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what is peer-to-peer lending?
Peer-to-peer (P2P) Lending is a form of marketplace lending, which allows a person to lend money to another person or company as an alternative to financing through the more traditional big banks.
How long has CrowdProperty been operating?
CrowdProperty has been operating in the UK since 2014. We launched in Australia in 2020.
How does CrowdProperty makes money?
CrowdProperty is paid by the borrower for financing their projects – an initial fee and then interest on the amount they are loaned through the platform for each project, when it is completed.
Why I am not receiving your emails
Please check your junk mail or spam folder as this email can sometimes be sent there. If you are still experiencing problems please email us at hello@crowdproperty.com.au
WHAT INFORMATION DO I NEED TO PROVIDE?
To register an account, we will need: your full name, email address, date of birth, mobile number, proof of identity and proof of address (alongside other corporate details if investing through your company).
HOW DO I WITHDRAW FUNDS FROM MY STANDARD ACCOUNT?
If you have funds deposited in your Standard account, you can withdraw them on request. Fill in the ‘bank details’ section of your profile with the account which you would like them to be returned to, and then click the ‘withdraw’ button. This will take 1-5 working days.
HOW LONG WILL IT TAKE FOR FUNDS TO BE RETURNED TO ME AFTER I HAVE REQUESTED A WITHDRAWAL?
Once you have requested withdrawal you can then expect funds to be returned to you within 1-5 working days.
HOW DO I SET UP AN ACCOUNT?
To register as a lender with CrowdProperty click the link provided and add your necessary personal or company details. We will be in touch to arrange the next steps.
ARE THERE ANY FEES INVOLVED WITH SETTING UP A LENDING ACCOUNT?
No. Setting up a CrowdProperty account is free of any charges.
WHY DO YOU NEED ANTI-MONEY LAUNDERING AND KNOW YOUR CUSTOMER CHECKS?
As an authorised business, it is necessary that we perform certain Anti-Money Laundering and Know Your Customer checks to verify your identity and prevent money laundering. For this reason, we ask every lender to upload a proof of identity (we can accept a valid passport or driving licence) and a proof of address (we can accept a utility bill or bank statement). We are partnered with a third-party provider who perform electronic checks against certain watchlists also. For this reason, lenders are only able to pledge and open an account once these checks have been passed.
HOW DO I CHOOSE WHICH ACCOUNT I WOULD LIKE TO PLEDGE FROM: INDIVIDUAL, COMPANY TRUST or SMSF?
When pledging (view ‘how do I pledge towards a project’ for further information), specify the amount that you would like to pledge. Beneath this field, you must actively select which account you would like the pledge to come from. You will have the option of either Individual (Standard), Company, Trust or SMSF, depending on which accounts you have set up.
HOW DO I RESET MY PASSWORD?
To reset your password, log in to your lender account and view the ‘personal details’ page. Scroll down to the ‘Account Preferences’ section, and where it says ‘password’ enter your new password and confirm this in the confirmation box. Save this information and your password will reset.
CAN I TRANSFER FUNDS FROM A JOINT ACCOUNT?
You can transfer funds towards a project from a joint bank account. We will require a proof of identity and proof of address for every named account holder. The transfer must come from an account associated with the name of the account of the lender.
HOW DO I CLOSE MY ACCOUNT?
To close your account, please contact our team who will follow the necessary process. Please note, you cannot close your account if you have any active investments.
WHAT HAPPENS TO MY ACCOUNT AND INVESTMENTS IF I DIE?
The investments become part of your estate and will be managed in the first instance, by the Executors of your Will and then the beneficiary(ies) to whom you leave your estate. They, like you, will only be able to access and withdraw the funds you have pledged to projects and the interest made once the project has been completed.
WHO CAN INVEST WITH CROWDPROPERTY?
At present CrowdProperty can only make the offer available to Qualifying Investors, meaning an Investor who is certified by an Accountant to be a wholesale client or sophisticated investor as defined by the Corporations Act 2001. Investors need to be over 18, have an Australian bank account and have a proof of identity and address within Australia. We are able to accept investment from individuals, companies, Trusts and SMSF members who qualify.
WHAT IS A WHOLESALE INVESTOR?
A person who has aggregated net assets of $2.5 million or has gross income for each of the last two financial years of at least $250,000 a year is able to qualify as a Wholesale Client.
What is a Sophisticated Investor?
A sophisticated investor is usually a professional investor who either holds a Australian Financial Services License; controls assets of over $10 million; or is a listed entity or similar.
How do you become a Wholesale or Sophisticated Investor?
A qualified accountant must certify that you satisfy the wholesale or sophisticated investor criteria. We can assist by providing a form for your accountant to certify you as a Wholesale/ Sophisticated Investor. This certificate, once signed, remains on your account here at CrowdProperty for 2 years. After 2 years, new certification must be obtained from your accountant to confirm you still meet the requirements above mentioned.
