Stage versus tranche — how do we divide projects at Investown?

In order to create really interesting development projects, which our partners want to bring to life in cooperation with Investown, and so that investors get returns on investments as quickly as possible, we divide some projects into so-called “projects”. tranches chi stages.
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What does it mean tranches?

Tranches (from the French tranche, meaning “slice”), in finance, is a debt payment or one of the parts after which the issue is put on the capital market. It can be government or other securities.

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What they mean tranches on Investown:

In the event that the loan applicant (partner) does not have a large enough collateral to borrow from Investown for the entire project at once, we allow him/her to divide the project (construction) into tranches.

Tranches at Investown is the phase of the project, which marks its chronological development. Only after the target amount is reached for the first tranches, is open tranches second, after obtaining the target amount for the second tranches is open tranches third and so on — until the financing of the entire project. Tranches Therefore, they are chronologically related to each other, and each subsequent one is conditioned by the previous one.

They're single tranches we create on the basis of the partner's pledge amount — each tranches corresponds to the amount of his current pledge. What does that mean? If the partner does not have an amount that can stop (secure) the whole project, we will divide the project into several parts for him and lend him only the amount that he can currently secure with a pledge of sufficient value. When he gets the financing for the next mortgage, he will borrow money from us for the next phase of the project - the second tranche. Tranches continue until the investors meet the target amount of the entire project.

For each individual tranche the partner gets lent only such an amount that he is able to secure. As a result, investors' money is always safe.

In practice tranches operate as follows:

Investown will be contacted by a funding applicant who has a project with a total value of CZK 55 million.

As collateral, however, he only has a property with a value of CZK 10 million.

Investown's risk analysts will go through all the documentation for the project. After completing the analysis and evaluating the project as safe, it determines how much we can provide to the applicant in the first phase (due to the pledge of CZK 10 million) and how many phases the project will need to be divided into.

First phase — tranche — we will open on the platform for investors.

Once the target amount for this phase has been selected, we process the interest, start paying the returns to investors and provide the applicant with the first part of the finance.

After we provide the applicant with the first part of the financing (8 million CZK), they start work on the given phase of the project (e.g. the construction of the foundation slab of the house). Upon completion of this phase, his property will be valued at a higher amount and thereby raise finance for the next phase — tranche.

We open another tranche investors.

The project continues gradually until the applicant (partner) receives funding for the entire project.

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What are the benefits of tranches for investors?

The division of projects into tranches is beneficial not only for loan applicants (partners), but also for investors who, thanks to lower target amounts, receive returns on investments above standard quickly.

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What does it mean stage?

Stage (from the French tape) is a tightly circumscribed period, a developmental stage.

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What does it mean stage on Investown:

Stage is a part of the project that does not indicate its chronological development. In other words, individual stages are not ordered sequentially according to the implementation of the project. The whole project, which is divided into stages, it has only one pledge.

They're single stages we do not create on the basis of the partner's pledge amount. The project can be divided into any number of smaller parts according to size — stage. Any project divided into stages as a rule, it has only one pledge (real estate), the total amount of which is always indicated in the project detail together with another list stage. This pledge secures the entire project.

Stage can be on the platform open to investing more at once regardless of ranking. Every single stage after collecting the target amount, we immediately process it and on average within two weeks investors will start to receive returns from it (regardless of whether other stage the required amount is still being collected).

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What are the advantages of stages for investors?

Advantage stage for investors, the target amount of the project is lower, the investment is faster and, consequently, the return is paid out faster.

Due to the division of a large project (e.g. worth 100 million. CZK) for smaller parts, target amounts are collected more quickly, and investors get returns on investments much faster than if they had to reinvest the total amount of the project.

The effectiveness of this method of financing is evidenced by, for example, speed of project financing New sugar factory Cerhenice:

• first stage The new Cerhenice sugar plant project was financed with incredible 50 minutes (on other platforms, target amounts are met within weeks to months).
• The entire project (10 stages) for 63 million CZK was selected for 8 days.