Before registering on the “Secured Finance MGMT” (hereinafter “LendSecured”) website www.lendsecured.eu, potential investors must read this document (hereinafter the “Risk Warnings”) and accept the risks investor undertakes.
Like any other investment opportunity, the projects listed on LendSecured website are associated with a number of risks. Please bear in mind that risks can cause significant deviations from the expected return, resulting in either profit or loss. All possible losses are borne by the investor, and therefore we advise you to carefully analyze and evaluate all associated risks, consider their impact and consequences.
Investment activities may result in both profits and losses, and the repayment of principal or returns is not guaranteed. The investment’s value may vary significantly over time. Past performance of any investment or asset class does not guarantee similar results in the future. Please carefully consider the amount of your invested funds and act reasonably when investing. As losses might be incurred, investment risks should be evaluated and selected projects shall be carefully analyzed and considered at all times.
The list of risks and warnings is non-exhaustive, and other factors may become of importance when deciding to use this website and carry out investments. This document should not be viewed as an investment advice or guidance, but rather an informative reminder of some of the factors to be taken into account prior to making any investment decision, including but not limited to the projects listed on LendSecured website.
Please note that due to market events, political events, macroeconomic changes or social circumstances, including changes in the legislation, the market may bring negative influences on your investment.
On the real estate market, the value of a property may be affected upwards or downwards by a wide range of external factors (of a political, financial and social nature) and internal factors (quality of the construction, maintenance and preservation of the property). Real estate crowdfunding is not unrelated to this reality, and consequently there is a risk of an investment returning less than the original investment made (or vice versa). The market risk could be reduced but not eliminated by diversifying your investments.
You should take into account that the target profitability and the information regarding each project provided on the website are mere business plans. In other words, they are forecasts and, as such, they may suffer fluctuations in their development and obtain returns different from those expected in the beginning or during the development of operations.
Legal and tax risk
Legal risk arises from the fact that the legislative acts regulating state supervision, the asset, ownership, investment activities or taxation of earned income may change during the investment period and influence your investment and the outcome of your investment.
You should be wary of any tax obligations that might apply to you as a result of any interest received on loans entered into on the website. Whether and how any relevant tax obligation applies depends on your individual circumstances.
LendSecured does not provide any personal tax advice, and we recommend you to seek professional tax advice both before and after investing so as to be up to date with the appropriate tax authorities.
Loans granted through the Platform are an investment. Prior to placing an investment, make sure to be prepared to have the funds unavailable until full maturity of the project, as well as keeping in mind the repayment is not guaranteed. Once your invested funds are placed into loans, there is no option to prematurely exit your investment and get your money back ahead of planned schedule. There is also no guarantee that you will get your money back at the end of the term of the relevant loan in the event of the borrower being unable to repay.
All projects placed on LendSecured are denominated in Euros. When initially converting a foreign currency for the sake of placing an investment via Platform in Euros, there is a risk that investor may suffer losses due to unfavorable changes in currency exchange rates. However, currency risk can easily be hedged using various risk management methods and instruments.
Inflation risk is a situation where the inflation rate reduces the actual rate of return or real value of the investment. Therefore the actual return rate or risk premium is the calculation excluding the value decrease after inflation rate has been applied.
Political risk or country risk is the chance of investment value changing due to the political changes or instability in the country. Radical changes in economic or legal environment (such as nationalization), internal political affairs or social crisis situations (such as civil war) are all examples of political risk.
LendSecured team has a sound business plan and financial projection carried out, sufficient amount of funding secured, as well a considerable amount of relevant experience in its possession to ensure successful, sustainable operations of the Platform.
In the unlikely case of LendSecured going out of business, the team shall grant its full collaboration with state authorities and appointed representatives, in order to ensure smooth exit and minimized losses for the users affected.
In order to mitigate the risk, we advise you diversify your investments across various asset classes, as well as several crowdfunding marketplaces.
Project default risk
LendSecured team carries out a thorough evaluation and due diligence of every submitted project prior to listing it on the Platform and welcoming public investments.
However, due to unforeseen circumstances both described above, as well as those not mentioned, every single project carries a possibility of not achieving the goals set out successfully, in line with the timeline forecasted.
Prior to placing an investment in a particular project, we strongly recommend you to carry out a subjective analysis, and be cautious prior to placing an investment.
Just as focusing on a single asset class when composing an investment portfolio is not recommended at all times, placing a significant share of total funds invested on LendSecured in a single or few projects is not advised. Just as investing in a single asset class significantly increases the exposure to a set of particular risks associated with this exact asset class, investing in a single project significantly increases the exposure related to this particular project's default and other risks.
In order to diminish exposure to the risks outlined above, composing portfolio that contains a variety of projects with different characteristics is a sound option.