The crowdfunding platform for professionals Mortgage Loans
INDEX Executive Summary 3 The borrowing counter 4 How it works 5 Conditions and costs 6 Interest 7 Refinancing and redemption 8 Guarantees 9 Other features 10 2
Executive summary 1. Loan conditions: Based on Dutch property, Maximum Loan to Value of 75 %, Loan must be business in nature. Property can be either private or business. Income as an assurance to pay interest. 2. Platform You can offer your loan request on our platform with a detailed project description. Lenders will offer an interest rate that you are free to accept or decline. 3. 5-year loans Loans are in principle 5 years, but with an additional 24-month flexibility, so you have sufficient time to refinance after 5 years. 4. Costs Getting a quotation for an interest rate for your project is free of cost. After accepting a loan, several costs apply. 5. Interest You can choose between fixed or floating interest rates. Interest is paid on a monthly base. 6. Redemption You can repay maximum 10% per year of the loan, if and when this suits you. Additional repayments are possible with extra costs. It is possible to borrow again the earlier repaid amount. 7. Privacy At the quotation stage, potential lenders will only see your project in an anonymous form. When the loan is granted, your identity is revealed to the lender. The lender is not allowed to use your personal details for purposes other than those related to the loan. 8. Service Purple24 will help you free of cost with the quotation. 3
The borrowing counter An innovative platform Over the last few years, the rules for lending on properties have changed, and the importance of the risk factor for the financial institutions has been declining. If a potential lender does not fit in the given checklist, the loan application is rejected irrespective of the personal guarantee offered by the borrower. To bring about a change in this system, Purple24 is a platform where low-risk borrowers are able to get a loan if they fulfill basic requirements. On the platform, loans are issued up to 75 % of the value of the property. Since borrowing is done directly from the lender, there is a minimum margin between the interest paid to and the interest received by the lender. Why Purple24 1. As a borrower you use your property as collateral for a loan and with this expand your busniess activities. 2. In case you have existing property that is frozen in your company assets, you can get a loan against it and use that money to expand your work. 3. If your property has a good rental income, getting a loan can help diversify your portfolio and boost your return on equity. 4. Building up a pension through a Purple24 loan is also an option. 4
How it works Procedure to get a loan through Purple24 1. To get a loan on the Purple24 platform, you can provide us the information of your property. For this we have an application form you can fill in, or you we can help you to fill in the form. 2. For the initial market value of your property, you can use your own estimate. 3. You decide if you prefer a fixed interest rate or a floating interest rate, as a mark up of the Purple24 Base Interest rate. 4. Purple24 will make your request anonymous, removing the personal information, but leaving relevant information concerning the loan and the property in the application. 5. This information will be published behind the login for our lenders and the lenders will be informed by email about your process. 6. Purple24 will inform you what interest is offered and possibly what additional conditions apply. Until this step, everything is free of cost. 7. If you agree on the interest and conditions, we will provide all your information to the lender, and the actual loan process starts. Purple24 will verify all the information you have provided in the application form. 8. An official valuator will value the property. 9. This valuation will be the base for the maximum of the loan, which is usually 75% of the estimated free market value. 10. If you agree on the valuation and resulted maximum loan, the final loan agreement will be drafted by Purple24 and signed by both parties. 11. An appointment will be made with the notary, to put the mortgage on the name of Foundation Purple24. 12. The lender will transfer the loan amount before passing the mortgage deed. Additionally passing the mortgage deed, the notary will transfer the loan amount to you. 5
Conditions and costs Eligibility for a loan 1. The loans are issued on the basis of the mortgage on a Dutch property. 2. A maximum of 75% of loan to value of the property for a loan. 3. Loans are issued only for business purpose. 4. An income of the borrower that is substantially higher than the interest payments per month must be available. 5. The borrower is personally liable for the loan in addition to the guarantees. 6. Purple24 makes the final decision to sanction a loan application. Costs 1. Advice from a financial expert: Taking a loan is an important decision. It is strongly advised to seek advice from a qualified mortgage/financial expert. But it is not compulsary. This is at your own cost. 2. Once the agreement is signed, the following costs are applicable, Cost for a certified evaluator for the property, Notary cost for the mortgage deed, 1% of the total loan amount as closing costs 3. Monthly interest payment plus 0.05% commission on the loan amount, to be paid on the 4th of each month for the interest of the month before. 4. In case of late payment, the borrower must pay the following fines: * 14% of all interest payments that are 5 days late. * 1% interest on the fifth of each month on whatever amount is due. 6
