TFG Crowd is one of the newest p2p business lending platforms from Europe. Registered in Estonia, it has offices in Tallinn, Riga, London and Berlin.

TFG Crowd Highlights:

  • Launched: 2019
  • Headquarters: Estonia
  • Loan types: Business loans, Invoice finance, Mortgage loans, Trade finance
  • Loan terms: up to 2 years
  • Interest rates: 5-17%
  • Fees: no fees
  • Minimum investment: 100 EUR
  • Currency: EUR
  • Secondary market: no
  • Auto-invest: no
  • Buyback guarantee: yes

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How does TFG Crowd work

TFG Crowd acts as an intermediary between businesses looking for finances and investors willing to lend their funds. The company looking for funding contacts TFG Crowd and asks for a loan. TFG Crowd verifies the borrower and checks their financials, business plan and loan securities. If the loan is approved, it gets published on the website and enters the funding stage.

If the loan is not funded in a month, the investors’ funds are returned back to them. If the loan gets funded, the borrower will receive the funds and start paying interest according to the loan agreement. Most of the loans pay interest monthly.

TFG Crowd also invests in the loans it provides on the platform, up to 50% of the entire sum, keeping skin in the game.

The loans available come with different securities: personal guarantees, loan insurance, company pledges.

In addition, TFG Crowd covers all loans with a buyback guarantee policy. If the borrower fails to make their payments in 30 days, TFG Crowd will return to the investors the invested principal and the accrued interest. TFG Crowd can make use of its own funds or its parent company funds (TFG Limited) to cover the buyback guarantee.

A more in-depth look at TFG Crowd

TFG Crowd is the newest offspring of TFG (The Finance Group Limited), which also includes

  • TFG Pay – an alternative banking solution for businesses in the EU that is FCA authorized
  • TFG Logistics – managing logistics all over the world
  • TFG Real Estate – dealing with real estate development and management

While TFG Crowd started its crowdlending operations only in 2019, the TFG group has been involved in business financing since 2015.

Social footprint

Combining the Linkedin company profile and the website’s about us page, I gather this is the TFG Crowd team:

  • Emil Kerimov – CEO, also founder of TFG Limited
  • Natalja Nikitina – Commercial Officer
  • Elans Dimitrijevs – Business Development Partner
  • Valdislavs Ovcarovs – Technology Officer and marketing specialist

They also keep an active presence on Facebook and Instagram.

Regulations and how safe are my investments

TFG Crowd is registered in Estonia, country that doesn’t have specific crowdfunding regulations.

The investors funds are protected by being kept in account separated from the TFG Crowd company assets. In case of bankruptcy, those funds would not be used to pay company debts.

Becoming a TFG Crowd investor

As on most crowdlending platforms, you’ll need to perform these steps in order to become an investor.

1. Create an account

You need to be at least 18 years old and have a bank account in the EEZ (European Economic Zone) in order to open an account with TFG Crowd.

You’ll also need a copy of an ID and a utility bill for proof of address. The process is really smooth and the verification process takes less than a day.

2. Fund your account

You can fund your account through bank transfer. I’ve used my Revolut account to do this, and it usually takes only a few hours for the funds to reach my account.

3. Invest in a project

Take a look at the available projects (there are always a few) and choose the ones you like. Read the project documentation, and if it suits your interests, invest in it. The minimum investment in each project is 100 EUR.

TFG Crowd taxes and fees

Investors don’t have to pay any fees on TFG Crowd. You’ll also need to compute your own taxes and pay them in your country of residence.

TFG Crowd risks

As with many other p2p lending platforms, investing in TFG Crowd projects comes with many risks. Before you start investing in TFG Crowd, you should take these into account.

Platform risks

While TFG was involved in business financing since 2015, the TFG Crowd platform is still very young, as it only started its operations in 2019.

According to TFG Crowd, in the unlikely event that they go bankrupt, the investments are secured through their own funds, those of their sister-companies (e.g. The Finance Group Limited), as well as insurance of the projects and pledges on immovable property.

One other risk involving the platform is due to the website’s security. The website doesn’t use 2-factor authentication, and this makes investors accounts more un-secure.

