What would happen if the CrowdProperty platform were to fail?

The Australian Government Guarantee Scheme does not cover the insolvency of marketplace lending platforms. Marketplace lending companies, like CrowdProperty, which are regulated by ASIC, are required to protect investors’ money in several ways if the platform were to fail:

Investor funds that have not been lent to borrowers are held separately in trust by a third party custodian, Quay Fund Services (our Trustee). These trusts are completely separate from CrowdProperty’s own money, and we cannot use client money for our own business purposes. These funds are held by the trustee and do not form part of our assets, which means that they would not be available to creditors in the event of our insolvency. 

The role of the trustee is to safeguard our investors’ assets. This means that in the unlikely event that CrowdProperty ceases to trade, the Trustee would take our place in administering existing loan contracts between investors and borrowers. In practice, this means that if a platform does fail, all investors’ existing loans would be unaffected.

The first legal charge that we take out on all property projects on our investors’ behalf would still stand if CrowdProperty became insolvent. This would continue to safeguard investors’ money and keep it secured against the asset, so that if a project developer were to default on repayments, the back-up service provider would operate on our investors’ behalf and take over the project to attempt to pay back investors’ capital and interest.