Envestio Review | Are Returns up to 22% sustainable?

envestio-review
Envestio Overall Rating
80%
Diversification
50%
Risk / Returns
100%
Functionality & Usability
70%
Support
100%

How much do you earn on Envestio?

  • Average interest: 12.35%
  • Investment period: 1 year
Invested amount Balance
€100 €118,35
€500 €591,75
€2.000 €2.367
€5.000 €5.917,50
€10.000 €11.835

This is an illustration of possible returns when investing on the mentioned P2P platform. The historical average interest, provided by the platform, is not guaranteed and may vary. The calculated yield does not represent the actual net return of your investment as it does not consider taxes, fees and possible defaults. Be aware that P2P lending is a risky investment that can result in a total loss of your invested amount.

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.

It’s fair to say that Envestio is mainly listing loans with higher interest rates as compared to other platforms such as EstateGuru and Mintos.

In this Envestio review I will be reviewing the following four categories:

  1. Diversification
  2. Ration between Risk and Returns
  3. Usability and Flexibility
  4. Customer Support

 

 

Who is Envestio for?

Do you know the popular TV show Shark Tank or Dragon’s Den, where companies pitch their ideas to wealthy investors?

Have you ever thought about investing in at least one of the pitches? I certainly did.

But I don’t have hundreds of thousands sitting in my bank account.

There is, however, one way to invest even with a little investment amount. Investing on Envestio.

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.

Envestio lists high yield projects up to 22% per year which is the main reason why more than 9.000 investors are investing on Envestio.

Reasons to invest on Envestio:

  • Investing in secured business loans
  • Capital commitment up to 24 months
  • Yield up to 22% p.a.
  • Minimum investment in a loan = €1
  • Minimum funding deposit = €100

Envestio in Numbers

Statistics will always give you an idea about the P2P platform’s performance as well as its growth.

  • Operating since: 2018
  • Investor's earnings: €1.653.416
  • Total loan value: €24.135.683
  • Amount of investors: 9.833
  • Funded loans: 42
  • Average loan period: 10 months
  • Loss of investor's money: €0
  • Testing sice: February 2018
  • My investment on Envestio: > €600

Read the annual financial report

How safe is Envestio?

Every investor's main concern is whether his investment is safe and to what extent. Investing in P2P loans is amongst investors considered to be a high-risk investment.

The only true way to decrease the risk is to diversify your portfolio, which means don’t put all of your cash into one project on one platform.

My P2P portfolio consists at the moment of more than 1.000 investments spread across 4 P2P platforms. Read more about it here.

Envestio is listing mainly secured loans. In the past Envestio was also helping finance subordinated loans which isn’t the case anymore - according to the project that had been listed in the last few months.

The loans are secured by

  • Commercial pledge
  • Mortgage
  • Personal guarantee of the borrower

Envestio claims that in the unlikely event that a loan defaults, investors will receive up to 90% of their investment back.

Here is a short explanation of how it works:

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.

If you have been reading my guide on how to invest in P2P loans, you probably know what the buyback guarantee.

If not, let me refresh your memory.

The buyback guarantee is the promise of the loan originator or the crowdlending platform to buy back your investment.

Peer to peer platforms that offer buyback guarantee usually take a certain percentage of the interest rate and use this to finance defaulted loans. That’s why you will rarely find loans with a buyback guarantee and yields above 12% per year.

Envestio takes a bit of a different approach. The crowdlending platform gives you the choice to use the buyback guarantee if you want to sell your investment before the principal is paid back. If you choose to use this option, you will be charged a penalty, usually around 5% of your investment amount.

My Envestio Review

 

Envestio Diversification

Diversification
50%

Envestio does not offer the best diversification options on the market. This has been the bottleneck of the P2P platform since its inception.

Low on projects: The demand from investors is bigger as the current supply. There are not many new loans listed on the platform.

As soon as a new project gets listed, you must be very quick if you want to get a slice of the pie.

To tackle this issue, Envestio introduced an excellent feature - the Envestio Autoinvest. A function that allows you to automatically invest into projects, based on your predefined preferences. 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.

Envestio acknowledged my concerns and notified me that many borrowers don’t need all the money upfront, which is why they ask for multiple individual loans.

Another reason is that investors like to invest in newly published projects rather than loans that had been listed on the platform for a longer period.

Both arguments make sense, however, this does not help a lot with diversification.

The diversification options on Envestio are unfortunately not as good as on other P2P lending sites that I am currently testing.

Envestio Risk / Returns

Risk / Returns
100%

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 18.55% 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.

Functionality & Usability

Functionality & Usability
70%

Envestio isn’t the most functional Peer-to-Peer lending platform out there. It is in fact very simple to use. In mid-2019 Envestio introduced the autoinvest feature, which helps investing in loans automatically.

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 the 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 Support

Support
100%

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 info@envestio.com. There is also a phone number available +372 6012559 which I haven’t used yet.

My Envestio Portfolio - how much do I invest?

My current investment on Envestio is a bit over €615. More than €200 of my funds are not invested at the moment. I haven’t had the chance to get to invest as the loans get funded immediately.

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.

 

and get 0,5% cashback + €5 sign up bonus

Get started with Envestio

Who is eligible to invest?

Envestio currently offers investment opportunities only from investors from EEA (European Economic Area) with an EU account. Note, that investors outside of the EU must ask Envestio whether they can invest on the platform.

Envestio is mainly listing business loans from Europe. All of the loans are funded in EUR. If you don't have an EUR account yet, you can simply open one with Transferwise, Revolut or N26. It only takes a few minutes.

If an investor adds funds to the Peer-to-Peer platform in a different currency than Euro, it will be exchanged for the bank’s exchange rate.

Read my step by step guide on how to sign up on Envestio

How to invest into business?

Investing on Envestio is easy if there are any available project to invest in. The demand after loans listed on Envestio is among P2P investors very high. In the last few months, most of the projects had been funded within minutes.

You can invest on Envestio manually or use their new feature that allows you to invest automatically - the Envestio Autoinvest.

Compared to the Autoinvest function on EstateGuru, Envestio's version is significantly more user friendly, as you can set up all parameters without any minimum investment amount.

Read my step by step guide on how to invest on Envestio

FAQ about Envestio

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 | Final Thoughts - is it worth investing?

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 are keen to invest on Envestio, you can register through this link and get yourself a €5 bonus as soon as you transfer €100 to your Envestio account.

Additionally, you will get a 0,5% bonus calculated on your investment amount during the period of 270 days. A €10.000 investment will give you a €50 bonus. Learn more about the Envestio Promo Code.

Need help? Comment below

Do you have any questions about my Envestio review or want to share your experience with this crowdlending platform? Use the comment section below to share your thoughts.

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