Abbreviations And Other Terms Used In Crowdfunding Space

Posted On : November 9, 2022

Before investing into real estate crowdfunding platforms it is important to understand abbreviations used in the market. Most of the project describtions are based KPIs and metris, so before interpreting them definitions should be clarified.

Note: this is supporting material, gathered from various sources and this does not guarantee that specific platform is interpreting this in the same way.

First pledge – first priority pledge on the asset, over which pledge agreement was executed.

Secondary pledge – secondary priority pledge on the asset, over which pledge agreement was executed.

LTV (loan to value) – is a loan to value ratio, which calculated as the proportion of loan size compared to total value of pledged assets.

Interest rate – proportion of the investment, which will be returned after indicated period (usually a year).

APR (annualized percentage rate) - proportion of the investment, which will be returned after a year. This abbreviation is used and relevant in case projects are shorter duration, than a year. For the comparison reasons it is better understood by the investors.

Duration – duration, for which the loan is being taken.

Value / valuation – value of the asset which was defined by the real estate valuator (real estate platforms usually uses certain valuators to conduct a valuation).

Investor – an individual person or legal entity, which is investing in the real estate crowdfunding project

Borrower, real estate project developer – a legal entity, which owns the pledged asset, is intending to do the development and is taking the loan.

Real estate crowdfunding platform – platforms, regulated by EU central banks under the license and providing services to real estate project developers and investors.

Bullet loan – type of the loan, when interest and principal is being paid at the loan maturity.

Crowdbulls .com

November 9, 2022