What measures does bettervest take to ensure the projects pay off?
The project owner’s solvency is checked by the credit referencing agency Creditreform in order to estimate the risk of insolvency. Additionally, the energy saving potential is examined by an external energy consultant. Calculations made by the project owner are thus balanced out by the figures the energy consultant produces. To ensure investment security and sustainability we specifically support those technologies that are environmentally-friendly and have neither a long implementation nor payback time.
The investors themselves can also decrease the risk by “hedging” their investments, in other words, the investment can be split up and allocated to several different projects. This way, the individual risk is reduced.
What is the legal basis of my investment?
Due to the current legal situation concerning crowdfunding and at the advice of our lawyers, we have opted for annuity loans with subordination. The advantage of an annuity loan is that investors receive a partial repayment plus interest annually. This means that the amount of possible loss decreases with each passing year.
What happens if the project owner goes bankrupt?
In the event that a project owner becomes insolvent, you will only receive your money after all other higher-rank creditors. This means, an insolvency could potentially lead to a total loss of your investment. We therefore advise you to spread your investment across several projects, so as to reduce your risk exposure. In fact, it is common practice throughout the crowdfunding market to diversify your investment portfolio.
As a prerequisite for cooperation, we require an official evaluation of the potential project owner by a credit reference agency to determine the credit risk. This is indicated on each project page. For further information, please refer to the detailed risk declaration document.
What happens if bettervest goes out of business?
bettervest does not receive the collected investments, instead the funds are transferred directly to an independent escrow account with the project owner listed as beneficiary. bettervest only serves as an intermediary connecting project owners to investors. Before investing via our platform, each investor signs a subordinated loan contract with the project owner. Even if bettervest were to go out of business, the project owner will still have to adhere to the payment obligations stated in the contract. As the financial risks are borne by the investor, bettervest is not at risk if a particular project owner defaults on the loan. The projects are not financially linked – if one project fails the others are not affect (except in the case where multiple projects belong to the same project owner).
Are follow-up investments necessary?
Energy or resource efficiency projects require a one-time investment. The implemented measures then lead to long-term savings without any additional investment. Furthermore, since energy prices tend to constantly increase, the savings achieved by the technological retrofitting also increase. The maintenance costs usually decrease with newer technology. However, these costs are included in the calculation of profitability. The projects listed on bettervest usually do not require further investments. For you as investor there is no obligation to make additional capital contributions.