ROTTERDAM, Netherlands (MO.Properties) – Financial institutions often have strict guidelines that apply to a sweeping majority of scenarios and therefore become “lending policy.” Sometimes, however, individual cases that fall outside of the majority are denied funding even though they present a good business case for lending. Banks and other institutions may not have the flexibility to review projects on a case by case basis or make exceptions.
Crowdfunding has long been filling a gap with alternative funding for unusual endeavors such as art projects, inventions and small to medium business loans, but rarely has crowdfunding been applied to real estate development. Max Crowdfund is a relatively new player in the real estate crowdfunding market: Having achieved regulation by the Dutch financial authorities in August 2020, the platform aims to help property investors, owners and developers realize projects that are financially attractive, highly viable but fall through the cracks of the traditional lenders.
Having achieve this major milestone, Max Crowdfund can now list third party projects, allowing developers to arrange financing for the purchase of real estate, renovation projects, transformation projects and project development for property in Europe, providing they have a registered business in the Netherlands, United Kingdom or Germany.
“There are many great real estate projects that need financing and do not receive it from a bank due to bank policy or time constraints. Max Crowdfund is an ideal solution for this because the project can be realized using a type of bridging finance sourced from the public,” says COO Anne Visser. “After realization, the project can be refinanced or rented out, and the bridging loan paid back to investors.”
After receiving regulatory approval from the Dutch financial services authority, two real estate loans were listed in October, both of which were fully subscribed in under a month for a total of nearly €700,000. The first project listed on Max Crowdfund was funded in under a week.
The fully automated platform provides a user-friendly experience for both the investor and the lender, minimizing administration. All payments are also processed automatically.
Currently project developers can raise a maximum of 2,500,000 Euros, but this will soon be increased to 5,000,000 Euros since the European Union’s establishment of new central rules for crowdfunding platforms. Max Crowdfund plans to apply for a license under the new regulations to allow investors from all European countries to invest in real estate loans across Europe.