The steps to follow for a company to obtain funding through crowdlending

Vicentiu Vlad

September 14, 2023

Image of article The steps to follow for a company to obtain funding through crowdlending

Short Introduction to Crowdfunding: Definition, Types, and Involved Parties

Crowdfunding is an alternative form of financing where a company (project developer) obtains funding from a large number of investors (individuals and legal entities) through a digital platform operated by a crowdfunding service provider. The crowdfunding service provider can offer crowdfunding services only if it holds an authorization issued by the Financial Supervisory Authority.

On the digital platform managed by the provider of crowdfunding services, multiple companies (project developers) can obtain funding from a large number of potential investors. The digital platform connects potential investors with companies seeking funding (project developers). Therefore, crowdfunding is a participatory financing method (as there are a large number of investors providing funding), and it is regulated under the name of participatory financing.

There are two types of crowdfunding:

  • a) Crowdfunding through loans (crowdlending) - in this case, participatory financing is based on lending, with investors providing loans to the project developer.
  • b) Crowdfunding through the acquisition of equity and the use of investment vehicles (crowdequity) - in this case, participatory financing is based on investments in equity or shares, with investors becoming shareholders in investment vehicles.

In crowdfunding, three types of actors are involved:

  • (i) The project developer, who is the company proposing the project for funding on the digital platform.
  • (ii) The crowdfunding service provider, who owns and manages the digital platform where the project proposed for funding is presented. The digital platform connects project developers with investors and facilitates the conclusion of contracts between project developers and investors. Since the crowdfunding service provider owns and manages the digital platform, any reference to the "Platform" in this article will also refer to the crowdfunding service provider.
  • (iii) Investors (individuals and legal entities) who fund the project proposed by the project developer.

Given the experience gained in the authorization process of a crowdlending service provider, this article will focus on crowdlending, through which real estate project developers can obtain funding.

In the case of crowdlending, there is a project developer who proposes the project for funding, investors who fund the proposed project, and the crowdfunding service provider who facilitates the lending contracts between investors (as lenders) and the project developer (as the borrower).

Therefore, investments made by investors through the digital platform will consist of providing loans to real estate project developers (residential, tourist, commercial), with project developers repaying the loans (both principal and interest from the loan contracts concluded between project developers and investors).

Steps for a Company to Obtain Crowdlending Financing

Any company wishing to obtain financing for a real estate project (referred to as the "Project Developer") through crowdfunding via loans (crowdlending) must follow the following steps:

Step 1: The Project Developer must access the digital platform of the crowdlending provider (referred to as the "Platform") and create a user account on the Platform.

Step 2: The Project Developer will receive from the Platform the standardized Key Information Sheet (KIS) for the investment, as well as a list of questions and document requests (referred to as the "Due Diligence List").

Step 3: The Project Developer will input the information related to the real estate project for which they seek funding into the KIS, respond to the questions in the Due Diligence List, and provide the requested documents and information.

Step 4: The Platform will conduct due diligence on the KIS, the Project Developer's responses to the Due Diligence List, the documents, and information provided by the Project Developer. This includes verifying information in the KIS and other relevant details. The Platform will perform a comprehensive review, including but not limited to:

  • Corporate documents of the Project Developer (e.g., registration certificate, commercial register extract, articles of incorporation).
  • Financial information (financial statements).
  • Information and documents regarding the real estate project.
  • Corporate governance structure.
  • Purpose and impact of the funds to be raised in the crowdfunding campaign.
  • Information about the credit risk of the Project Developer.
  • Information about any litigation and enforcement proceedings involving the Project Developer.
  • Any insolvency, dissolution, reorganization, merger, or division requests.
  • Information about other financing obtained by the Project Developer from credit institutions, non-bank financial institutions, investment funds, including venture capital, and any other parties.

The Platform's analysis may also consider various factors related to the real estate project, such as:

  • Liquidity index (assessing the ease of selling the property if necessary).
  • Rental index (assessing the ease of renting the property).
  • Price growth index (potential price increase for a specific type of property in its specific location).
  • Business plan (to determine the feasibility and potential success of the real estate project).
  • Performance history (previous completed projects of the Project Developer to evaluate their experience and competence).
  • Market potential (analyzing the market potential for the real estate project, taking into account current trends and real estate forecasts).
  • Team competency (considering the expertise and cohesion of the project team).

Additionally, the ultimate beneficial owner(s) of the Project Developer and its administrator(s) will undergo a Know Your Customer (KYC) procedure and anti-money laundering (AML) checks against international sanctions lists conducted by an external KYC/AML service provider used by the Platform.

Step 5: Following the due diligence analysis and verifications, the Platform will inform the Project Developer via email whether their real estate project (the Project Developer's crowdfunding offer) has been selected or not to be presented on the Platform by the crowdfunding service provider.

Step 6: If the crowdfunding offer of the Project Developer is selected for presentation on the Platform, the Project Developer will sign a service agreement with the crowdfunding service provider who operates the Platform. The service agreement's purpose is to present the Project Developer's crowdfunding offer on the Platform and facilitate the raising of funds by the Project Developer through loans from investors.

Step 7: After signing the service agreement with the Project Developer, the Platform will publish the Project Developer's crowdfunding offer (including the KIS and any other project-related information that the Project Developer wishes to include on the Platform and that has been verified during the aforementioned due diligence analysis). This marks the start of the fundraising campaign using the Platform to obtain funds from investors in the form of loans.

Step 8: Any individual or legal entity accessing the Platform can view the fundraising campaign, and if they wish to invest in the Project Developer's real estate project, they will need to create a user account on the Platform. Each investor will undergo the KYC/AML procedure conducted by an external service provider (a procedure that takes a few minutes), select the amount they wish to invest by lending it to the Project Developer, review the draft loan agreement, electronically sign the loan agreement, and then the loan agreement will also be signed by the Project Developer.

Step 9: The investor will use the payment services of the payment service provider to which they will be redirected by the Platform to transfer the loaned amount to the Project Developer.

Step 10: After completing the fundraising campaign, the Project Developer can use the funds received from investors and is obligated to repay the borrowed amounts and interest according to the repayment schedule in the loan agreements. In case the Project Developer provides guarantees in the form of real estate mortgages, the Project Developer will sign a mortgage agreement with a mortgage agent (a company acting as a representative for all investors) before a notary public, and subsequently, the Project Developer.


STOCKESTATE CROWDFUNDING SRL is licensed under the number PJR28FSFPR/400002, since 29.08.2023. Find us in the register of crowdfunding service providers of the European Securities and Market Authority (ESMA).


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All investments involve risks, including loss of invested capital, lack of liquidity, and non-reimbursement on loans, partially or integrally. It is an appropriate investment only for investors able to assess and bear the risks presented above. Before investing, please read the risks of investments warning, and also all the clauses of the loan agreement, which will be provided to you for the campaign in question. Platform is not responsible for the information provided by the project developers, even if it is provided by or through does not provide you any other advisory services. The decision to invest is entirely yours. We recommend that you consult specialized advisers if you need support in evaluating your investment decision. The messages and documentation you receive from or project developers have not been verified or approved by Romanian or European authorities.