Interest Floating or fixed interest Loans on the Purple24 platform are in principle for a period of 5 years. You can choose between a fixed interest and a floating interest rate. A Purple24 floating interest rate is the market rate of Dutch government bonds, which is the base rate and increased with a fixed mark up, as agreed in the loan contract. Base interest rate The historic base rate for Purple24 loans so far: 2nd quarter 2015: 0.014 % 3rd quarter 2015: 0.155 % 4th quarter 2015: 0.069 % Calculation of the base interest rate The average effective interest rate of 5-year Dutch government bonds during the first five trading days of the month before a quarter starts, will be the base rate for the floating rate of the next quarter. The source for this information is the website www.iex.nl. For example: The effective interest rate of 5-year Dutch government bonds during the first 5 trading days of September 2015 was: 1st September: 0.113 % 2nd September: 0.114 % 3rd September: 0.059 % 4th September: 0.035 % 7th September: 0.022 % The average interest rate during those 5 days was 0.069 %. So this is the base rate for floating interest rate loans of Purple24 during the 4th quarter of 2015. Calculation of final interest In case the mark-up of the floating interest is 4.5%, the final rate to be paid to the lender is: 2nd quarter 2015: 0.014% + 4.5% = 4.514% 3rd quarter 2015: 0.155% + 4.5% = 4.655% 4th quarter 2015: 0.069% + 4.5% = 4.569% 7
Refinancing and redemption Safe refinancing Purple24 loans are market based for a loan period of 5 years with an additional 24-month flexibility. Between 4.5 and 5 years, you can refinance without any additional interest charges or penalties. In case you do not succeed in refinancing within 6 months (starting at 4.5 years), you can extend your loans up to 6 years, or even 7 years, with a small additional interest fee. You are free to refinance anywhere else without any additional fines. If you cannot refinance within the period of 30 months, you are in default and Purple24 must take action to call in your guarantees. Purple24 considers refinancing very important. Therefore we provide borrowers various opportunities and sufficient time to do so. Redemption Purple24 offers flexibility for redemption of loans 1. If the property is sold before the maturity date, the loan amount must be redeemed. 2. An optional 10 % redemption annually without any fine (this can be done at any time that is suitable for you as a borrower). 3. Over 10 % redemption per year is also possible with a fine of 1 % in case of a floating interest rate and 5 % in case of a fixed interest rate. 4. Between 4.5 years and 5 years, redemption is possible without any fine. 5. If you want to borrow the amount redeemed earlier, it is possible on the platform as long as there is a lender for the same. 8
Guarantees Guarantees Purple24 requires guarantees from the borrowers against the loan(s): 1. The borrower must have an income that is a multiple of the monthly interest due for the loan amount, 2. The loan amount is a maximum of 75 % of the collateral value to safeguard the fluctuations in the property prices, 3. As a borrower you must provide several (personal) liabilities. In case the ultimate beneficial owner chooses no to be liable, the potential lenders shall be informed of the same. Foundation Purple24 is the guardian of the guarantees and takes care of the payment related matters. All the guarantees / securities are established by a notary registration in the name of Foundation Purple24. The guarantees stay with Foundation Purple24 as long as there are loans related to the mortgage on the platform. The loans can switch hands (fully or partially) and can be done without notary registration. 9
Other features 1. Investment amount Due to restrictions in the Dutch law, the minimum loan amount is 100,000 per loan. It is possible to place multiple properties under a single loan. 2. Interest payment Interest payments are due on the fourth of each month by the borrowers to Foundation Purple24. The Foundation will transfer the proceeds to the rightful parties. 3. Late payment In case of late payment against the monthly interest, the borrower must pay the following extra fines: 14% of all interest payments that are 5 days late. 1% interest on the fifth of each month on whatever amount is due. 4. Base interest rate Every quarter Purple24 determines a new base rate for the floating interest rate. This base rate is published with on the Purple24 website. This base rate is binding for all parties. 5. Dutch law All the loans on the platform are subject to the Dutch law. In case of conflict, the dispute can be presented in the court of The Hague. 10
Other features 6. Claim grounds If a clain ground arises it is possible the borrower has to face foreclosure. In that case the lender will instruct Purple24 to call in the collateral. Purple24 will ask the notary to sell the property to pay off interest and other expenses. 7. Duties as a borrower The borrower has certain duties to towards the lender, and must inform the lender if any of the following situations arise: If there is more than a 90-day delay in the rental income of the property, If there is a vacancy in the rental property for more than 90-days, Circumstances that can decrease the value of the collateral by more than 10%. There is an offering for sale or selling of the property, Any change in the legal status of the borrower, In case there is information from the municipalities or other government agencies that can have a negative influence on the property. 8. Legality The administration of Purple24 is evidence for all parties. 9. Role of Purple24 Purple24 is a neutral platform. For this reason, Purple24 can never take a decision for the lender or the borrower. Purple24 can follow instructions of lender or borrower, and in this way act on behalf of them, if asked to do so. 10. Dutch mortgage Purple24 uses the word mortgage for our security right on the properties. Technically, we should name this hypothec, because there is a difference between the Dutch security rights and common law security rights. In the common law system, a mortgage gives ownership of the collateral. In case there is a default, the holder of this mortgage actually gets the property. In the Dutch security system, the hypothec / mortgage, can only be established by a notary and is recorded in the Dutch central land register. The mortgage gives the right to sell the collateral on a public auction by a notary, in case of a default. The proceeds of this auction will go on first priority to the lender(s), after deducting auction related costs. 11
Attention! No AFM supervision. No license required. No prospectus required. Purple24 LLP & Foundation Purple24 Spaarneplein 2 2515VK Den Haag The Netherlands Tel: 31-70-2060241 Email : info@purple24.com 12