Investor Risk Statement

Max Crowdfund B.V. (“MCF” or “we”) operates a system in relation to lending (the “Online Platform“), which enables investors to enter into peer-to-peer (P2P) loans with fundraisers.

If you enter into a loan contract on our Online Platform, your capital is at risk. Although we take steps to mitigate that risk on behalf of our investors by establishing collateral on every loan, you still may not get all, or any, of the money you have invested back. Each loan contract is entered into between each investor and fundraiser and MCF will act as an intermediary on behalf of the lenders in relation to the relevant loan contract.

While there are a number of risks associated with investing, we believe your biggest risk is the borrower’s ability to make their loan repayments. Our fundraiser screening and project assessment are the keys to our approach to protecting your investment against market risk.

When you invest via the Online Platform, your money is lent to carefully selected borrowers seeking property-backed finance. However, please read and make sure you understand the associated risks with your investment, detailed below.

Risks associated with your investment

Your money is at risk

Your money invested is at risk and you may not receive all (or any) of your investment back. The ability to recoup all the capital and interest on these loans is determined by the ability and/or willingness of the borrower to repay the loan as well as the underlying value of the asset which could be affected by a material downturn in the property market. As such, we cannot guarantee that you will get your capital back or receive your interest. While the loans are secured by the assets of the borrower and optional additional security established, this does not guarantee full repayment of your loan and interest payment as per the loan contract.

Your investment is not protected

It is important to know that your investment is not covered by any government or otherwise backed investment compensation scheme.

Property market fluctuations

The property market is cyclical and values may go up or down depending on political, economic, and social circumstances to name a few. Historic performance of the property market or a particular property is never a reliable guide to future performance. A future downturn in the real estate market could severely adversely affect the ability of a borrower to repay the loan you make on the Online Platform as well as reduce the value of the collateral established.

Illiquidity

Loans made through the Online Platform are an investment. Your investment will be illiquid, meaning that once you invested funds it is not possible to exit your investment and get your money back.

No advice

MCF and its affiliates do not provide any advice or recommendation in relation to any investments made available on the Online Platform.

Tax is your responsibility

You should be aware of any tax obligations that might apply to you as a result of any interest received on loans entered into on the Online Platform. Whether and how any relevant tax obligation applies depends on your individual circumstances. MCF does not report to Tax Authorities. Taxes are your responsibility.

How does Max Crowdfund help to manage these risks?

  • The Max Crowdfund Security Agent ("MCSA") will pursue any missed payments or defaults on your behalf. The MCSA will pursue any missed payments and hold any relevant collateral on your behalf. If necessary, the MCSA, will enforce the collateral and try to recover all the fundraiser owes. If a loan goes into default you will be informed and provided with regular updates. You may be invited to an online voting on proposed measures or restructuring of the loan. Please note that even if the MCSA  enforces collateral on your behalf, this does not guarantee you will get your money back.
  • We conduct thorough due diligence

We carefully examine three important criteria:

The fundraiser: we conduct an in-depth analysis of each borrower’s financial position, assessing their credit history and undertaking comprehensive identity, AML, and fraud checks; and

The investment plan: we conduct a thorough analysis of the investment plan for which the loan is intended; and

The asset: we conduct thorough due diligence on the underlying assets – including an independent professional valuation for each asset we take as collateral; and

The exit: we assess each borrower’s ability to pay back the loan.

We only list ‘secured’ loans

All loans are secured by physical assets at a maximum Loan to Value ("LTV") ratio of 90%. A personal or business guarantee is required as additional security for at least the difference between the loan amount and the execution value of the assets.

We keep your money separate from ours

The money in your account is kept in a segregated bank account held by Max Crowdfund Escrow Foundation ("MCEF"). In the unlikely event of our insolvency or bankruptcy, your money is safe. A contingency plan is in place for a third-party administrator to take over loan administration and payments processing, should it become necessary for any reason.

Automatic transfer after 60 days

Funds that are kept in your account, which are not invested or withdrawn for 60 calendar days, are automatically transferred to the preferred bank account registered on your account on the Online Platform.

The MCSA  will hold collateral on your behalf

Should MCF cease to trade, any collateral established on your behalf would continue to be managed by the MCSA and the appointed third‐party administrator. All loan contracts will continue directly between the borrower and the lender(s) (investor(s)), the collateral continues to be held by the MCSA and the MCSA will continue to enforce any collateral on behalf of investors.

We provide you with clear and transparent information

We ensure all available and relevant information is honestly and clearly presented on our Online Platform, in order to allow you to come to a balanced investment decision. Via your personal "My Account" section we provide you with information, statistics, monthly statements, and status updates on your portfolio and account balance. We also provide you with a yearly statement, which you can use for your tax return as applicable.

What can or should you do to reduce your personal risk?

  • You should never invest more than you are willing or can afford to lose.
  • Any loans entered into via the Online Platform should only be made as part of a diversified investment portfolio that includes a mix of illiquid and liquid assets. Spreading your investments across multiple loans will help reduce your risk. The majority of your investments should consist of liquid asset classes, in order to easily access your capital when needed.
  • Read all information presented on any investment opportunity and make sure you understand all the risks, before deciding to invest. We offer a 24 hours cooling-off period during which you have the right to change or cancel your investment without any penalty or costs.
  • If you require any financial advice, you should seek advice or recommendations that match your personal situation from a professional financial adviser.
  • Please consult with an appropriately qualified tax professional regarding your individual tax position, which depends on your personal situation and may be subject to change in the future.