In this Crowdestor review, we will take a look at the rates, loans, bonus offers, and buyback guarantee that the platform provides. This will be an impartial and unbiased review.
What is Crowdestor?
Based in Riga, Latvia (the company is incorporated in Tallinn, Estonia), Crowdestor is a crowdfunding platform, which offers the opportunity to invest directly in real estate and business projects. In every project on the platform, Crowdestor is involved as co-financier and/or co-developers. This ensures accountability from their development partners on behalf of their investors. You can start investing from €50 and with annual interest rates from 12%. All loans are listed in EUR.
My personal average is 16.86%, and most of the loans on Crowdestor offer high yields that can be as high as 26%. There was also a cryptocurrency mining farm project that has since been paid back and was yielding 36%! Keep in mind that you start earning interest from the moment you invest in the project and not when the minimum funding target is reached.
All loans on Crowdestor are for business loans and vary from development projects and restaurants to cryptocurrency mining farms. The terms are from 3 to 18 months. Also, as you can see in the picture above, the platform gives you a fair warning before a project is live to transfer funds in your account. Some projects are funded rather quickly, so make sure to make your transfers on time. The platform is providing an extensive project description and also documentation that you can download to perform your due diligence.
Crowdestor offers a limited selection of loans, usually not more than a couple on any given time, but their size is decent, and their rates are always high. Also, they always post the loan on their platform days before it is available for investment so investors can perform their due diligence and transfer funds into their accounts to invest in the loan. The platform has kept up with demand and continues to publish projects at an impressive rate. Something that investors with large portfolios will definitely appreciate.
Crowdestor introduced its BuyBack Guarantee on March 1st, 2019. It is actually a buyback fund that Crowdestor is contributing a certain percentage of each loan financed on the platforms. That percentage is between 1% and 2% depending on the project. It is not a fee that is taken out of the investor’s portfolio but a contribution that the platform makes towards its investors’ safety. They have also made the initial contribution of 50,000 Eur to get it started as well.
The Fund has a current value of around 320,000 EUR as of January 2020 and is ready to be deployed in case of borrow default. I hope it will never come to this, but it’s nice to know it is there if we need it.
For more information about the Buyback Fund, click here.
Crowdestor does not offer the option of auto-invest, but this is not a real issue since projects are limited and relatively large. Also, you will get a notification email when projects are about to be available.
Now that Crowdestor introduced its BuyBack Guarantee, the risk is whether its provisional fund is enough to cover the default. So far, no defaults have been recorded on the platform, but then again, it’s a new platform. For more information about the risks from peer-to-peer lending activities, please check the “What Is Peer-to-Peer Lending” article.
Crowdestor is not offering an early exit option at this time. This includes a secondary market as well. It is pretty common for business crowdlending platforms not to have a secondary market but rather have an early exit option. Platforms that have this option usually charge high fees if you want to use it. That fee ranges from 5% to 15%, and I believe those figures are both high. Hence, I would never use it so the fact that there is no early exit option available is not an issue for me.
As accustomed to p2p and business crowdlending platforms, Crowdestor charges no fees for investing in their platform.
How Did Crowdestor Do During Covid-19
Crowdestor had some problems during the pandemic and it also took some preventive measures to help their loanholders go through the financial turmoil. Mainly, they introduced a leniency period towards the borrowers util the end of June 2020. During this time Crowdestor deferred loan repayments and did not affect any liens or other securities that Crowdestor held. However, that meant that investors were not receiving interest nor principal payments. After this stressful period, some businesses that took loans from Crowdestor had a difficult time resuming payment but everything went back to normal.
Crowdestor Sign Up Process
The sign-up process is pretty standard. You can click here (by doing that, you will also earn 0.5% additional cashback for the first 180 days) and follow the steps on Crowdestor’s page. You will also be required to upload a picture if your ID card. The sign up process is pretty quick and will take you about 5 minutes to complete. However, you will have to wait for about a day before they verify your ID card so you can transfer funds to your account.
Crowdestor doesn’t really have any direct competitors right now after Envestio went under. At least any significant ones that can cause some competition. However, some real estate crowdfunding platforms have similar CrowdEstate, EstateGuru, BulkEstate. You can click here to check platform reviews and here to see the bonuses that some of them provide.
Crowdestor Review – Conclusion
Crowdestor offers a decent alternative for platforms like WiseFund. It has one of the highest rates on the market and a great bonus program. I have been using their platform for a while now and it has been great with all loan repayments being on time.
Crowdestor Promo Bonus
This is an 100% impartial and unbiased review of Crowdestor. However, if you would like to invest through the platform, I would appreciate it if you could use my referral link. It gives you an exclusive 0.5% cashback from each investment made during the first 180 days from your investments. When registering you can leave “promo code” blank. The cashback promo is automatically applied with the link.
The Crowdestor referral link is not working with ad-blockers, so if you are experiencing problems, you will have to disable it. Don’t worry, this blog does not contain ads.
If you would like to add something about this Crowdestor review, please leave your comments below.
Until Next Time,