#8826 Development loan - 15.stage (Finland) Funded: 08.12.2022
This loan is operated by Estateguru OÜ and is subject to General Loan Terms. View loan terms
- The loan is used to continue construction works.
- The loan will be repaid from the sale of the collateral property or refinancing by a long-term bank loan.
- The loan is secured with a first rank mortgage.
- Borrower adds a 1% bonus to annual interest for investments of at least €10,000 (combined annual interest 13.5%).
- Asunto Oy Lahden Sinfonia is a housing company which consists of an 11-floor apartment building in the city centre of Lahti. It is located above the renowned Lahti Concert Hall, which is a significant landmark in Lahti and an inseparable part of the city’s history.
- The loan is secured with a 1st rank mortgage on the property as well as the pledging of the housing company shares of Asunto Oy Lahden Sinfonia.
- The current value of the property according to the valuation report () is €4 800 000. The value when completed is estimated to be €12 148 000.
- It is estimated that the project will be finished by the end of 2023.
- The borrower retains the opportunity to raise additional capital, if necessary, as the collateral value increases.
- The mortgage was established during a prior financing process and will also cover additional stages of financing.
- Prior to the next stage of financing, construction supervision must confirm the completed works (if construction has commenced and works have been performed in a considerable amount) and a third party must assess the market value of the collateral.
- The LTV in 15 stage is 36.26% and can increase to 60.0% in further stages.
- The loan is being refinanced to give the borrower more time to conclude the construction of the property. The borrower will repay the accrued interest (including indemnity and penalty fees, if any) for the previous loan period.
|Loan Contract Number|
Interest 12.5%Investment ≥ €10,000 = 1.0% Bonus
Collateral value €8,788,000
Projected LTV 60.0%
Loan Period 18 months
Schedule Type Bullet
Mortgage Rank First rank
Collateral Type Apartment building (Residential)
Loan Type Development loan
Loan Type Sub-Category Reconstruction
How is my investment secured?
EstateGuru's loans are secured with real estate collateral and a mortgage that is established on the collateral property. 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 establish the 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.
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 security agent will start the asset sales process. Hereby, the risk of losing the money lent to the borrower is minimized.
More about real estate collaterals can be found in EstateGuru's blog via the link
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, follows a very rigid funding structure, 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 having a strong business plan and solid collateral.
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. The interest rate can however be increased should the loan be prolonged for more than 6 months - in such instance interest rate is increased by 3%.
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 out of our marketplace you should invest your available funds into open loans to minimize cash drag. EstateGuru has an Auto Invest function which will take care of your investments without you having to worry about it.
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 loan must be placed into "funded" status at the latest after 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 yet, all adequate investments are marked in investors' portfolios as "reserved" funds.
Are the earned returns taxed?
The return that you receive from borrowers or EstateGuru is gross income, which means that EstateGuru does not deduct any tax from the amount. All returns earned from loans are treated by tax authorities as investment income and is thus subject to income tax. EstateGuru does not provide tax-related advice and recommends that you turn to a local tax advisor for additional information.
What is the procedure if the borrower cannot service the loan?
The aim of the due diligence 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. 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 an indemnity specified in the general loan terms. When the borrower faces financial difficulties, we will try to find the best solution for both parties. If the borrower is unable to repay the loan, we will cooperate with our debt collection partners and security agent to recover the debt through selling the collateral via an auction that is organised by the bailiff agent.
What happens to my investment contracts if EstateGuru ceases to exist?
EstateGuru is a facilitator of real estate 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 are the fees for investors?
Owning an investment account via EstateGuru is free of charge. EstateGuru charges a 2% fee for selling claims via the Secondary Market (the fee is applied to the seller) and a €1 service fee which is calculated and charged every time an investor withdraws funds from the virtual account.
An “inactive account fee” is charged as contractual penalty to users who have deposited funds in their accounts but who have not made any new investments on the Primary or on the Secondary market for the last 12 months and who have no active loans in their portfolio. The fee will be applied monthly in case there is a positive balance on the user’s account. If the cash balance is €0 then the fee will not be applied. If the user makes an investment, the account status will be switched to active again.
All fees can be found in our price list.