{"id":21263,"date":"2023-01-20T13:20:35","date_gmt":"2023-01-20T12:20:35","guid":{"rendered":"https:\/\/landing.urbanitae.com\/2023\/01\/20\/8-what-are-the-debt-projects-like-crowdlending\/"},"modified":"2024-07-03T17:09:02","modified_gmt":"2024-07-03T15:09:02","slug":"8-what-are-the-debt-projects-like-crowdlending","status":"publish","type":"post","link":"https:\/\/blog.urbanitae.com\/en\/2023\/01\/20\/8-what-are-the-debt-projects-like-crowdlending\/","title":{"rendered":"What debt projects (or crowdlending) look like"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"21263\" class=\"elementor elementor-21263 elementor-13730\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-7b2850a9 elementor-section-boxed elementor-section-height-default elementor-section-height-default parallax_section_no qode_elementor_container_no\" data-id=\"7b2850a9\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-49d64c9b\" data-id=\"49d64c9b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7f4f2b5d elementor-widget elementor-widget-text-editor\" data-id=\"7f4f2b5d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><\/p>\n<p>Although it is always the same thing \u2013 financing a project \u2013 in the world of real estate crowdfunding there are two main types of strategies. On the one hand, there are capital <em>gains projects (<\/em>also known as <em>equity crowdfunding);<\/em> on the other, loan or debt projects (also called <em>crowdlending<\/em> or <em>debt-based crowdfunding).<\/em> We are not so much interested in names as we are in differences.  <\/p>\n<p><\/p>\n<p><\/p>\n<p>The most key difference is the degree of association of investors with the project. While in capital gains, investors with project partners, in debt projects <em>only <\/em>lend the money to the developer. In the first case, investors usually enter an earlier phase of the project. They only get their money back once all the homes in the development are built and sold.  <strong>In loan projects, they recover it when the term expires and with the interest previously set.<\/strong>  <\/p>\n<p><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b8aa0df elementor-section-boxed elementor-section-height-default elementor-section-height-default parallax_section_no qode_elementor_container_no\" data-id=\"b8aa0df\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-aeaff7b\" data-id=\"aeaff7b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-dc3ec1e elementor-widget elementor-widget-video\" data-id=\"dc3ec1e\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;youtube_url&quot;:&quot;https:\\\/\\\/youtu.be\\\/3uP80V5ePjg&quot;,&quot;video_type&quot;:&quot;youtube&quot;,&quot;controls&quot;:&quot;yes&quot;}\" data-widget_type=\"video.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-wrapper elementor-open-inline\">\n\t\t\t<div class=\"elementor-video\"><\/div>\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-efb1327 elementor-section-boxed elementor-section-height-default elementor-section-height-default parallax_section_no qode_elementor_container_no\" data-id=\"efb1327\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2f7005e\" data-id=\"2f7005e\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-8113a38 elementor-widget elementor-widget-text-editor\" data-id=\"8113a38\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>That is why equity projects\u00a0tend to have longer deadlines. By sharing the risks between investor and developer, the returns are higher. In loans, however,\u00a0<strong>The key is to ensure the developer&#8217;s ability to repay.<\/strong>\u00a0 That is, the risks of the project are similar, since we always talk about real estate development. But the repayment of the loan is not linked, for example, to the sale of all the units. Once the deadline has elapsed, the developer must return the money. If you have what, no problem.<\/p>\n<p>That&#8217;s where the guarantees come in. A clear example is a mortgage. If the loan is accompanied by a mortgage guarantee, that means that the borrower of the money responds, in case of default, with the mortgaged property, for example, the farm where the project is located. If the developer cannot return the money when due, the mortgage is foreclosed and the property, in this case the property, passes into the hands of the lender.<\/p>\n<p>However, the guarantee must have sufficient value. Therefore, a useful criterion when granting a loan is\u00a0<strong>look at<em> <em>the loan-to-value\u00a0<\/em> (LTV).\u00a0<\/em>\u00a0 In other words, we are talking about the percentage that the loan represents on the total value of the guarantee.<\/strong> The lower the LTV, the safer the loan is considered. It&#8217;s logical. If the LTV is 40%, that means that I have lent the equivalent of 40% of the value of the guarantee. If executed, the guarantee would more than cover my exposure.<\/p>\n\n<h2>Debt in Urbanitae<\/h2>\n<p>At Urbanitae, eight out of ten projects we finance are from\u00a0<em>Equity<\/em>\u00a0 or capital gains. Between\u00a0<a href=\"https:\/\/www.youtube.com\/watch?v=bLPHbj-RIQU&amp;utm_source=blog&amp;utm_medium=referral&amp;utm_campaign=urbanitae_blog_0123&amp;utm_term=crowdfunding_inmobiliario&amp;utm_content=matias_como_son_los_proyectos_de_deuda_crowdlending\">The reasons<\/a>, as Diego Bestard explains, is the difficulty of developers in finding capitalist partners in small and medium-sized projects. Even so\u00a0<strong>We have financed more than 18 million euros in\u00a0<em>crowdlending.<\/em><\/strong>\u00a0 A total of 19 projects ranging from 300,000 euros to 3 million, such as\u00a0<a href=\"https:\/\/urbanitae.com\/proyecto\/P000162?utm_source=blog&amp;utm_medium=referral&amp;utm_campaign=urbanitae_blog_0123&amp;utm_term=urbanitae2&amp;utm_content=matias_como_son_los_proyectos_de_deuda_crowdlending\">House of the Waterfall<\/a>.<\/p>\n<p>These are figures that we expect to increase rapidly with the launch of our\u00a0<a href=\"https:\/\/blog.urbanitae.com\/2022\/10\/27\/lanzamos-nuestro-prestamo-promotor-con-respuesta-en-7-dias\/?utm_source=blog&amp;utm_medium=referral&amp;utm_campaign=urbanitae_blog_0123&amp;utm_term=crowdlending&amp;utm_content=matias_como_son_los_proyectos_de_deuda_crowdlending\" target=\"_blank\" rel=\"noreferrer noopener\">Developer loan<\/a>. This product is focused on developers who do not obtain financing to start the works despite meeting requirements such as the ownership of the land on which it is going to be developed, the building license granted and a commercialization of between 40 and 60%.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Although it is always the same thing \u2013 financing a project \u2013 in the world of real estate crowdfunding there are two main types of strategies. On the one hand, there are capital gains projects (also known as equity crowdfunding); on the other, loan or&#8230;<\/p>\n","protected":false},"author":1,"featured_media":37556,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[723,822],"tags":[1507,1356,896,898,884,1359,1914,1953,897,895],"class_list":["post-21263","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aprende-a-invertir","category-learn-to-invest","tag-aprende","tag-capital-gain","tag-crowdlending-en","tag-developer-loan","tag-equity-en","tag-gains-en","tag-learn","tag-real-estate-crowdlending","tag-real-estate-debt","tag-urbanitae-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What debt projects (or crowdlending) look like - Urbanitae Blog<\/title>\n<meta name=\"description\" content=\"How is an equity project different from a debt project? 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