skip to Main Content
1300 544 166
Credit Crowd is good at assessing, pricing and managing loan risk. However, it is important to remember that the final best judge of the risk and return in a loan investment is you.

The loan and investment marketplace that we manage is founded on ‘contributory’ principles. This means that our investors have the means to assess each loan opportunity offered to them – and we actively encourage you to do just this.

It is important to understand that Credit Crowd and its employees, attorneys and associated entities cannot and do not guarantee the performance of the investments in our funds or the repayment of capital invested.

The key risks to capital and return are primarily the borrower’s ability to repay their loan and secondarily, in the event of default, the value of the security properties underlying a loan.

What are the major risks?

Economic Risk. This may include changes in global and domestic conditions which may cause downturns in the business sector and real estate market that impact a) the Borrower’s ability to repay a loan and b) the chances of recovering interest and invested capital from the sale of the security property.

Market Risk. Mortgage investments carry fixed interest, have no anticipation of capital gain and are not actively traded. So, movements in markets that affect the value of other investment types like stocks and bonds will likely have no impact on the value or return of mortgage investments.

Regulatory Risk. Changes in or interpretations of government policies, regulations or tax laws may adversely impact the value of investments.

Investment Manager Risk. This includes the Fund Manager’s failure to anticipate market movements or to manage investment risks appropriately, the departure of key management and staff, and deficiency in documentation which may adversely affect the return of interest and capital of an investment.

Credit Risk. Despite clear credit histories and impressive statements of assets and liabilities, borrowers and guarantors may experience personal or business difficulties that may render them poor credit risks.


Distributions to investors are dependent on the borrower making repayments on time. If the borrower does not pay on time, and if Credit Crowd or parties related to it does not provide Income Support, then investors in that specific Sub Fund may not receive all of the interest expected and their return will be reduced. The return of capital to investors is dependent on the borrower successfully implementing the intending (or alternative) repayment plan. If the plan is partially or wholly unsuccessful, there is the risk that the investor may lose some or all of their capital.


The value of Security Property may change in response to market movements and other factors beyond the control of Credit Crowd and the Borrower. There is also the risk that a valuer may not properly or accurately value a security property. Although Credit Crowd takes precautions to ensure that all valuations it relies on are accurate, there is a risk that the valuation is fundamentally flawed.


There is a real chance of loan capital being repaid either earlier or later than the date specified in the supplementary product disclosure statement (SPDS).  Therefore, Credit Crowd strongly advises Members against anticipating the return of the funds exactly on time and committing them elsewhere in advance.


It is important to understand the nature of the lending business conducted by Credit Crowd. The types of borrowers that obtain loans from Credit Crowd and the short terms for which loans are advanced, can lead to loan defaults at a higher rate than those of traditional lenders. In the event of default, as an asset based lender Credit Crowd places primary reliance on the first mortgage security that is held to recover interest and capital and will realise such security when required.

The occurrence and management of defaults is an ordinary (though not expected) part of the lending business carried on by Credit Crowd.


With a development loan, much depends upon the developer remaining solvent and completing the development. If the developer fails to comply with building standards or becomes insolvent, then Credit Crowd may need to step in and complete the project or otherwise protect Members’ interests.

** In addition to the above major risks, other risks such as types of sub fund property, prepaid and capitalised interest, insurance risk, low documentation lending, recovery action costs and cyber risks can all have adverse effects on investments.

Our underwriting team works hard to mitigate the risks to our investors. For a more comprehensive description of the risks of investment in this asset class, please download the Product Disclosure Statement (PDS) of our retail fund.
Back To Top