What opportunities do Real Estate Crowdfunding platforms offer to entrepreneurs searching for corporate loans in Finland and Estonia?
Wuorimaa, Olavi (2020)
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020121027421
https://urn.fi/URN:NBN:fi:amk-2020121027421
Tiivistelmä
Crowdfunding is one of the most recent phenomena that the internet and digitalisation has created in the Finance sector. As the world is quickly changing and moving “online”, crowd-funding offers financing opportunities to projects, start-ups and well-established businesses in a time when bank regulation, due to the last financial crisis, is making it harder for SME’s to receive financing from traditional avenues. This is especially true in the real estate sec-tor, as construction is very capital intensive as an industry and revenue is often received only at the very end of the project when the buildings are ready and sold.
This thesis focuses on studying the Real Estate Crowdfunding industry in Finland and Es-tonia from the point of view of the entrepreneur, bringing light to what alternative options are available in addition to traditional avenues of financing. This is done by researching the larg-est Real Estate Crowdfunding platforms in both countries and studying individual projects that have been successfully financed. For this reason, the Crowdfunding platforms included in this study are Groundfunding, Realinvest, Estateguru and Crowdestate.
The thesis aims to give an overview of the different types of financing and terms that the current Real Estate Crowdfunding offers, as very little industry wide statistics or information is available. The research was conducted during 2020 by studying 4-6 successful projects per platform (a total of 21 different projects) which were chosen based on criteria such as interest rate, length, loan type and collateral type. As the aim of the thesis is to give an overview of the variety of options the platforms offer to entrepreneurs, the projects were chosen on the basis of what additional information they offer.
The findings of the thesis show that there is a variety of financing opportunities available for companies operating in the real estate industry. Companies have been able to attract fi-nancing from the investor crowd for projects ranging from 20 000 € - 1 650 000 € with inter-est rates varying from 5,25 % to 18%. In addition, there are variable options in terms of capital types and collaterals that can be utilized, which shows that as an industry the Real Estate Crowdfunding platforms offer a viable financing option when planning future projects. Even though each platform offers a lot of information regarding the projects, it is important to note that as this is a relatively new phenomena, finding information on the industry as a whole can still be arduous and time consuming and further research is needed.
This thesis focuses on studying the Real Estate Crowdfunding industry in Finland and Es-tonia from the point of view of the entrepreneur, bringing light to what alternative options are available in addition to traditional avenues of financing. This is done by researching the larg-est Real Estate Crowdfunding platforms in both countries and studying individual projects that have been successfully financed. For this reason, the Crowdfunding platforms included in this study are Groundfunding, Realinvest, Estateguru and Crowdestate.
The thesis aims to give an overview of the different types of financing and terms that the current Real Estate Crowdfunding offers, as very little industry wide statistics or information is available. The research was conducted during 2020 by studying 4-6 successful projects per platform (a total of 21 different projects) which were chosen based on criteria such as interest rate, length, loan type and collateral type. As the aim of the thesis is to give an overview of the variety of options the platforms offer to entrepreneurs, the projects were chosen on the basis of what additional information they offer.
The findings of the thesis show that there is a variety of financing opportunities available for companies operating in the real estate industry. Companies have been able to attract fi-nancing from the investor crowd for projects ranging from 20 000 € - 1 650 000 € with inter-est rates varying from 5,25 % to 18%. In addition, there are variable options in terms of capital types and collaterals that can be utilized, which shows that as an industry the Real Estate Crowdfunding platforms offer a viable financing option when planning future projects. Even though each platform offers a lot of information regarding the projects, it is important to note that as this is a relatively new phenomena, finding information on the industry as a whole can still be arduous and time consuming and further research is needed.