EstateGuru Tagatisagent OÜ. The entity is controlled by the leading Baltic law office of Triniti
What is an "open" loan?
The loan is in "open" status if the syndication period is ongoing and investing in the loan is still possible. Once the loan is full, the loan is placed to "fully invested" status.
What are the benefits of investing via EstateGuru?
EstateGuru makes it easy for investors to access a variety of real estate investments with a relatively small amount of capital. The minimum amount for investment is €50, which enables investors to create a diversified portfolio. All loans are secured with a mortgage.
What happens to my established contracts if EstateGuru goes into bankruptcy?
EstateGuru is a facilitator of real investments, we do not offer the management of assets. All investment contracts are signed between the borrower and the investor, EstateGuru simply facilitates this transaction. All client funds are separated from EstateGuru’s operational funds. Should EstateGuru suffer financial difficulties or go bankrupt, client funds are safe and can still be accessed. In such an unlikely event, a contractual entity will be appointed to take over the role of EstateGuru to serve all the investments.
What regulations apply to EstateGuru?
The Estonian Financial Conduct Authority (FCA) has confirmed in 2014 that any laws or regulations that apply to credit institutions or to broker-dealers do not apply to us as EstateGuru is not a finance provider but a facilitator. The FCA expected to release a new marketplace lending specific regulation in 2017.
Does EstateGuru guarantee my loans?
EstateGuru is not a bank, thus we do not fall under the scope of banking laws and regulations. Like with most forms of investing, peer-to-peer lending carries a degree of risk. We reduce this risk to our investors by conducting thorough due diligence and by taking asset security on every loan, in case the borrower is unable to repay their loan. EstateGuru does not guarantee your loans.
If all loans are secured, why don't the borrowers approach banks?
After the credit crunch and the resultant recession, the risk appetite of banks was reduced significantly, which means that banks have tightened their lending criteria. Banks have strict criteria, which is not borrower friendly and thus many loan applications are rejected by banks. EstateGuru is a small and flexible organization which is willing to help companies that are denied financing by banks despite their strong business plan and solid collateral.
What is the difference between secured and unsecured lending and why is secured lending better?
An unsecured loan is a loan which does not have any collateral in place, such as land or apartment, and is solely based on a borrower’s credit history and potential ability to repay. Secured loans have assets as collateral so that, if a borrower cannot repay the loan, EstateGuru's partnering law firm Jesse&Kalaus will start the asset sales process. Hereby, the risk of losing the money is minimized.
How do I start investing in EstateGuru?
First you need to sign up as an investor on our platform. Then you need to visit your email account and activate your user account. Before you are allowed to start investing, you are required to send us an accurate copy of your government-issued identification document. Transfer money to your EstateGuru virtual account. Choose a loan you would like to invest in. All loan repayments and interest accrued is held on your EstateGuru account
What are the fees for investors?
No fees apply to investors. All expenses are covered by the borrower.
Is it possible to invest though a company?
Yes. You need to create an investor account with your own name and in the end of the registration form, you have to choose “Select this if you represent a company”. Make sure to add the full name of your business and the correct registry code. Before investing you are required to send us an accurate copy of your government-issued identification document.
Do I earn interest on funds which I have not yet invested in loans?
We do not pay interest on uninvested funds. To get the best return from using our platform you should invest your money into open projects to minimize uninvested funds. EstateGuru also has an Auto Invest function which will take care of your investments without you having to worry about it.
If I make an investment into a loan application, when will I start earning interest?
You will start earning interest after the required documentation and creation of pledge is completed.
What happens when a payment is delayed?
As soon as the borrower is late in repaying an instalment, we will make contact on behalf of our investors to find out the reason behind the delay. In case of a delay, the borrower shall pay a fine specified in the general loan terms clauses 9 and 10. When the borrower faces financial difficulties, we will try to find the best solution for both parties. If the borrower is not able to repay the loan, the borrower will be given the option to take a repayment break. If the borrower is still unable to repay the loan, we will cooperate with the law firm Triniti, who will act towards recovering the debt.
What happens when the borrower wants to extend the loan period?
In case the borrower wants to extend the loan period, EstateGuru will investigate the reasons and assess the situation accordingly. If the loan period is to be be extended, the borrower will be obliged to pay a fee to cover additional documentation expenses.
How do you ensure that the borrower is able to repay the loan?
The aim of inspecting the borrower is to assess the company's ability to pay back the loan. We do a thorough investigation of the borrowers’ background, creditworthiness and current obligations. If applicable, the business plan and financial statements will also be investigated.
Is the interest rate fixed?
Yes, the interest rate paid by the borrower is fixed throughout the loan period. The payment frequency and interest rate can vary depending on the loan type.
Am I obligated to pay tax on interest that I receive?
The interest that you receive from borrowers is gross income, which means that EstateGuru does not deduct any tax from the amount. All interest earned from loans is treated by tax authorities as investment income and thus subject to income tax. Investors have the possibility to postpone paying the income tax by investing through a juridical entity, but will still be liable for tax. EstateGuru does not provide tax-related advice and recommend that you turn to a local tax advisor for additional information.