Secured by Collateral
Invest from €1
Table of Content
Envestio is a small crowdlending platform that helps to connect businesses that seek a capital investment with small investors like you and me.
In this Envestio review, I will be sharing my own experiences with the platform.
I joined Envestio in July 2018 which gave me a good amount of time to get familiar with the platform and test their features. The initial reason why I joined this platform was the high yields up to 22% per year which is very attractive.
Who else gives you the opportunity to earn 22% p.a. on interest, unless you are speculating on the stock market?
Envestio offers financing to companies and entrepreneurs mainly from the energy sector, crypto mining and real estate business.
Envestio is for anyone who wants to invest into potentially profitable business projects but doesn’t want to take high risks and invest huge amounts of capital. In order to sign up on Envestio you need to be over 18 years old and reside in Europe. Unfortunately Envestio does not allow investors from the U.S. to invest at the moment.
Envestio accepts payments from European bank accounts. I personally use my N26 card to send money to my Envestio account, you can, however, also use other alternatives such as Revolut or TransferWise.
You can start investing on Envestio with as little as €1 per project. The minimum deposit is, however, set at €100. Your investment is secured by a collateral, which is in most cases business collateral, land or mortgage. Most of the projects are also secured by the personal guarantee of the business owner (borrower). If you decide to withdraw your investments you can use the buyback guarantee in exchange for a 5% fee. The average capital commitment on Envestio is around 12 months, which is also the case on EstateGuru.
Is investing on Envestio safe?
No P2P lending platform can guarantee 100% risk free investments as mentioned in my extensive article about the risks and securities within the P2P lending sector.
Your investment on Envestio is secured by a commercial pledge, mortgage or personal guarantee. In case the borrower goes out of business and cannot repay the loan the following applies:
Investor invested €1000 in one project, which is now overdue. If the borrower fails to repay the debt within five days after the end of the loan period, an Estonian debt collector agency will take over the case and the investors will receive 80% of their investment (in this case €800) back to their investment account. For the remaining 20% the investor has a choice to make: Either get 10% back instantly or wait until the debt is recovered from the borrower. This leads to the conclusion that 90% of the investment is fully secured. You can find more information about this process on the Envestio Blog.
When reviewing P2P platforms you should always have a look at the platform’s statistics. Statistics will give you an idea about the P2P platform’s performance as well as its growth.
|Investor’s earnings:||+ €1.6 M|
|Total loan value:||+ €30 M|
|Amount of investors:||+12.000|
Envestio’s investors base is growing rapidly in the last few months, particularly due to the high interest loans. This has caused temporary cash drag for a few weeks (uninvested capital).
For more details and financial KPIs, refer to the Envestio’s annual financial report.
Automated investments with Auto Invest
Easy Sign-Up and fast money transfer
Sign up Cashback 0.5% + €5 bonus
5% fee for early withdrawals
Not suitable for short-term investments
Not so many diversification options
Higher chance of cash drag
Envestio does not offer the best diversification options on the market. This has been the bottleneck of the P2P platform since its inception.
Envestio struggled to find enough suitable loans to meet investor’s demand.
Just a few months ago Envestio launched their Auto Invest. A function that allows you to automatically invest into projects, based on your predefined preferences. This has been a good improvement to the overall experience of the platform. Find out more about how to set it up here.
Stage Loans: Another important point that should be mentioned is the financing of loans in stages. This is quite a similar approach as Envestio’s counterpart EstateGuru.The problem I see from an investor’s perspective is that financing multiple projects (one loan split in several stages) from one borrower is not going to lower my risk.
The diversification options on Envestio are unfortunately not as good as on other P2P lending sites that I am currently testing.
Envestio offers you the following diversification options at the moment:
Minimum Investment: €1 (min. deposit €100)
6 Countries: Estonia, Latvia, Lithuania, Spain, Finland, Portugal
Loan Period: 1 – 18 months (most of the loans have a loan period of 12 – 24 months)
Surety: personal surety, first rank mortgage, second rank mortgage
Loan period: from 1 to 80 months
Buyback Guarantee: Yes (5% fee)
Auto Invest: Yes
Envestio Risk & Returns
My average interest per year is 19.54% which is the highest yield I receive from any P2P platform.
