Crowdestor is a P2P lending platform that lets you lend money primarily to businesses in the European Union (much like Wisefund or Envestio).
Of the business-to-business platforms, this one tends to offer the most projects, and some of them are really cool (for example, concerts from well-known artists like Limp Bizkit), and this gives an additional stamp of approval as you can clearly see the projects are real.
Types of investments in Crowdestor
Crowdestor is a Peer-to-Business platform, very similar to Wisefund or Envestio in this matter, as it offers business loans exclusively. This means you will mostly lend your money to EU-based businesses that pay you back in monthly instalments.
Who can invest on Crowdestor?
The platform is open, according to their FAQs , to any person who is at least 18 years old and can use a EU bank account (this means that it is theoretically open to overseas investors, as long as they can manage to use a European bank account).
Regarding deposits and withdrawals, you should be aware that it is possible to deposit money using Transferwise, but you will still need a European bank account in order to withdraw your funds.
Interest rates on Crowdestor
The platform lets you invest at interest rates that vary generally between 14% and 21%, with durations as short as 3 months and as long as two years.
A nice bonus to have is that interest rates start accruing from the day you make your investment (even before the project actually starts!).
Early Exit on Crowdestor and Secondary Market
One of the cons of Crowdestor is that it does not offer an early exit option, nor a secondary market. This means that if you want to have access to your capital before the loan is over, there is simply no way of doing so.
Is Crowdestor risky? How does its buyback guarantee work?
Crowdestor offers a buyback fund, whose size you can see in real time on this page . As of this post, the buyback fund has 212’331.08 EUR, which might seem a lot, but if you do an even summary calculation of all the oustanding loans, you’ll see it can barely cover 1% of the outstanding amount. In addition to that, it is not very clear by the verbiage how the fund would work in theory, fortunately fellow blogger Janis sent them several emails back and forth, and in the end he discovered that the fund works as follows:
(sic) Funds from Buyback Guarantee Fund are distributed as follows – in case there is a default project, the current project receives share from the Buyback Fund which is proportional to the outstanding amount of loans in Crowdestor.
If there is 2m EUR in outstanding loans, project is 200k EUR and Buyback Fund is 100k, it means that max cap distributed to the Project is 10% from Buyback Fund.Emails between Janis and Crowdestor
With a crude calculation, I would say you can expect in a case of default to be able to recover from 1 to 10% of your investment.
On the other hand, I believe the largest risk for any P2P investor is malicious behavior from fraudulent platforms, and in my opinion Crowdestor has demonstrated to have real projects, with real due diligence being performed, and they have also stated several times that they are co-financiers and have “skin in the game” in every project listed on the platform, so their incentives are aligned with ours.
They also have a spotless track record of recovering 100% of the loaned money, with no defaults whatsoever.
Based on all these factors, I still consider the platform to be fairly safe and have invested a large part of my portfolio in it.
If you want to take part in financing these projects, you can sign up using my link and you will receive a cash bonus of 1% of the investments you make in the first 90 days.