If you want to start investing in business loans and make returns up to 12 % p.a. you definitely have to explore investment opportunities offered by the crowdfinancing platform from Austria Zmartup!
Today we will have an interview with Patrick Üllen, MBA, CEO & Founder at Zmartup, and learn more about how Zmartup helps people make money by investing in businesses.
Patrick thank you for joining today, please tell us how Zmartup works and what investment opportunities does platform offers.
There are different types of crowd-/financings on Zmartup. Starting with classic crowdfunding (reward-based) through crowdlending (lending-based) and crowdinvesting (equity-based), to growth financing, mezzanine, and debt financing, and much more. The term starts from 1 year to 5 years and the interest payments are made semi-annually or annually. The repayment takes place in the form of partial repayments or final payment at the end of the term. For the respective options, we refer to our investment cockpit in the respective campaign, where all the exact details such as minimum amount, term, interest (early bird or basic) and interest payment dates, and type of funding are listed. Depending on your interest and willingness to take risks, you can independently select and invest in your campaign or support the startup in order to scale. Zmartup is committed to the motto that every good idea must be feasible. We don't just focus on one industry but offer everyone the opportunity to apply to us. We will then carry out a more detailed check in order to be approved and start. The location is currently DACH but will be expanded to the EU. Since 2021, we have successfully implemented and funded 22 campaigns and have not recorded a single failure to date. We were also able to record 11,441 people on zmartup.com last year, and the average return was around 8% p.a. due to the current market situation.
No doubt Zmartup receives hundreds of loan applications but selects only a few, the best of them, so could you please guide us through the selection process?
In general, for startups and SMBs, we analyze the project with experts in the team and check its feasibility (technically and economically), and the capital must be used for operational business. We also look at the traction, what has happened so far, and how much sales have been generated. Whether there have already been investments, whether subsidies have been received, what the financing structure is like, whether there is already a crowd, and what the prospects are for a successful repayment and thus we minimize the risk for the crowd investors.
How do you make sure that investors provided money is spent on the intended purpose and is well spent?
Broadly, this is a legal requirement that the money must be used for operational business. We also have the balance lists sent to us every quarter and inform the crowd about the milestones and processes that have already been achieved. If transactions are recorded in the financial documents that do not comply with these requirements, we have secured rights where we can take further steps including commercial law measures with authorities and then there is also the liability of the managing director, which can then affect private matters.
How do you protect collateral value during the landing period?
Through the quarterly transmission of financial documents, where we check exactly what the capital was used for and whether the goals can be achieved. We are in contact with rating agencies to determine the current status and liabilities. If findings are obtained that contradict the norms, measures will be taken and initiated.
How do you monitor project progress to make sure that the loan will be repaid on time?
Since we are constantly in contact with the projects and also request the necessary documents for control, and experts can also be called in, this minimizes the risk. In addition, all projects to date have acted conscientiously and no active intervention has ever been required, as our projects all work diligently on their ventures and business success is the top priority for everyone.
If the worst thing happens and the borrower defaults how will you support investors?
Should the event arise that a failure occurs, we will support the investors with all options (including legal ones) that are available to us in order to ensure an orderly process.
Please tell us about Zmartup future development plans.
Zmartup has now developed into the first point of contact for startups in the early phase, we would like to expand this even further and become even more active in Germany and Switzerland, other countries in the EU should follow suit and the ECSP license is then also another topic for us to provide multiple options for investors. In addition, we are now not just a crowdfinancing platform. When listing on Zmartup, we offer access to investors, funding, mezzanine, hubs, networks, partner banks, and much more. Also to enable holistic servicing of the financial structure and business that are in context (marketing, public relations, and technology). According to the motto, “every good business idea must be feasible” and this is all from Zmartup's hand (#bezmart).
Patrick, thank you very much for joining and answering all the questions, I believe after reading this Zmartup existing and new inventors feel safer and more keen to invest.
Dear investors, I hope you now understand better how Zmartup works and how it helps you protect your investments, but remember when investing there are always risks of losing all funds thus you should always conduct your own analysis.
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Have a good day and we wish you successful investing!