The historic average interest rate from all investors combined is around 18.50% which is for a crowdlending platform that lists secured loans very decent in my opinion.
The unique benefit of Envestio is that investors have the option to invest into loans with high yields, secured by real value (in most cases property).
This is supported with the Envestio Buyback Guarantee which can be used to sell off your investment for a fee of 5%. The buyback guarantee can therefore be used as a secondary market that allows you to access your money before the end of the loan period.
Until now Envestio hasn’t lost any of investor’s money. The mixture of the above mentioned benefits is also the reason why Envestio become such a popular P2P lending platform.
Envestio isn’t the most functional Peer-to-Peer lending platform out there. It is in fact very simple to use.
The core features are the Buyback Guarantee and the Auto Invest.
In terms of other functions. Envestio allows you to create an income statement that you can use to report your income from capital gains and pay your income tax.
There is also an overview of your current investments, where you can track their performance.
If you are looking for advanced functions and statistics you won’t be too happy with Envestio.
The platform is made so even investors without any experience in P2P lending can create their own portfolio.
Envestio’s interface is quite intuitive if you are already familiar with other P2P lending sites. The platform is fairly simple to use and it does not include any complex features.
Envestio support is surprisingly fast. All my questions had been answered within less than 24 hours.
I suggest using the chat function on their website to reach customer support.
You can also send them an email with your questions to firstname.lastname@example.org. There is also a phone number available +372 6012559 which I haven’t used yet.
My portfolio on Envestio
My current investment on Envestio is a bit over €1.100. More than €300 of my funds are not invested at the moment.
Envestio isn’t listing new investment projects that regularly, which leads to uninvested capital on my Envestio account. If Envestio keeps up with their promise and will list bigger projects with higher loan volumes I am happy to increase my investment.
My strategy on Envestio is to invest max. €100 in one project (no tiers). That way I can somehow diversify my capital. Although this isn’t perfect and some of the capital might not get invested, I prefer this approach over the strategy to invest everything into a handful of projects.
If there is too much-uninvested capital on one platform I shift it elsewhere, where I can get some returns for it. Learn how to avoid cash-drag here.
Who can invest on Envestio?
EU/EEA residents may use Envestio's services. Investors from other countries should contact Envestio by email with individual requests, and Envestio's legal department will make a decision about whether they may onboard that person. It is very recommended to have/use EU bank accounts since Envestio provides free outgoing SEPA payments only. Payments to other regions can be at extra cost.
What is the default rate of the loans listed on Envestio?
Currently, Envestio has a 0% default rate.
What is the average portfolio size on Envestio?
Average portfolio size is about €3.500.
What are the KPIs Envestio is looking at when evaluating the borrower?
Envestio uses a flexible approach for the evaluation of the potential borrower, including the overall business structure, experience, and background of the owner of the investment project and availability of strong personal guarantees. It is also considered as common that during a certain period of time the interest is paid using the income from another business of the investment project owner. That is one of the reasons why offered interest rates at the platform are as high as they are now.
Envestio Review Summary
As until now, I would rate my experience with Envestio rather positive. Many investors have a similar positive experience which you can read on websites such as Trustpilot or Reddit.
I haven’t had any default loans and the repayment schedule for the active projects always worked fine.
The lack of diversification options is, however, an issue. I would not advise to put all your eggs into one basket but rather approach it with care and diversify across multiple projects and multiple P2P platforms.
I believe that Envestio is aware of this fact and that they are working on introducing more loans with higher loan volumes which will make it easier for you to diversify your investment.
The real unique selling point of Envestio are the secured business loans with a buyback option and high returns.
I can certainly see the potential of the platform as soon as they increase the number of available projects. Until then I would not consider Envestio as my primary P2P lending platform but rather an alternative option that will help to lower the platform risk.
I believe it is good strategy to be active on a platform where you don’t invest in payday loans only but also support businesses that create new jobs and bring some value. If you have the same opinion, join Envestio yourself and let your money work for you.
All new investors, who sign up with my Envestio Promo Code will receive a sign up bonus of €5 as well as a cashback bonus of 0.5% from their average portfolio size.