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All investment, crowdlending and crowdfunding terms explained in one place. Search for a concept or expand the definition.
49 terms
Under Law 5/2015 of 27 April, two types of investors are defined: accredited investors and non-accredited investors. An accredited investor is a natural or legal person who meets certain net worth, income or professional knowledge criteria, allowing them to access investment opportunities with fewer restrictions. Non-accredited investors are subject to additional protections and investment limits.
For further details you can consult our blog.
This is the independent French administrative authority responsible for supervising and regulating banks and insurance companies in France. It is overseen by the Bank of France (Banque de France).
Alternative investment refers to all investments focused on assets other than traditional ones (equities, bonds, cash). They allow investors to diversify the risks of their portfolio through investments that behave differently from traditional ones. Examples of alternative investments include real estate, commodities, hedge funds, and start-ups.
APR stands for Annual Percentage Rate. It provides a value closer to the real cost (in the case of a loan) or return (in the case of a deposit) of the contracted financial product.
The APR offers a more accurate value than the nominal interest rate (NIR), as it includes in its calculation, in addition to the nominal interest rate, bank charges and commissions and the term of the transaction.
APR formula: the formula involves the nominal interest rate (r) and the payment frequency during a year (f). If paid monthly, f = 12; quarterly, f = 4; annually, f = 1.
In company law, the articles of association is the rule agreed by the partners or founders that governs the operation of a legal entity, whether a company, association or foundation. In general, it is common to all types of collegiate bodies, including entities without legal personality.
Their core functions include, among others, the following:
Governing the entity's conduct towards third parties (for example, decision-making rules, representatives, etc.).
Governing the rights and obligations of members and the relationships between them.
In this case, the rule has effects primarily inter partes.
The Banco de España is the national central bank and, within the framework of the Single Supervisory Mechanism (SSM), the supervisor of the Spanish banking system alongside the European Central Bank. Its activity is regulated by the Banco de España Autonomy Law.
Its functions include putting legal tender into circulation, inspecting and creating regulations for credit institutions, controlling foreign exchange legislation in relation to financial transactions, and maintaining the country's foreign reserves. It is led by a Governor and an Executive Committee. It currently coordinates with the European Central Bank (ECB), which is responsible for monetary policy and price stability in the euro area, as well as regulating and supervising financial institutions with assets exceeding €30 billion.
With the entry into force of the new Anti-Money Laundering Law, when formalising any notarial document it is necessary to certify the identification of the beneficial owners involved in the deed. Beneficial ownership deeds are issued by the notaries themselves as collaborators in anti-money laundering prevention.
The deed is a document similar to a public instrument in which the parties certify that they are themselves the holders of the assets or rights related to the transaction, confirming that they are not acting on behalf of third parties — with the aim of preventing the involvement of so-called 'front men'.
The notary will record in the document that they have fulfilled the obligation to identify the beneficial owner. In commercial companies, the beneficial owner is the one whose participation in the company exceeds 25%. The articles of incorporation serve as evidence, together with a declaration by the signatory that the capital composition has not changed.
A bond is a debt instrument issued by a company or public authority to raise financing.
The bond issuer promises to repay the borrowed money to the bond buyer, normally plus pre-agreed interest known as a coupon. This is why it is known as a fixed-income instrument.
Bonds are one of the main sources of financing for large companies and public authorities, primarily governments, which materialise debt through bond issuances, providing their lenders with a financial asset.
A bond is an aliquot portion of a loan. The issuing organisation divides the total debt it wishes to place into small portions called bonds, so that any person can lend money to it — because the loans are so large that no single agent can grant them — thereby dividing the loan 'contract' into many small contracts or securities (the bonds), so that the bond holder has a right to have the money lent to them returned, plus interest.
Bonds can be transferred on the secondary market, which causes their market price to fluctuate. Bond owners or lenders are called 'holders' or 'bondholders'.
When buying a bond we are making a loan. The buyer delivers an amount of money, called the bond principal, to the issuing company. The company undertakes to repay the amount lent on a pre-established maturity date, plus a pre-established interest rate. This is why bonds are considered fixed-income assets, since regardless of how the company performs, we will receive the fixed interest to which the issuing company has committed at the end of the period — although they sometimes carry variable interest rates.
In commercial companies, a legal act by which, upon approval of the board of directors and the general shareholders' meeting, an increase in the company's share capital is carried out either by issuing new shares or by increasing their nominal value. It must be executed in a public deed and registered with the Commercial Registry.
The Comisión Nacional del Mercado de Valores (CNMV) is the body responsible for supervising and inspecting Spanish securities markets and the activity of all those who participate in them.
The CNMV's objectives are:
To ensure the transparency of Spanish securities markets and the proper formation of prices, and
To protect investors.
The Commercial Registry is an official institution responsible for providing public information on the natural and legal persons involved in commercial activity. It records the acts of traders, whether individuals or companies, so that they can be known by those who enter into contracts with them (suppliers, banks, etc.), as well as by current or potential investors (e.g. shareholders) and by public entities with which they have dealings (Social Security, Tax Agency, etc.).
