The crowdfunding platforms raised nearly 402 million euros. 402 million, according to KPMG’s annual barometer and that of the FPF, Financement Participatif France. This represents an increase of nearly 20% compared to 2017.
In the context of his interior design practice, the decorator Laurent Hosana is particularly sensitive to these new forms of financing, especially real estate financing. Indeed, as an architect, the Frenchman has been involved in many architectural projects financed using this type of system. Let us discover with him the main characteristics of participatory financing, and more precisely, real estate crowdfunding.
Participatory financing has become a common practice.
1.5 million people financed 33,381 projects in 2018 compared to 24,126 in 2017.
Lending operations are in first place with an inflow of 273 million euros, which represents a 40% increase compared to 2017. Donation sites, for their part, experienced a 2% decline for a total amount of 81.5 million euros.
There are several forms of financing, donation with reward, donation without reward, capital investment, investment in royalties, non-interest-bearing loan, interest-bearing loan, loan in the form of bonds and loan in the form of mini-bonds.
At the regional level, the Ile de France region has the highest number of crowdfunding operations, followed by the Rhône Alpes region and Occitanie.
There is a wide variety of platforms, most of which are generalist but some have specialised in financing in agriculture, real estate or sustainable development.
Real estate crowdfunding
Real estate accounts for 40% of the funds raised on participatory financing platforms.
Laurent Hosana indicates that this financing method allows individuals but also professionals to invest collectively in different real estate projects.
As an interior architect, Laurent Hosana is occasionally involved in the development of spaces in different real estate projects. This enables property developers to make their properties even more attractive and to offer a “turnkey” solution by including both the property itself and all the movable elements present in a dwelling. The notion of real estate crowdfunding is therefore familiar to Laurent Hosana because he was able to participate in this type of project.
In reality, real estate crowdfunding is similar to crowdlending. The people who finance the project must subscribe to a bond issued by the property developer’s parent company or by a project company.
What is interesting is that the contractual rate of return is set at the beginning of the project.
What attracts real estate developers is the possibility of increasing their equity and having a margin for negotiating their lines of credit with their banking institutions.
For individuals, crowdfunding allows them to participate in the financing of a project or to finance a developer’s project. The rate of return is particularly profitable as it amounts to 10%. The sums invested are recovered once the project is completed and marketed.
Once again, Laurent Hosana can intervene in this context in order to ensure a certain, and often higher, remuneration for many individuals wishing to invest in this type of real estate project. Indeed, by enhancing the value of the property with the interior design offering equipment for the kitchen, the bathroom or the terrace, buyers tend to project themselves more into the property and thus make a purchase proposal very quickly.
This segment collected almost 185 million euros in 2018, which represents an 83% increase compared to 2017 according to the barometer figures of Fundimmo and Hellocrowdfunding. 343 projects were supported in 2018 compared to 220 in 2017. The average amount collected was 539,000 euros, which represents an increase of 18%.
For his part, Laurent Hosana plans to take part in more and more crowdfunding projects, given that this is an area that is currently experiencing a real boom, which could enable him to put his talents as an interior designer to good use in various projects.