DO YOU ACCEPT INTERNATIONAL INVESTORS?
No, we are only able to accept investors with Australian bank accounts.
DO I NEED AN Australian BANK ACCOUNT TO INVEST WITH CROWDPROPERTY?
Yes
I LIVE OUTSIDE Australia; CAN I INVEST WITH CROWDPROPERTY?
Unfortunately not. We will be sure to announce if this changes in the future.
CAN A COMPANY INVEST WITH CROWDPROPERTY?
Company directors or shareholders can invest through their company with CrowdProperty. Simply register your account as a company and enter the required information.
CAN I INVEST THROUGH SMSF?
Yes, you can invest with CrowdProperty through a SMSF. To learn more, visit our SMSF page.
WHO AM I LENDING TO?
You are lending to carefully selected property projects run by professionals. We require that either the borrower, or the contractors they have partnered with, have a proven track record of experience. There will be a Q&A session to learn more about the specific borrower and project before launch.
IS THERE A MINIMUM OR MAXIMUM INVESTMENT SIZE?
The minimum investment amount per loan is $10,000. We currently do not have a maximum investment size.
HOW LONG IS THE INVESTMENT TERM?
Loan terms can be anywhere from 3-24 months and vary depending on the project you pledge towards. The average loan term is around 14 months.
WHEN DO I START EARNING INTEREST?
Money deposited in your CrowdProperty account will not earn any interest. It will only earn interest when you use it directly to invest in one or more of your preferred projects on our platform.
DO I HAVE SHARES (EQUITY) IN THE PROJECTS I LOAN TO?
No. As CrowdProperty is a peer-to-peer marketplace lending business we deal exclusively with debt. Every pledge will be a loan towards the project as specified for the developer, and returns will be in the form of interest on the capital loaned.
CAN I ACCESS MY MONEY EARLY IF NECESSARY?
No, when you lend money through your CrowdProperty account, you commit to lending that money for the term of said investment. During this time, it is not possible to withdraw the original investment amount.
HOW OFTEN IS INTEREST PAID TO ME?
Interest is paid at the end of the loan term.
WHEN DO I GET MY CAPITAL AND INTEREST BACK?
You will get your capital and interest back at the end of the loan term, when the borrower has repaid the loan. This enables the borrower to have the cash flow to complete the project. If the borrower part repays early, you will receive a calculated partial repayment of your original pledge amount.
WHERE ARE MY CAPITAL AND INTEREST RETURNED TO AT THE END OF A LOAN?
At the end of the loan term, funds invested via the CrowdProperty account will be paid back into the same account with interest. You then have the option to either withdraw part or all of the funds, or reinvest the funds. At the end of a project, funds are returned to the wallet from which they are pledged (either Standard Individual, Standard Company or SMSF). You will then either have the option to keep money in the account and reinvest that capital and interest in future projects, to withdraw part of the funds or withdraw all funds (for more information see ‘How do I withdraw funds from my Standard account?’). Please note, funds must be returned to a bank account associated with the name of the lender. SMSF funds must be returned to the SMSF cash management account from which they came.
WHAT HAPPENS IF THE BORROWER PAYS MONEY BACK LATE?
Although there is an agreed loan term with the borrower, we cannot guarantee that they may not be late to repay the loan. In this instance, interest rates for lenders increase to 9% p.a. for each day over the loan agreement the borrower goes.
WHAT HAPPENS IF A BORROWER DEFAULTS ON A LOAN?
If a borrower defaults on the loan, CrowdProperty has first legal charge over the property and therefore seizes ownership. This is the same level of security that a mortgage company has. Once CrowdProperty has taken ownership of the property and project, our in-house experts will analyse what is the best route of action to follow to recover lenders’ capital and interest. We will consider market conditions, the status of the project and the current level of debt.
HOW DO I CHOOSE WHICH PROJECTS TO INVEST IN?
Project information is released before launch, including a Q&A session for each project. Here lenders can ask the borrower questions and understand project specifics in further detail to help you make investment decisions. Giving you the time to make an educated decision as to whether you would like to invest in this specific project.
WHAT IS A PLEDGE?
A pledge is an amount of money committed toward a project by a lender.
THERE’S NO PROJECT LIVE, WHAT DO I DO?
If there are no projects live and available to invest in, do not worry. We are constantly working hard to ensure we have a strong pipeline of projects available to lenders. Ensure you are registered as a lender to receive email updates to be informed of upcoming projects. Once a project is ready to launch, we will email you with Q&A details and launch dates and times.
HOW DO I PLEDGE TOWARDS A PROJECT?
