Crowdfunding – Grouping of loans

Real estate projects and renewable energies in mind

Real estate projects and renewable energies in mind

Crowdfunding platforms were used by 3.89 million French people. They have financed various projects, the majority of which have, however, been in the field of real estate. Funds raised in France in 2017 rose by 44%, reaching a record 336 million euros. One-third of this money was used to invest in a real estate project, which doubled the collection of this sector.

This record figure was reached because new tools were made available to individuals who are fond of this type of investment, which until now was reserved for professionals. It is :

  • participatory titles
  • Mini-good
  • mandatory emissions

Participatory finance in France is worth 940 million euros, most of which is represented by platforms, followed by consumer loans and online pools and SME loan funds.

Although the amounts collected were mainly attributed to economic activities, only one-third was intended for cultural or social activities. Real estate won the prize with 42% (109 million euros) of funded projects. In second place, are renewable energies, with a collection of 57 million euros, which represents 22% of the economic activities financed.

Concretely, the real estate crowdfunding results in an investment in bonds at 92%, and an average investment duration of 18 months. From 2016 to 2017, the number of projects went from 134 to 220, for a collection whose funds went from single to double (55.2 million to 101 million euros).

High yield but risky

High yield but risky

The return on participative real estate is a considerable asset, since it equals 9.9% on average. Many projects have fallen by the wayside, either by the bankruptcy of the developer or by abandonment of the project.

Nobody can then predict what the outcome of the dispute will be. If luck is involved a full refund can very well intervene, or conversely a total loss of invested capital.

A boon for renewable energies

A boon for renewable energies

Both fundraising platforms and renewable energy players have benefited from growing investor interest in the sector. With a softer regulation and a device more and more efficient, the recipe has continued to grow. Growth that has increased by 40% between 2015 and 2016.

Projects meeting the financing conditions, of which a part is reserved for crowdfunding have obtained bonuses. As an example, the creb, whose investors were to reside in the project department on the one hand and to commit to the project for another three years after completion of the project, was awarded € 3 and € 5 bonus per megawatt hour (MWh).

In short, the renewable energy sector is still evolving and promoters are continually attracting the attention of both professional and private investors.

For a household that wants to embark on such an investment, crowdfunding can represent serious gains. It is necessary before choosing a project to be well informed and to know all the risks. If the finances are already unbalanced by too many credits, to clean up the situation, a grouping of loans is ideal. A new single loan with a single monthly payment that is revised down * and a favorable rate is then subscribed. It is then refunded over a longer period which increases its total cost.