New investment class – crowdlending

Invested 100€ into agriculture crowdlending Heavyfinance platform with 10% interest, +8,5€ post-tax annual income.

Only comment here – never say never 🤣 Yup you read that right I decides to put some small money into so called “play money” segment, for very risky investments.

For some time I was thinking about 3y Mogo bonds with 11% interest. Old car leasing doesn’t look that risky as p2p consumer lending, or risky RE development bridge loans, but then investigated more what the company is doing and found 2 major red flags. 1. Mogo “expanded” to more exotic countries in central Asia and Africa consumer lending… basically it went for that p2p segment. 2. There is major 100 mEUR eurobonds maturing at 2022, which will be a major challenge to refinance. Yes maybe im wrong, but I think it is better to go for 10×100€ p2p investment directly then, then risk at these exotic markets and that major liquidity pit coming next year. So I decided to pass.

But the playmoney with higher risk/reward was on my mind. There are some recommendations to have up to 5% of your portfolio in risky investments, so called play money. It could be high growth stock like Tesla or Amazon, or it could be cryptocurrencies. Also I consider p2p investments as same high risk/reward class. As some of you know my negative view on p2p, in general that didnt changed – I still consider p2p crowdlending as junk lending, but then I found one very interesting crowdlending platform – Heavyfinance (yes, its a referral link, some benefits for both you and me if you decide to invest here as well). What I like here is that its agriculture sector🚜, and that is in essence lower risk compared to RE development (land plot, construction, reconstruction) or consumer lending that other crowdlending platforms operate. Farmers and farming companies borrow money here for equipment, land or working capital with 10-14% interest💰. Crop growing is heavily subsidised in EU so farmers get 100-200€/ha subsidy from EU no matter the harvest or crop price and that something to get your money back from. Also platform provides financial statements.

Farmer that I lend those 100€ Has +300 Ha own land (crop declaration), average EBITDA of 85 k€/y (140+50/2) of good year 2020 and bad year 2019. Has 250k€ of loans and with this new loan will add +50k€ (100k€ loan – 50 k€ subsidy) that brings leverage x3,5 or 1k€/Ha. I say that is a reasonably low level. Equity ~50% after financing also very decent. I just could not get it why the farmer use such high interest borrowing, where is the catch🤔with such acceptable ratios. Options:

  • too small amount for banks – 100k€,
  • too short period 2y,
  • low fertility lands (loss making 2019),
  • no restrictions for activity (borrowing, investing, dividends ect.)
  • Risky movable collateral (equipment)

But sounds too good to be true. Either way it is play money and just a 100€. Im thinking to keep it very low 1% or 2% max from my portfolio – amount that I can lose ☺ Platform has Lithuanian ban permission and is monitored by them, so this should not be a scam like few platforms we saw.

So there you have it – never say never rule at work. P2035 is officialy in crowd lending business 😎 Next cryptocurrencies 🤣 No no for now Im out of it as they generates no value or return and is pure speculation. Here farmers buy equipment, increase their harvest and earn more so it creates value for both sides, so I understand it, but cryptos does not create any value, unless your a drug dealer and want to transfer money to your Columbian “bussiness” partners ☻

Anyone had any expirience with this platform?


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