You will hear about project Q&As launch dates and times, via email. On a project launch day, ensure you are logged into your personal lending account. Live and funding projects appear at the top of the ‘projects’ page. Click the ‘pledge towards this project’ button, specify the amount you would like to pledge and the wallet which you would like the pledge to come from: either Individual (standard), Company, Trust or SMSF Once your pledge has successfully been made, you will receive an email congratulating you and it will immediately show within the relevant portfolio.
HOW MANY PROJECTS CAN I PLEDGE TOWARDS?
You can pledge towards as many projects as you choose.
I’VE PLEDGED TO A PROJECT; HOW DO I DEPOSIT MONEY IN MY LENDER ACCOUNT TO FULFIL MY PLEDGE?
Once you have pledged to a project, you can either: A. Deposit funds in your account immediately. You can do this by viewing the deposit information on the portfolio of which you have pledged. Your portfolio will show you the account number, sort code and reference you must transfer to. Please note, whilst this money is not actively employed in the project you have pledged towards, you will not earn interest. Once we are ready for all funds to be transferred, we will then move the funds to fulfil your pledge across to the borrower. B. Deposit funds in your account once we have requested them. Approximately 1-8 weeks post project launch, we will send a message to your lender inbox requesting you to transfer funds by a specific date. The necessary account number, sort code, reference and amount will be detailed in this message. These funds, once deposited in your wallet, will move almost instantaneously across to the project.
I’VE PLEDGED TO A PROJECT; WHEN DO I NEED TO DEPOSIT MONEY IN MY LENDER ACCOUNT?
Once you have pledged to a project, you can deposit funds in your account either immediately post pledge, or once we have sent an email requesting funds. For more information, please see ‘I’ve pledged to a project; how do I deposit money in my lender account to fulfil my pledge?’. Please note, you do not need to have funds deposited in your account prior to pledging in order to make a pledge.
WHERE CAN I FIND THE LOAN AGREEMENT?
You can find the loan agreement on your loan portfolio. Click the view pledge button next to the relevant investment and find attached the loan agreement.
What is first mortgage security?
In the event of a loan default, a first mortgage secured loan will have priority if the property is sold to repay investors’ capital and interest. CrowdProperty only offers first mortgage secured loans.
MOVE TO INVESTING IN PROJECTS WHERE CAN I FIND THE LOAN AGREEMENT?
You can find the loan agreement on your loan portfolio. Click the view pledge button next to the relevant investment and find attached the loan agreement.
HOW DO CROWDPROPERTY SECURE MY FUNDS?
CrowdProperty undertakes numerous measures to secure your funds. First and foremost, we have first mortgage security on every project, meaning that, if the borrower were to default, we have ownership of the property and project. This is an essential, non-negotiable criteria. This means that, should a borrower default, CrowdProperty has ownership of the project and can determine the best way to complete the project to ensure lenders’ capital and interest is returned. Furthermore, only applications with certain loan-to-value, loan-to-cost, and profit-on-cost percentages will be considered.
IS MY MONEY PROTECTED by the Australian Government Guarantee Scheme?
Peer-to-peer (P2P) Marketplace lending is not covered by the Australian Government Guarantee Scheme and therefore, CrowdProperty is not.
HOW CAN MY FUNDS BE SECURED, BUT ALSO MY CAPITAL BE AT RISK?
When you invest with CrowdProperty, your funds are secured against an asset – the property. This means that your returns will never be less than the value of the asset itself. However, the reason your capital is at risk (as it is with any investment) is because we cannot guarantee market conditions will be positive and we cannot assure that the borrower will not get into significant difficulty with their project.
WHAT WOULD HAPPEN IF THE CROWDPROPERTY PLATFORM WERE TO FAIL?
The Australian Government Guarantee Scheme does not cover the insolvency of Peer-to-Peer (P2P) 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 was to fail: Investor funds that have not been lent to borrowers are held separately in Trust by a Trustee, Quay Wholesale Fund Services Pty Ltd. 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 of 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.
DO I HAVE TO PAY TAX ON MY INTEREST?
Interest earned from any loan is treated as investment income by the ATO. The return you receive on your investment is paid gross; no tax is deducted “at source” by peer-to-peer marketplace lending platforms. Our investors are responsible for the payment of any tax due of them to the ATO. Tax will be payable at your marginal rate.
HOW DO I CALCULATE MY TAX LIABILITY?
Investors can download a tax statement from their account which will calculate the amount of interest earned within a specified period for tax purposes.
DOES CROWDPROPERTY DEDUCT INCOME TAX ON BEHALF OF ITS INVESTORS?
CrowdProperty does not deduct income tax on behalf of investors. We do calculate the income tax which can be found on your tax statement. No tax is deducted “at source” by peer-to-peer marketplace lending platforms. Our investors are responsible for the payment of any tax due of them to the ATO Tax will be payable at your marginal rate.
