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A beneficial owner is:
A natural person who, taking advantage of their influence, makes a transaction, act, action, operation, or step or otherwise exercises control over a transaction, act, action, operation, or step or over another person and in whose
interests or favour or on whose account a transaction or act, action, operation, or step is made;

In the case of companies, a beneficial owner is the natural person who ultimately owns or controls a legal person through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that person, including through bearer shareholdings, or through control via other means. Direct ownership is a manner of exercising control whereby a natural person holds a shareholding of 25 percent plus one share or an ownership interest of more than 25 percent in a company. Indirect ownership is a manner of exercising control whereby a company which is under the control of a natural person holds or multiple companies which are under the control of the same natural person hold a shareholding of 25 per cent plus one share or an ownership interest of more than 25 per cent in a company;

In the case of a trust, civil law partnership, community, or legal arrangement, the beneficial owner is the natural person
who ultimately controls the association via direct or indirect ownership or otherwise and is such associations’: settlor
or person who has handed over property to the asset pool; trustee or manager or possessor of the property; person
ensuring and controlling the preservation of property, where such person has been appointed; or the beneficiary, or
where the beneficiary or beneficiaries have yet to be determined, the class of persons in whose main interest such
association is set up or operates.

Equity is the capital placed in the company by its owners. The owners are paid the last, after all liabilities have been paid.

Mezzanine is a hybrid capital (subordinated loan or preferred equity) that lies between equity and secured loan. It has a lower risk than equity – mezzanine financing is repaid before equity, but after all bank obligations have been fulfilled. In addition to the usual interest, bonuses that depend on the profitability of the project may be added to the mezzanine capital.

Unsecured loan is a layer of capital between equity and secured loans. They are riskier than secured loans, but also more profitable. Unsecured loans are repaid to the owner of the capital after all secured debts have been repaid.

Secured loan is the safest and thus the least profitable type of capital. The loan is secured against a collateral, which is usually a mortgage on the assets of the company or some other type of collateral. Secured loans are always repaid in the first priority.

Rental - Investments to projects with available cash flow.

Development - Investments to property development projects (the construction and sale of buildings).

Speculative - Risky early-stage investments to a property where the main parameters of the development project are known, but they can change significantly during the implementation of the project (e.g. the development process of the detailed plan and its duration as well as building rights).

Family member means the spouse, or a person considered equivalent to a spouse of a politically exposed
person or local politically exposed person; a child and their spouse, or a person considered equivalent to a
spouse of a politically exposed person or local politically exposed person; a parent of a politically exposed
person or local politically exposed person.

Local politically exposed person means a person specified above who is or who has been entrusted with
prominent public functions in Estonia, another contracting state of the European Economic Area, or an
institution of the European Union.

Person known to be close associate means a natural person who is known to be the beneficial owner or to
have joint beneficial ownership of a legal person or a legal arrangement, or any other close business relations,
with a politically exposed person or a local politically exposed person; and a natural person who has sole

Politically exposed person (PEP) means a natural person who is or who has been entrusted with prominent public functions including a head of state, head of government, minister, and deputy or assistant minister; a member of parliament or of a similar legislative body, a member of a governing body of a political party, a member of a supreme court, a member of a court of auditors, or of the board of a central bank; an ambassador, a chargé d’affaires, and a high-ranking officer in the armed forces; a member of an administrative,
management, or supervisory body of a state-owned enterprise; a director, deputy director, and member of the board or equivalent function of an international organisation, except middle-ranking or more junior officials.

Working capital is a capital needed for financing the running operations of a company.

Investment is a capital placed in the development of a company, in particular in its main assets. 

Bridge financing is a temporary short-term financing, usually later replaced by a long-term and more stable financing solution. 

M&A is financing mergers and takeovers of businesses.

Annual return is the profit on an investment over the course of a year. If a project exceeds a year, the calculation will include a respective coefficient.

LTV is an acronym of loan-to-value, which is the ratio of a loan to the value of an asset expressed in percentage terms, or if a property is worth 50,000 euros and the amount of loan is 40,000 euros, then LTV is 40,000 ÷ 50,000 = 80%. 

Maximum LTV on a Crowdestate platform is up to 80%.

SPV is a widespread English abbreviation for the term “Special Purpose Vehicle”, which means a company established for a sole purpose.

Crowdestate uses SPV-s to keep its members’ investment properties separated from its own activities. Such an approach ensures the independence, security and transparency of any single investment.

Read more about this from our blog post: Investing in real estate

Companies seeking funding can use our interest auction functionality to potentially reduce their interest expenses. Interest auction is a Marketplace where Crowdestate has used your loan application and submitted collateral data to set the initial maximum interest rate of your loan. Crowdestate’s investors will be bidding for the winning interest rate throughout the funding campaign and only investors with the lowest interest rate bids can participate in funding your loan. The winning investors and the final loan interest rate are determined upon the completion of the funding campaign.

Example: Crowdestate has allowed the Borrower (Sponsor) to apply for a EUR 450.000 loan with the initial, maximum interest rate of up to 12%. The following bids were received during the funding campaign:

A. EUR 150.000 at 10% interest rate;

B. EUR 200.000 at 10,5% interest rate;

C. EUR 150.000 EUR at 11,2% interest rate;

D. EUR 200.000 EUR at 11,5% interest rate;

E. EUR 100.000 EUR at 12% interest rate;

F. EUR 150.000 EUR at 12% interest rate.

The total amount of loan offers in the amount of EUR 950.000 exceed the Borrower’s maximum loan amount, so the loan amount will be filled with the winning bids, starting from the lowest bids. Bids A and B have the lowest interest rate and will participate for their full amount, EUR 350.000. Bid C will participate in the remaining available amount of EUR 100.000 and EUR 50.000 from that bid will be discarded.

All included bidders will receive the rate the final participating winning bidder was asking, i.e. bidder C-s 11,2%.

Capital loss is a calculated indicator, showing the difference between the current purchase price and the basic amount of an investment.

Crowdfunding is an innovative, internet-based method to raise money to finance various projects. The necessary funding is contributed mostly in small amounts and large number of people.

Crowdfunding is used to fund charities, politics, product development and other commercial projects.

Well-known crowdfunding platforms are Kickstarter, Indiegogo and GoFundMe.

Crowdinvesting is specific segment of crowdfunding, where profit-seeking investors are jointly funding business projects or companies.

The revenues or profits earned by the project or company are distributed between investors proportionally to their original investment into the project or company.

Crowdinvesting enables smaller investors to participate in funding large business projects.