Warning ! This platform is currently in my blacklist
After both Kuetzal and Envestio proved to be scams, I became much more cautious and decided blacklist several platforms; TFGcrowd is one of them.
Initially, as this platform received much less bad press than Wisefund or Monethera, I was giving it the benefit of the doubt. Unfortunately, a recent article by Kristaps Mors regarding his investigations on TFGcrowd projects made me reconsider my decision. Indeed, it looks like most companies financed through TFGcrowd are owned (or closely connected) by TFGcrowd itself !
More details regarding blacklisted platforms can be found on my article about the consequences of Kuetzal’s and Envestio’s downfall.
TFGcrowd allows investors to lend money to businesses; interest rates for these loans vary from 8% to 17%. Many of them are protected by a buyback guarantee.
My opinion on TFGcrowd
The great interest rates and solid buyback guarantee on many loans make TFGcrowd a great choice to diversify a speculative loans portfolio. However, as the platform doesn’t have much track record yet, I encourage investors to be patient and grow their portfolio slowly.
TFGcrowd’s pros & cons
- A large variety of loans
- Financed business located throughout Europe
- A solid buyback guarantee is provided
- Minimal investment per project is € 100
Overview of TFGcrowd’s loans
In term of interest rates, the loans at TFGcrowd are rather competitive; interest rates can be as high as 17%, which is very high given most loans come with a buyback guarantee.
One very appreciable aspect of TFGcrowd’s projects is that they’re very diversified, both geographically and in term of industries. Indeed, financed firms are located in UK, Germany, Latvia. Apart from the usual real-estate developments, funded businesses include :
- a food delivery company
- a nutritional supplements manufacturer
- an indoor karting race track
- a logistics company
- a SPA & beauty salon
- several restaurants
- a Co-working space
- a coffee company
- a playground for kids
A slight drawback is that several loans are granted to the same borrower (the Schaeffer Nutraceutical). Investors are advised to check the description carefully so that they don’t put all their eggs in the same basket !
Most loans reimburse interests monthly, which is great for investors looking for a regular cash-flow.
In September 2019, TFGcrowd announced that the interests computation would henceforth start the day investments are made (and not only once the project is totally funded). It’s a welcome change, as several competitors such as Crowdestor already computed interests this way.
The minimal investment amount is € 100, which is rather high. This large threshold makes it make it hard to diversify a small portfolio. In addition, the invested sum has to be a multiple of € 10, which makes it hard to re-invest interests.
There are several new investment opportunities every month. The financed amounts vary greatly, from as little as € 20,000 to as much as € 400,000. The real-estate projects are rather large, and thus require a long time to be funded. Until now, around 20 projects got successfully funded.
In summer 2019, TFGcrowd announced the creation of a buyback fund. It’s very similar to Crowdestor‘s warranty fund : the initial amount is € 100,000, and it will grow through a commission on new loans. It will cover both principal and accrued interests if a repayment is delayed by more than 60 days.
In early January 2020, the amount held in the fund was slightly below € 135,000.
Compared to the previous situation, I appreciate the fact that there’s an actual cash amount for the buyback guarantee. On the other hand, I regret that there will still be projects excluded from this guarantee; also, the delay was expanded from 30 days to 60 days.
For loans that don’t come with such a guarantee, the presence of a collateral increase the investment’s safety; however, recovery delays may be long.
As of December 2019, three projects were repaid in full. From what I gathered, there’s been no repayment delay or defaulted loan.
There’s unfortunately no secondary market at TFGcrowd; it also isn’t possible to resell loans to the platform. This lack of early exit is the platform’s main weakness.
Manual investing at TFGcrowd
As only a few projects are simultaneously available, manual investing is comfortable.
The project are described in great details; although they lack a risk rating like CrowdEstate provides, I find the descriptions very complete and they make for a pleasant read.
Initially, although future projects were displayed, it was not possible to know when they would be available. However, in October 2019, a countdown has been added, allowing investors to fund their account on time.
New projects are usually announced by e-mail, as well as on the platform’s Facebook page.
Currently, TFGcrowd doesn’t allow automatic investing; it has to be done manually.
Website’s ease of use
TFGcrowd’s registration process
While registering was as often quick and easy, the KYC (Know Your Customer) procedure gave me some trouble. Indeed, the website kept rejecting the scan of my passport (the same I use for all crowdlending websites). I ended up contacting the support and they validated it manually; it didn’t take long for them to notify me, and their reply was professional.
Account funding and funds withdrawal
Currently, the only way to fund your TFGcrowd account is via a SEPA transfer. After I wired my initial amount, it appeared on my account after 2 days, which is a standard delay.
As one reader pointed out, the minimum amount for withdrawals is € 50, which will be inconvenient for investors with a small portfolio who want to be able to withdraw interests monthly.
Website’s design and ergonomics
I find the design of TFGcrowd‘s website rather clean and it’s straightforward to use.
Among the possible improvements, it would be great to have a buyback icon for relevant projects in the projects list.
Available languages & translations quality
The website is only provided in English, and I couldn’t find any typo or awkward phrasing.
There is unfortunately very little reporting available, apart from the transactions list and the projects portfolio. However, I appreciate the fact that the platform added the reimbursement schedule for each investment, which was initially missing.
The FAQ is small and rather concise but useful. In addition, there’s also an overview of the investment process.
It’s possible to get in touch with the TFGcrowd by e-mail, as I did when I had troubles registering.
I contacted them again later with a question regarding the reimbursement schedule (which at that point wasn’t visible on the website yet). Once more, their reply was quick and to the point; after my bad experience with Grupeer‘s support, it’s nice to see that other platforms do care about their customers’ inquiries and feedback !
Communication from the platform
For now, the only notifications I received were when new investment opportunities became available. I regret that the platform doesn’t sent a message when funds reach my account, or when interests are paid.
Actual performance of my TFGcrowd portfolio
At the end of April 2020, the XIRR for my TFGcrowd portfolio was 18,65%.
As I'm still building up this portfolio, the performance is lowered by the fact that I wire a large amount ahead of time. I thus have idle funds until there are enough projects to meet my target size; in a few months, the performance should reach its target of 17%.
Don't hesitate to read my most recent crowdlending portfolio review for detailed platforms performance comparison as well as historical performance.
Portfolio creation date
I created my TFGcrowd portfolio in June 2019.
TFGcrowd's main competitors
For a detailed comparison of the different real-estate and business crowdlending platforms, check out this article.
TFGcrowd's facts & figures
As of January 2020
Who can invest at TFGcrowd
Anyone who is at least 18 years old and has a bank account in one of the European Union States or EEZ banks.
Please note that this review may contain affiliate links. It means that I will earn a commission if you decide to invest after clicking through the link – at no additional cost to you, of course -. Please understand that I have experienced all of these companies, and I recommend them because they are helpful and useful, not because of the commissions I make if you decide to invest through my links.