Frequently asked questions
What is participation?
- Participation is a contractual relationship between RONDA INVEST a.s. and the Investor (Participant),
which establishes to the Investor (Participant) the right to pay part of the principal and part of the interest income from credit receivables in which the Investor (Participant) has invested in its sole discretion.
- The Investor (Participant) acquires the possibility to invest in proven credit receivables in the form of participations
with high creditworthy collateral and an interesting yield.m.
- The Investor (Participant) is not entitled to transfer the Participation to third parties, to establish the rights of third parties to them, to rent them out or to dispose of them in any way.
Participation can only be purchased through RONDA INVEST a.s
- RONDA INVEST a.s. recommends acquiring Participations on portfolio principle in order to reduce risk
- Participation is a contractual relationship between RONDA INVEST a.s. and the Investor (Participant),
What is it LTV?
The LTV value indicates the ratio between the provided loan amount and the value of the collateral.
The lower the percentage of LTV, the more secured the loan. For an example of achieving a LTV value of 70% with a loan of CZK 7,000,000, a collateral value of CZK 10,000,000 is required.
Is it possible to pay for Participation in another currency?
- Yes, as part of investing, you can ask us to pay for participation in another currency - so participation in EUR can be paid in CZK and participation in CZK can be paid in EUR. We will make the change according to the current exchange rate list of the CITFIN savings cooperative.
- If you establish a participation in EUR through payment in CZK, the exchange rate of sale will be used. If you establish participation in CZK through payment in EUR, the exchange rate of purchase will be used.
When will I receive a return on participation?
- You can expect your first return at the end of the month after the month in which your investment was activated. Eg. If your investment was activated, for example, in January, you can expect the first return at the end of February, which will be the return for the appropriate number of days in January when your investment was already active.
Why should I invest in Participation?
- on behalf of the Investor RONDA INVEST a.s manages, monitors and enforces the loan receivable for the entire duration of the loan,
- The participant receives a regular above-standard return.
- All loan receivables in which Participants have the opportunity to invest are secured by a lien on creditworthy real estate.
- The invested amount is usually repaid on an ongoing basis.
- All loan receivables are first financed from the resources of RONDA INVEST a.s. and project partners
- Revenues of RONDA INVEST a.s. are dependent on the payment morale of the debtor and RONDA INVEST a.s. thus shares the risk with the Participants.
- RONDA INVEST a.s. does not charge any monthly flat fees for the management or monitoring of the receivable
- The Participant has the opportunity to assess the current development of the loan receivable before the investment.
- The Participant has the option to choose any amount of investment if the minimum invested amount of 400 EUR in one Loan is met.
- The participant has the opportunity to diversify risk by investing in more credit claims.
Why should I prefer Participation over other products on the market?
- Compared to mutual funds or real estate funds, arranging and managing participation is free. All loan receivables in which Participants have the opportunity to invest are secured by a lien on creditworthy real estate. Compared to investments in mutual funds or corporate bonds, investments in Participations are therefore less risky and yet offer a very interesting appreciation.
- All loan receivables are first financed from 100% of the resources of RONDA INVEST a.s. and their partners and only then are the loan receivables offered to the Participants. This is an advantage of Participations, for example, compared to investing in corporate bonds.
- Revenues of RONDA INVEST a.s. are fully dependent on the payment morale of the debtor and RONDA INVEST a.s. thus sharing the risk with the Participants. This is another advantage of Participations, for example, compared to investing in corporate bonds.
Compared to mutual funds or real estate funds, the Participant receives a regular monthly return on his / her investment and is usually repaid on an ongoing basis.
How does the loan process in RONDA INVEST a.s. look like?
Based on many years of experience in the field of finance, we strictly follow the following process in financing:
- at the beginning, documents are always requested from the applicant for his business plan, creditworthiness and security, which are assessed by the trade department and subsequently by the risk management department (pre-selection)
- if the transaction is assessed as realizable, the risk management department may request additional documents / information and the valuation of the real estate collateral is processed by a selected appraiser
- the ratio of the loan amount to the value of the property is always max. 70%
- loans of RONDA INVEST a.s. are provided mainly by residential real estate in Prague, the surroundings of Prague or regional cities, which are sufficiently liquid
- subsequently, a loan proposal is prepared, which has a business part, a part related to risk management and a legal part (assessment of legal risks by experienced lawyers with knowledge of credit issues)
- the loan proposal is discussed at the credit committee
- in the case of approval of the loan proposal by the credit committee, the loan documentation is prepared
- subsequently, the date of signing the loan documentation is agreed with the Lender and it is signed by both parties
- after the fulfillment of the stipulated conditions for drawing on the Loan, the Loan is granted; one of the conditions for granting is always the signature of a notarial deed with permission for enforceability by the Lender
- the active loan is regularly monitored by the risk management department in terms of collateral, the client's creditworthiness and compliance with the agreed contractual conditions
- in case of the client's delay in repayment, RONDA INVEST a.s. standard reminder and recovery process
- at the moment of repayment of the Loan, the client is issued a confirmation of the termination of the lien on the real estate
What if the credit client does not repay?
