The purpose of this document is to warn you about the risks involved when lending funds or investing in shares via this website. The list of risks and warnings is non-exhaustive and there may be other matters that you may need to consider, when deciding to use this website and making investment decisions. This document should not be viewed as an investment advice or guidance of any kind. It is written in order to remind and warn you that there are various risks involved, when investing in loans.
The risks involved with investment decisions might affect investment returns and, as there are no guarantees, you might incur losses. You should endeavor to diversify your investments (different regions, industries, asset classes, etc.) and we advise you to seek professional investment advice and also legal and tax advice before investing through this website.
When investing through our platform, please be aware of the following risks:
You may lose your interest payments
The businesses looking to raise funds through TFGCROWD, like any other business, are vulnerable to financial difficulties, which may mean that even though they projected that they would be able to pay interest on the loans, during the term of the loan the situation may change, and they may become unable to make the interest payments that they initially promised or even at all. They may also become unable to repay the loan itself. Because the loans are not secured, insured and are not protected by any governmental authority, if the borrower becomes insolvent, you could lose some or all of your investment.
You need to diversify your investment
When investing your money, it is important to diversify among different types of investment, which carry different degrees of risk, in order to lower the overall risk of your investments. Because the loans that you make through the TFGCROWD platform are to unlisted companies, which may be newly formed start-up companies that may be having difficulties securing loans through other sources (e.g. from banks) to support their operations or to fund a new project etc., you should be aware that your loan will be at risk of losing significant value, as there may not be a long successful history or track record of the company. Therefore, giving through crowdfunding platforms carries high risk.
Your investment is very illiquid
Liquidity is the ease with which you would be able sell your investment to someone else in order to recover it. As there is no secondary market for the loans given out through the TFGCROWD platform and you don’t have the right to assign the loan you have issued to someone else (other than a registered user of the TFGCROWD), you will be unable to recover your investment by selling it off on a secondary market.
You will also not be able to request an early repayment of the loan, if you will need the invested money during the loan term yourself, as there is no such option on the TFGCROWD platform. Therefore, before making any lending decisions, you should assess your future financial needs, as you may not be able to find an immediate buyer for your loan and you will not be able to cancel or ask for an early repayment of the loan.
Please note that political or social circumstances, changes in the legal acts and changes in the situation on the market can bring about negative influences on your investment. The market risk can be reduced but not eliminated by diversifying your investments.
The legislative acts, administrative practice and other factors may contribute to the legal risk. The legislative acts and administrative practice regarding state supervision, assets, ownership, investment activities and taxation may change and influence your investment and the outcome of your investment.
Investing in a foreign country
Please be aware that when investing in a foreign country, you may encounter different and non-familiar economic, political, social and legal environment.