Mutual real estate company Finnoonportti has decided to set a new minimum target for its crowdfunding round.
The target is now 500 000 euro, out of which 371 569 euros has this far been crowdfunded.
If the new minimum target is reached, the demand for funding is compensated by a short term loan. This loan will not be secured.
“We knew well that the 1M€ target is ambitious for crowdfunding in Finland. When now looking at the big picture, it’s reasonable to make sure that we get the crowdfunded funds to our use according to the original timetable, even though the amount was less than budgeted in the first place”, Raimo Jokinen from Kiinteistö Oy Finnoonportti states.
The crowdfunded capital and the short term loan are used to begin with the construction phase. These streams of capital and the equity from the estate sales will get the construction to a stage that fulfills the requirements set by a bank for a long term bank loan. This capital will be sufficient to finish the construction phase.
The short term loan that will be now taken on the side of crowdfunding will increase the overall financing costs. The increase in expenses equates with the price of approx. 30 square meters of sold premises, while Finnoonportti has 4349 square meters of premises in total.
The new funding arrangement does not affect the collateral obtained for crowdfunder’s. The mortgage right (inc. e.g. the lot and the Finnoonportti property) for crowdfunders worth 3,2 M€ has a secondary position to the one set for the bank loan.
According to the original loan terms, the changes done to Loan Capital require acceptance from all individuals who have already invested in Finnoonportti Loan. This acceptance is received to this date.
With the new minimum target of 0,5€M, Finnoonportti still holds its position as the biggest crowdfunding round in the Finnish real estate sector.