Refinancing
The Vakaro Avenue VIII project from Lithuania is raising investments amounting to 250,000 euros with the aim of Refinancing and an expected annual return of 11.9-13.9%. The loan term is 12 months, indicating the period for the borrower to repay the loan amount and interest. In this case, the borrower must repay the loan within 12 months of receiving the loan. The project's risk level on the platform is indicated as C+. On the platform's website, it is stated that there are 10 different risk ratings ranging from "A+" to "D". Projects with ratings of "A+", "A", "A-" make up around 9%, while projects with ratings of "B+", "B", "B-" constitute the majority on the platform at 58%. There are also projects with ratings of "C+", "C", "C-", comprising around 30%, with the remaining projects having a rating of D. Risk ratings are intended to provide a better understanding of the project's level of risk. Ratings A and B indicate that the expected investment risk is lower than when investing in loans with ratings C or D, but the returns will be correspondingly lower if investing in projects with a lower risk level.
The project has a Loan-to-Value (LTV) ratio of 45%, which is within the established maximum value of 85%. The Loan-to-Value ratio (the ratio of the loan amount to the market value of the collateral) is an important indicator in the financial sector, especially in collateralized lending. In this case, an LTV of 45% indicates that the loan amount is 45% of the current market value of the collateral (likely real estate or another asset). The maximum allowable LTV value for the project is 85%, which may be a restriction or standard requirement for this type of financing. Such LTV restrictions are set to reduce risks for the lender and ensure a more stable financial position for the project. For example, the lower the LTV, the lower the risk of default, as the borrower has more equity in the project.
The internal project number is P00000873-8 on the licensed crowdfunding platform Profitus from Lithuania. The platform states that they obtained a license in November 2023 from the European crowdfunding regulator ESMA. The ESMA license is quite complex, as out of over 1000 platforms in Europe at the beginning of 2024, only 150 managed to obtain this license.
Please note that the information on the platform cannot be construed as a recommendation, guidance, or invitation to use a specific investment service and is not considered the basis or part of subsequent transactions. Investing always carries the risk of losing part or all of the investments. I agree with the Profitus platform and also recommend approaching investment responsibly by diversifying your investments. In EU countries, crowdfunding is not prohibited by the Deposit Insurance and Investor Responsibility Law.