The Commercial Registry extract (Nota Simple) is the document issued by the Commercial Registry containing the general and up-to-date information on any company registered in Spain.
Any company opening an account on Cresor must provide a Commercial Registry extract dated less than three months old in order to validate the account. It is an indispensable requirement requested by our payment institution.
This is the risk of concentrating your money in few investments. This risk is reduced through diversification.
Concentration risk also arises when investing in the same corporate group. It is always reduced through diversification.
Conflicts of interest are situations in which the judgement of an individual, in relation to a primary interest for them, and the integrity of their actions, tend to be unduly influenced by a secondary interest, which is frequently of an economic or personal nature.
In other words, a person incurs in a conflict of interest when, instead of acting as required, they could direct their decisions or act for personal gain or the benefit of a third party.
Conflicts of interest are present in numerous decisions in the professional lives of managers and employees, as well as in companies and organisations, both public and private.
This is the type of strategy with the lowest risk and return of all strategies. The main focus is on obtaining recurring and secured income in the long term. Properties are usually located in prime areas with highly solvent tenants.
This is the type of strategy at the second lowest risk and return level. These strategies add risk and return to the core strategy due to the nature of the property or the tenant. For example, a property located in an area a few blocks from a prime location or one that requires minor improvement works.
This is the fee charged by Cresor, calculated as a percentage of the funds raised for the project, provided it closes successfully — i.e. the financing target published on the platform is reached. If it does not close successfully, Cresor will not charge this commission. Once the campaign ends and as a prior step to disbursing the funds to the promoter/manager, this commission is deducted in favour of Cresor. It does not affect the final return obtained by investors, as the Promoter bears its cost. You can view Cresor's fees on the Fees page.
Crowdfunding is a form of financing that involves using the capital of numerous individuals through small contributions.
Crowdfunding helps companies or individuals obtain financing beyond what banks, friends and family can provide. It is used as a source of financing for very diverse projects, from political or business campaigns to musical or artistic projects.
This financing network is usually online, enabling access to a large number of people who, through financial contributions, help fund a project. There are four types of crowdfunding:
Donation crowdfunding: people who contribute money do so unselfishly, simply for the satisfaction of helping someone achieve a project without receiving any benefit or reward. This type of crowdfunding is unregulated.
Reward crowdfunding: backers receive a reward such as a digital mention, being among the first to enjoy the service offered or receiving a personalised product, among others. In this case, as with donations, the money contributed is not recovered. This type of crowdfunding is also unregulated.
Equity crowdfunding: in this case the capital contributed represents an investment, receiving a percentage of the company through shares. The money contributed by the investor becomes part of the company's share capital. This type of crowdfunding is regulated by the CNMV under Law 5/2015 on the promotion of business financing.
Crowdlending: in this type of crowdfunding the money is recovered through repayment of the loan with interest. The investor acts as a lender, so in this case the company includes the crowdlending funds in its liabilities. This type of crowdfunding is regulated by the CNMV with a binding opinion from the Banco de España under Law 5/2015 on the promotion of business financing.
The Spanish government, through its regulatory bodies (CNMV and Banco de España), created the figure of the Crowdfunding Service Provider (ECSPR) to provide a legal framework for crowdfunding and collective investment platforms that help companies or projects obtain financing through contributions from many investors.
Their objective is to connect companies or project promoters with various investors, generally through a web-based platform. As a way to regulate this new market, a compulsory licence was created for these platforms.
The mandatory licensing process for all collective financing platforms in Spain arose from the publication in the BOE of Law 5/2015 of 27 April on the promotion of business financing. That law establishes strict requirements for the granting of licences under the supervision of the CNMV and the Banco de España.
Currency refers to both foreign banknotes and bank balances denominated in foreign currencies. Any right expressed in foreign currency and payable abroad (a cheque, for example) is also considered a currency.
In the investment context, diversification is carried out by investing in multiple assets, such that an investor can reduce the overall risk of their investment portfolio by investing across multiple assets.
Diversification is the result of the act of diversifying. This verb refers to making something that was uniform or lacked variants become varied and heterogeneous.
To diversify, in other words, is to introduce diversity (plurality).
In the world of investment, we speak of portfolio diversification.
A dividend occurs when a company distributes profits to its shareholders. Each investor thereby benefits from the company's results by receiving an amount of money in return for their investment in the company.
Electronic wallets are digital accounts created to increase investor security and protection. These accounts ensure that investor funds are not transferred to the company until the investment opportunity closes successfully, reaching its target. They also ensure that if anything happens to Cresor, investor funds remain safe and accessible.
Under Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European Crowdfunding Service Providers:
An experienced investor is an investor who is aware of the risks associated with investing in the capital markets and has sufficient resources to assume those risks without exposing themselves to excessive financial consequences.
The following legal or natural persons are considered experienced investors in all services offered by crowdfunding service providers:
1) Legal persons meeting at least one of the following criteria: a) own funds of at least €100,000; b) net turnover of at least €2,000,000; c) balance sheet of at least €1,000,000.
