You are using an outdated browser. For a faster, safer browsing experience, upgrade for free today.

LEORM, OU (LEORM) is a licensed (License No. FFA000348, issued 2019.09.26. by Financial Intelligence Unit (FIU) of Estonia, for operating as a financial institution) operator of an electronic system (the Platform, available at www.leorm.eu) in relation to crowdfunding, which enables investors to enter into loan agreements with projects’ originators (the Borrowers) - legal entities.

To assist LEORM’s investors in correct investment decision making, LEORM gives its risk estimation on each project placed on the Platform.

Investment Risk Estimation

Risk Level Description
1 Low 1st rank mortgage will be established.
Present Loan to Value (LTV) ratio is less than 0.7.
Additional sureties will be provided by the Borrower (a guarantor / personal surety / additional collateral).
2 Rather low  1st rank mortgage will be established.
Present LTV ratio is more than 0.7.
Additional sureties will be provided by the Borrower (a guarantor / personal surety / additional collateral).
3 Almost low 1st rank mortgage will be established.
Projected LTV ratio is less than 0.7.
Additional sureties will be provided by the Borrower (a guarantor / personal surety / additional collateral).
4 Medium 2nd rank mortgage will be established.
Present LTV ratio is less than 0.7.
Additional sureties will be provided by the Borrower (a guarantor / personal surety / additional collateral).
5 Rather high 2nd rank mortgage will be established.
Present LTV ratio is more than 0.7.
Additional sureties will be provided by the Borrower (a guarantor / personal surety).
6 High 2nd rank mortgage will be established.
Projected LTV ratio is less than 0.7.
Additional sureties will be provided by the Borrower (a guarantor / personal surety).
7 Very high 2nd or 3d mortgage will be established.
Projected LTV ratio is more than 0.7.
Additional surety will be provided (personal surety).

Source: developed by Leorm

LEORM takes investors’ protection very seriously, that is why LEORM provides several tools to make investments as secure as possible for its investors. Each investor should take into account that the risk of losing the funds invested exists. Some risk is normal and should be accepted with all kinds of investing, not only for investing via the Platform.

Read and make sure you understand the risks associated with your investment!

Entering into a loan contract on the Platform, your investment is at risk. Past performance ratios is not a guarantee for future returns. Independent appraisals of any pledge do not guarantee its fast sale for market price. Investment income is an option, and the forecasted returns can change due to various factors. Estimation of a borrower, its project and its financial rating does not exclude its future default.

Risk and how LEORM manages them

Risk Management

YOUR INVESTMENT IS NOT PROTECTED. Your investment is not a deposit and it is not covered by any deposit and investment insurance instrument or state compensation scheme.

COLLATERAL. All projects placed on the Platform are secured with collateral, provided by SPE (Special Purpose Entity), which is LEORM Agentas, UAB, LEORM agent company, registered in Lithuania. The SPE is a holder of all documentation associated with pledging and the representative of investors’ interests in case of borrower’s failure. In some cases, additional surety is provided with a pledge of assets/shares, personal surety, guarantor etc.

LACK OF LIQUIDITY. You investment will be illiquid, once you investment funds are used to enter into loan agreement with a Project’s originator. You cannot get your investment back until the end of the loan term. The Platform does not provide buy-back function. SECONDARY MARKET function provides an opportunity to sell an investment (claim/s) for other Platform’s users before the end of the loan agreement. (The Secondary market does not provide any automatic reconciliation of buyers’ demand and sellers’ supply.) Thus, this function provides the possibility (not obligatory) to make your investment more liquid.
COLLATERAL VALUE DECREASE RISK. Property prices are exposed to cyclic fluctuations as temporary increase or drop in prices due to various factors in national and/or global economics. Thus, different property types may be more or less prone to recession or negative growth. LEORM endeavours to select projects with LTV ratio under 0.7.
BORROWER RISK. Among the risks associated with investing, the highest risk is that of a default of a borrower. There are several factors that may cause the default of a borrower, resulting to payment delays or complete failure to fulfil its obligations to its investors.

DUE DILIGENCE. LEORM conducts due diligence. LEORM closely examines each potential borrower upon certain criteria, namely, financial position,     their credit history, their identity through a process of KYC (Know Your Client), AML (Anti Money Laundering) and fraud checks.

PROJECT STUDY. The entire project study process is performed by at least 3 experts: financial analyst, business analyst, and an outsourced expert of the relevant branch of economics (the branch of the project). Thus, the project study is based on 6C model applied by different banks, which includes studies of Character, Capacity, Cash, Collateral, Conditions, Control. The use of the method can ensure an adequate way to estimate a borrower’s ability to repay a loan, as it includes the qualitative factors, not only quantitative.

INDIVIDUAL WORK WITH EVERY LOAN. LEORM works individually with every loan and each borrower. 3 months (depends on the terms of a loan agreement) before the end of the loan agreement, LEORM checks the current situation and assists in all the cases related to the loan financing (marketing assistance, brokerage service, business analytics to shed light on the problem, if any, could be provided for a borrower to make him settle obligations upon the agreement in time and in full volume.)

PLATFORM INSOLVENCY RISK. Even if LEORM ceases to trade or becomes insolvent, it has for the investors

SEGREGATED ACCOUNT. Investors funds that have been transferred to the Platform, but not been lent to borrowers, are held completely separate from LEORM’s own money on a segregated account. The funds is not a part of LEORM’s assets, which means that they would not be available to creditors in the case of LEORM insolvency. They are not reflected on LEORM’s balance sheet either.

AGENT COMPANY (SPE – Special Purpose Entity), which is LEORM Agentas, UAB (Reg.No.305493692, with its registered address at 22 Vilkpedes Str., Vilnius, Lithuania), will continue managing any collateral held on behalf of LEORM investors, as well as by the third-party administrator appointed by LEORM, OU. The SPE will operate on behalf of investors in relation to any collateral held in respect of a loan in order to recover and repay the funds to the investors.

Attention! No information on project, business or borrower placed on the Platform as a whole or a part of it should be interpreted as an advice or invitation to make an investment.