- In case of default of the credit client with repayment, RONDA INVEST a.s. standard reminder and recovery process; RONDA INVEST a.s. always tries to go the way that leads to the return of the provided funds in the highest possible volume as quickly as possible.
- Each Loan offered for Participation is secured by a guarantee statement of a natural person (the debtor's owner) or this natural person is a co-debtor of the provided Loan.
- If the client / guarantor does not respond adequately to reminders, RONDA INVEST a.s. entitled to proceed with the realization of the real estate pledge.
- Each Loan offered for Participation is also secured by a notarial deed with permission to enforce, which will give RONDA INVEST a.s. allows to speed up a possible recovery process.
- The loan agreement and the mortgage agreement contain an arbitration clause, which means that in the event of a dispute between RONDA INVEST a.s. and the debtor (pledgee), such a dispute will be decided by an arbitrator or arbitrators in arbitration proceedings (faster than a standard court).
- In case of non-fulfillment of contractual conditions by the client, RONDA INVEST a.s. entitled to apply various contractual measures against the client (reminders, contractual penalties, loss of the benefit of installments,…).
In the case of receivables management in the recovery regime, the Participants do not pay any additional fees, but RONDA INVEST may offset the costs expediently incurred against the amount recovered.
What are the risks of Participation?
- Profitability Participation can be affected by many different factors - in addition to the financial situation of RONDA INVEST a.s. and the financial situation of the Lender, the profitability of the Participation may be affected by a number of related factors including economic prospects, financial and political facts, as well as factors affecting the credit market in general.
- Participation is intended only for entities for which the possible loss of part or all of their participation in the Participation will not mean a significant deterioration of their economic situation.
- Participation is a risky product, the income of which is based on the income from the relevant Loan provided to RONDA INVEST a.s., in which the Participant participates.
- The return on participation in the Participation and the income from the Participation are affected by the performance of the Credit to the Administrator.
- The amount of income from the Participation may be affected by the amount of fees charged.
- Participation Risk as a means that does not establish direct claims against the Lender under the Loan Agreement.
- Risk of changes in the terms of the Loan Agreement.
- Risk of recovery of any amounts due.
- Credit risk of RONDA INVEST a.s.
What happens to the Participation in case of early repayment of the Loan?
- In the event of early repayment of the loan by the Lender, the Participations are settled, ie. The Participant will receive back the amount he has invested, the Income until the moment of early repayment of the Loan and in the case of early repayment of the Loan outside the period when the Loan is entitled to repay the Loan, also the Extraordinary Income.
What is the minimum amount of investment in Participations?
- The minimum invested amount is 400 EUR in one loan, but we also offer action loans, where it is possible to invest from 50 EUR.
What is the expected duration of the Participation?
- The expected duration of the Participation always depends on the maturity or expected maturity of the loan receivable in which the Participant invests. The expected duration of the Participation will usually not exceed 60 months.
What appreciation of funds will my investment in Participations bring me?
- The appreciation depends on the loan receivable in which you decide to invest, but the return usually starts at 4% p.a. You can reach up to 6% p.a.
What does RONDA FINANCE a.s. do?
- The company RONDA FINANCE a.s. is our sister company, which is a payment service provider. This means that in case you decide to invest in the Participations, we will set up a payment account with this company. It will be used to establish Participations and also to pay out your shares in interest income and the principal of the loan receivable. You can control your account via internet banking or by phone.
What documents will I need with RONDA INVEST a.s. to sign if I decide to invest in Participations?
- Prior to arranging the first Participation, the Participant must conclude with RONDA INVEST a.s. A Framework Participation Agreement, which sets out the general conditions under which a Participant may acquire Participation in Loans.
- Subsequently, the Participant enters into a Participation Agreement, on the basis of which it negotiates the Participation for a specific Loan.
- The concluded business also includes the General Terms and Conditions and the Tariff of Participations.
How do I find out how a credit claim I have decided to participate in is developing?
- RONDA INVEST a.s. sends to each Participant a report on the status of its portfolio of Participations at least once every 3 months, by e-mail or via the internet banking of RONDA FINANCE a.s. Alternatively, you can tell us that you wish to send a report on the status of the Participations portfolio by post.
What fees are associated with purchasing and holding a Participation?
- RONDA INVEST a.s. retains part of the income for the administration, monitoring and possible recovery of the loan receivable. The Investor does not pay any other fees for the negotiation and administration of the Participations;