To mitigate this security risk, there is stuff investors can do as well:

  • Try not to use the same password on 2 different websites
  • Don’t use easy passwords like “123456” or “password”
  • Don’t keep your passwords written on post-its
  • Use a specialized password manager to keep track of your passwords

Regulatory risks

Crowdfunding is a fairly unregulated domain in most of Europe. Any changes could affect existing platforms. This means TFG Crowd might find it hard to comply with the regulation changes and at the worst, they’ll have to suspend their activity.

Market risks

The small and medium enterprises are the first to fall during economic downturns. If the economy hits a rough patch, your p2p lending portfolio will suffer on any platform you’ve invested in.

Performance risks

All projects are secured with a buyback guarantee, and this can become an issue if too many projects default. There’s no information on how many defaults would the buyback fund be able to cover.

Liquidity risks

The platform doesn’t have a secondary market, so, for now, there’s no possibility to exit your investment before the loan term. TFG Crowd does say though they’re currently working on this feature, and it should be available in the near future.

Platform experience

There are currently 2 projects available for investment, with more to come soon. Their activity domain is varied, including real estate, restaurants, cosmetics, pharmaceuticals, logistics.

Another 13 projects have already been funded, with interest rates ranging from 7% to 17%.

tfgcrowd projects

TFG Crowd lets you invest in different types of investments:

  • Business loans
  • Business shares
  • Invoice finance
  • Mortgage loans
  • Trade finance

The current loan sizes range from 15.000 EUR to 400.000 EUR and the minimum investment in a project is 100 EUR.

One annoying thing is that you can only invest multiple of 10 EUR (100, 110, 120…). I currently have 102.68 EUR in my account and I can either invest 100 or 110 EUR.

And the minimum withdrawal amount is 10 EUR, so I’ll have 2.68 EUR just sitting around not doing anything.

Each loan presented on the platform contain details about the company, the use of the funds, market details and loan security. The projects also include a business plan, and sometimes financials, although not all of them are written in English, so they’re a bit hard to digest.

Some of the projects even come with investors perks, like getting a shampoo when investing in the “Laya Cosmetics” project. They’re nice, but that’s not what I’m after for.

My Portfolio

I’ve created my account in June and so far I’ve invested 900 EUR in 8 of the projects published on the platform.

So far, I’ve received 4.26 EUR in interest payments from 2 of the projects I’ve invested in.

Why should I invest in TFG Crowd

All investments come with a buyback guarantee. If the loan payments are late for 30 days, TFG Crowd will buy back the loan from the investors and will pay also the interest accrued.

The buyback is secured through different methods – TFG Crowd’s own funds, those of their sister companies (e.g. The Finance Group) as well as insurance on the projects and pledges on immovable property.

There are no fees for investing in any loans. TFG Crowd takes a fee from the lender, but it doesn’t disclose how much that is.

The investments come with good interest rates. The current active projects have interest rates ranging from 15% to 17%.

While the platform is registered and regulated in Estonia, the projects available on the platform come from all over Europe (the Baltics, Germany, the UK). It’s a good platform to diversify your portfolio.

Why not invest in TFG Crowd

While TFG was involved in business financing since 2015, the TFG Crowd platform is still very young, as it only started its operations in 2019.

Also, the platform doesn’t have a secondary market, so, for now, there’s no possibility to exit your investment before the loan term. They do say though they’re currently working on this feature, and it should be available in the near future.

The platform does offer a buyback guarantee, but it’s not clear how many defaults it could cover or how the platform would perform during an economic downturn. But this is something common to many other Baltics platforms, like Envestio or Kuetzal, so nothing new here.

Summary

I like the fresh look of the platform and the details displayed for each project.

The projects available have good interest rates and they also come with a buyback guarantee.

TFG Crowd is a good alternative to Envestio, Kuetzal, Monethera or Flender.

On the other hand, the platform is still young and I’m still trying to find out how are they expecting to handle defaults, what’s their future plans, do they intend to add at some point a secondary market or not.

For now, I’ll be investing in a couple of projects on the platform, to keep my interest active. And then I’ll see if it’s worth investing more.

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A short review on TFG Crowd
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TFG Crowd is one of the newest p2p business lending platforms from Europe. Registered in Estonia, it has offices in Tallinn, Riga, London and Berlin. TFG C

Editor's Rating:
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