A short review on TFG Crowd
TFG Crowd is one of the newest p2p lending marketplaces from Europe. Registered in Estonia, it has offices in Tallinn, Riga, London and Berlin.
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
- 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
Investing in TFG Crowd projects
There are currently 6 active projects on the platform, with more to come soon. Their activity domain is varied, including real estate, restaurants, cosmetics, pharmaceuticals, logistics.
Another 6 projects have already been funded, with interest rates ranging from 5% to 17%.
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.
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.
TFG Crowd is part of a larger group, with good experience in business financing, and they’re doing the borrower assessments by themselves.
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.
TFG Crowd also invests in the loans it provides on the platform, up to 50% of the entire sum, keeping skin in the game.
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 10% 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.
The projects offered are missing an important feature, a credit rating. Although the platform is in its early stages, and the projects’ interest rates don’t really reflect their risk. Like most new platforms, TFG Crowd is using high returns for their initial projects, even though the risk is not that high, in order to attract as many investors as possible.
Can I join the platform?
In order to join TFG Crowd, you need to be at least 18 years old and have a bank account in the EU. For people living outside of the EU, an account from Revolut or Transferwise should be enough.
It took for me less than an hour from the moment I started to create my account to the moment the funds were added to my account and I could invest in a project.
TFG Crowd doesn’t retain any taxes, so you’ll need to pay those by yourself in your home country.
What happens if TFG Crowd goes bankrupt
According to TFG Crowd, in the unlikely event that they go bankrupt, the investments are secured through our own funds, those of our sister-companies (e.g. The Finance Group Limited), as well as insurance of the projects and pledges on immovable property.
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.
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.
A short review on TFG Crowd - Nerd Factor