Our mission is to create the Europe of Savings: allowing European lenders to invest directly in European companies . In this tutorial, we present you the investment rules depending of the country of origin and the size of the projects. 

In order to protect individuals from investing amounts that could jeopardize their economic situation in case of capital loss, the law provides investment limits to be implemented by the crowdlending platforms. The crowdlending regulation differs from one country to the other, which results in different investment limits: 

These projects are usually funded quickly since the amount available to retail lenders is very limited, as the October fund covers 51% or the project. To enable the maximum number of lenders to participate in them and promote diversification, we apply an investment limit of €100 on projects of less than €100,000. For loans above €100,000 the limit is €2,000.

This limit has no impact on the distribution between institutional lenders and individual lenders. Institutional Investors will remain at 51%. The idea is not to increase this share, but to increase the number of private lenders.

Some projects are funded exclusively by retail investors. In that case, 100% of the loan amount needs to be covered by the investments of retail lenders for the company to be financed. Even though these projects are below the €100,000 limit, the fact that retail lenders are the only ones financing the project makes it possible to raise the investment limit to €2.000 on these projects. Why €2.000? To enable lenders to have more flexibility in the amount they want to lent per project. As a reminder, we recommend you to lend to at least 100 projects to have a diversified portfolio. 

A few projects can be denied to some investors for regulatory reasons. Regulation differs from country to country: if a project does not match with the local regulation, it might be denied to the lenders of this country.

The objects of financing eligible to a participatory financing are not the same everywhere. For example, the French law does not allow the French retail lenders to invest in a project whose objective is to refinance another loan or invoices. In that case, the project will be denied to French tax residents but will be available to lenders living in countries where this is possible.

The guarantees requested on a project can also impact your capacity to lend to that project. In Spain, the local law does not allow the Spanish retail lenders to participate in a project guaranteed by a collateral on an asset, including real estate properties or pledge on the shares of the company. Therefore, these projects will not be opened to the retail lenders living in Spain.

Restrictions might also be applied if offering a project to some countries would create administrative complications for lenders or for October.

For regulatory reasons we cannot open German projects to individuals and German tax residents are not allowed to lend on October. This is because BaFin (German Federal Financial Supervisory Authority) requires the use of a fronting bank to allow retail investment in loans. We have studied this possibility, which has been chosen by other platforms, but the additional constraints and costs make this an unacceptable alternative under our business model. German projects will only be funded by our institutional lenders (nor Spanish, Italian, French or Dutch retail lenders will be able to German projects).

We will continue to work hard, with our peers in the European Crowdfunding Network, to allow German lenders on the platform in the future. How? We are confident that regulation, particularly at European level, will evolve to enable you to support the growth of European companies.