DO I NEED TO BE AN EXPERIENCED INVESTOR/DEVELOPER TO OBTAIN A LOAN THROUGH CROWDPROPERTY?
Experiential knowledge is invaluable in the property market. At CrowdProperty, we focus on the potential of every project. This is why our team of experts appraise projects to determine the creditworthiness and ability to repay. Thus, we prefer to work with projects that have experienced developers undertaking them.
WHAT FACTORS DO YOU CONSIDER WHEN DECIDING WHETHER OR NOT A DEVELOPMENT SHOULD BE LISTED ON THE CROWDPROPERTY PLATFORM?
As a duty of care to protect our borrowers, we ensure that all projects comply with ASIC regulations. We also carefully assess every project contextually and against KPIs (Key Performance Indicators). We require all our projects to have planning permission. We assess projects based on key performance factors such as the Profit on Cost, Loan to Gross Realisable Value (GRV), Loan to Value and Loan to Total Development Cost (TDC).
WHAT SORT OF PROJECTS DOES CROWDPROPERTY FINANCE?
New build, self-build residential developments, commercial to residential conversion, HMOs, Boarding House development, serviced accommodation conversion, extension and renovation, strata titling, bridging purchases, auction purchases amongst others.
DOES CROWDPROPERTY DO INVESTMENT PROPERTY MORTGAGES?
No, CrowdProperty does not offer Investment mortgages. This is because this type of vanilla property finance is cheapest from mainstream banks and we recommend that route for anyone seeking conventional finance.
HOW LONG ARE THE LOANS FOR?
Loan terms are up to 24 months.
IS THERE A LIMIT ON HOW MUCH A DEVELOPER CAN BORROW THROUGH CROWDPROPERTY?
As a fast scaling business with a vision of lending $200m of property project finance per year by 2025, we do not currently have an upper limit restriction. However, we do have a lower limit of $250,000.
HOW MUCH INTEREST DO YOU CHARGE?
We charge up to 10% per annum interest rate and one simple fee up to 3% which is charged on successful fund raising. Costs will vary depending on project type and risk. All other third-party expenses are required to be paid by the borrower at cost (see ‘What are the costs associated with these loans?’ for a typical breakdown of additional costs.). We pride ourselves on having no hidden fees or charges like a broker fee, line fee or success fee. Do assess any offer for finance very carefully – they are often very complicated.
WHAT ARE THE COSTS ASSOCIATED WITH THESE LOANS?
Other than the interest rate and fees, all other costs are ‘at cost’ i.e. we don't seek to profit from them! As a rough guide, the initial financier’s report is typically between $2,000 & $4000 plus GST depending on the size of the project; QS reports required for drawdown payments are typically around $1000 plus GST (the number required depends on the drawdown structure); and legals will be around 0.5% of loan amount, typically around $5000 plus GST. Finally on exit, a charge is levied by the Land Titles office to redeem the first mortgage, which is paid directly to the appropriate state Titles office at cost, typically around $500 plus GST. If a specialist project requires a separate Trust or Special Purpose Vehicle then the developer should factor in any set up or wind up costs which would be a project expense.
Can I repay the loan early?
Yes, you can repay your loan early, this should be within the minimum term of 6 months and maximum loan term of 24 months, then you will not be charged for early repayment.
What happens if I can’t repay the loan?
CrowdProperty has first mortgage security over the property and therefore has the right to repossess. This measure will only be used as a last resort and we will work with you to find acceptable repayment methods. If you show no signs of reasonably being able to repay the loan then your property could be at risk of re-possession.
WHAT SECURITY WILL I NEED TO OFFER YOU?
There are no equity shares. We take first mortgage security on all our projects to protect both our borrowers and lenders.
DO INVESTORS GET ANY EQUITY OR SHARE OF PROFITS FROM PROJECTS?
No, investors do not get any equity or share directly in the profit from your project. CrowdProperty is a peer-to-peer lending business that deals exclusively with senior, secured debt. Every pledge will be a loan towards the project as specified for the developer, and returns will be in the form of interest on the capital loaned.
DO I NEED A SOLICITOR?
CrowdProperty has a solicitor which represents us and all investors, who we act on behalf of. Therefore, you do not need to employ a solicitor.
CAN I USE MY OWN SOLICITOR?
Yes, you can use your own solicitor. However we suggest that you work with a solicitor with a good track record of conveyancing.
How is CrowdProperty different from other P2P platforms?
What differentiates us from other lending platforms is our expertise and responsiveness. We place huge importance on providing a quick, simple and transparent service to property professionals to give you more time to focus on growing your property business rather than marshalling finance.