Credory

🚨 Disclaimer

1. All research on startup and the whole investment memo has been done for personal use of Akim Arhipov.
2. Please note, fff.vc is not syndicating for this deal, we are simply sharing the opportunity, everyone can participate directly.

Credory is specialized in issuing business loans secured by real estate. They have adapted their loan products for legal entities registered in Estonia. Their goal is to become a reliable financial partner for micro and small companies operating in Estonia.

• Estonian non-banking lender founded 2020
• Issuing real estate backed business loans in Estonia
• Regulated under Estonian Financial Intelligence Unit (RAB)
• Outstanding loan portfolio 5M€
• Profitable operations & good portfolio quality
• Solid team with relevant domain background

Securing financing remains a challenge for many Estonian businesses due to limited opportunities, particularly for smaller companies. Established businesses may access loans against their revenues. But for the rest - a collateral is often required. And for bigger amounts the only collateral suitable is predominantly real estate. Such loans can be applied through a traditional retail bank. However those banks impose tight criterias, necessitating profitability, clean financial histories, and lengthy application processes. Mainly due to their over regulated licensing position.

Credory addresses this financing gap, providing a viable solution for businesses with solid plans and collaterals but not meeting traditional banking standards. Operating in the subprime business mortgage sector, they offer loans of up to 500,000€ with average yearly interest rates between 12-16%, and durations spanning 18-24 months. They serve as the preferred partner for businesses often overlooked by banks, with a significant percentage of their loans later refinanced once clients achieve 'bank compatibility.'

The non-bank business lending market in Estonia has matured over the past 15 years, with an estimated market size of around 400M€ annually. Key competitors include Hüpoteeklaen, Estateguru, and Nordic Hypo, with loan portfolios ranging from 40-65M€.

Credory maintains a focused business approach in Estonia, aspiring to achieve a 50M€ loan portfolio within the next 3-4 years. Their differentiation lies in a conservative credit policy, leading to lower application acceptance rates and portfolio default rates, enhancing operational efficiency and investor attractiveness.

Approximately 70% of Credory's financing is sourced from senior secured lenders, with the remaining capital derived from unsecured loans and equity. Notably, 50% of the total capital is contributed by parties associated with the owners, demonstrating a substantial commitment in every loan issued.

Established relationships with wealthy individuals and a credit line from an Estonian retail bank underpin their current financial structure. The senior secured bond issue further diversifies their funding structure, with plans for a minimum of four equally weighted funding streams for future growth, including new bond issues every six months.

Endrik Eller / Raido Reiska / Dag Nurm

Why to invest?

1. Unique Offering: Credory stands out as the sole subprime real estate-backed bond offering in Estonia with 100% cash-generating assets as collateral. Other real estate backed bonds in the market are mostly for development projects, hence carry a much different risk.
2. Short Period: Their bonds, typically offered for 2-3 years, are intentionally shortened for their debut bond to enhance attractiveness to investors.
3. Good Risk/Reward Profile: Credory offers approximately three times the return compared to risk-free assets for a similar duration, presenting an appealing risk/reward profile.
4. Profitable Company & Strong Financing Sources: Credory is a profitable company with established relationships and diverse financing sources, instilling confidence in investors.
5. Solid amount of round already committed: The minimum bond commitment of 500k€ has already been presubscribed, with the current aim to close at 1-1.5M€, reflecting strong investor interest in Credory's offerings.

Investment offer

Credory is offering a senior secured bond

Summary of terms:

Pitch Deck & FAQ

Contacts

Term sheet from the link

For full bond issue documents and subscription info please contact the issuer:

Endrik Eller / 56944941 / investor@credory.ee