2) Natural persons meeting at least two of the following criteria: a) personal gross income of at least €60,000 per tax year, or a portfolio of financial instruments exceeding €100,000; b) the investor works or has worked in the financial sector for at least one year in a professional position requiring knowledge of the transactions or services provided, or has held an executive position for at least 12 months in a legal person as defined above; c) the investor has carried out transactions of significant volume in capital markets at an average frequency of 10 per quarter over the previous four quarters.
Crowdfunding service providers must provide investors with a template they can use to apply for treatment as experienced investors.
Inflation is the generalised and sustained increase in the prices of goods and services in a country. When the general level of prices rises, each unit of currency buys fewer goods and services. In other words, inflation reflects the decrease in the purchasing power of a currency. It is a highly relevant concept for any investor, as the real return on an investment will be reduced by inflation.
General rises in the prices of goods and services erode the value of your money. This also affects your investments. If the returns on your investments are lower than inflation, you will be losing purchasing power.
This is the agreement that Cresor signs on behalf of investors and which governs the relationship between companies and investors. You can access this agreement at any time, before and after investing, through the investment opportunity or your Cresor account.
An investment portfolio is the set of investments held by a person or entity.
An investment portfolio is the set of assets with which an investor or saver implements their financial strategy. In other words, it is the set of financial products and assets to which the saver allocates their money in order to obtain a return.
The concept of an investment portfolio introduces a global view of one's investments, taking careful account of the correlations that may exist between different assets. This gives us an idea of the overall return our portfolio can offer and also helps in strategic decision-making.
It can hold various assets, movable or immovable property, or both.
The internal rate of return (IRR) is the interest rate or return offered by an investment. In other words, it is the percentage of profit or loss that an investment will generate on the amounts that have not been withdrawn from the project.
It is a measure used in evaluating investment projects and is closely related to the net present value (NPV). It is also defined as the value of the discount rate that makes the NPV equal to zero for a given investment project.
The IRR gives a relative measure of profitability, expressed as a percentage. The main challenge lies in its calculation, as the number of periods determines the degree of the equation to be solved. To solve this, various approximations, a financial calculator or computer software can be used.
The IRR is the discount rate that, at the initial moment, equates the future stream of receipts with that of payments, generating an NPV equal to zero. Ft are the cash flows in each period t, I0 is the investment at the initial moment (t = 0), and n is the number of time periods.
The Land Registry is the administrative institution responsible for providing official public record of ownership of real estate, as well as the rights and charges affecting such properties. It is therefore a mechanism that seeks to enhance the guarantees for all those with an interest in real estate.
The risk of not being able to access the money committed in your investment when you want to.
Liquidity risk has two different meanings. In finance, it is the risk that an asset must be sold at a price below market value due to its low liquidity — or simply not being able to sell it at all. In economics, liquidity risk measures the ability of a person, company or institution to meet their short-term obligations.
In a crowdfunding service provider, the investor signs a mandate agreement in favour of the CSP to act on their behalf and in their name. This is signed expressly at the time of registration.
Market risk is commonly described as the probability of price changes in the assets a company holds. More specifically, it refers to the risk of value losses in an asset, usually associated with market fluctuations and variations.
In the financial world, market risk is the risk of incurring losses due to changes in the market price of portfolio positions as a result of an adverse movement in the financial variables — risk factors — that determine their market value.
The types of market risk factors to which an institution's positions may be exposed can be diverse and will depend on the characteristics of the instruments in the portfolio. Examples include movements in interest rates, equity prices, exchange rates, credit spreads, credit quality migrations (ratings) or even issuer defaults, changes in factor volatilities, and movements in commodity prices.
To measure and control market risks, the commonly accepted reference metric is Value at Risk (VaR). VaR is a concept that originated in the late 1980s through JPMorgan's pioneering RiskMetrics™ model. It estimates, over a given horizon, the losses associated with a given confidence level that may result from the market uncertainty inherent in a particular financial asset position.
Nominal return measures the performance of invested capital in monetary terms, rather than in terms of purchasing power. In other words, it does not take into account changes in purchasing power.
It does not factor in external elements such as inflation or taxes. It therefore does not reflect the real change in the investor's purchasing power. Put differently, the nominal return is the gross return, without taking inflation into account.
Nominal return formula: Nominal return (%) = [[(1 + real return) × (1 + inflation)] – 1] × 100
The nominal return is the return that an investor apparently obtains. We say 'apparently' because it does not account for whether prices have risen or fallen. As mentioned, it does not factor in elements that impact the investor's purchasing power, such as inflation.
For example, a return of €100 on €1,000 equates to 10%. The return value is €100 nominal.
Under Law 5/2015 on the Promotion of Business Financing, two types of investors are distinguished in crowdfunding service providers: accredited and non-accredited investors.
Non-accredited investors are natural or legal persons who do not qualify as accredited investors.
These are risks associated with the people, processes and technologies behind your investment. At Cresor we are committed to minimising this risk by applying an investor protection system in which the teams behind each investment are validated. We also have an obsession with investor security.
This is the type of strategy with the highest risk and return of all strategies. These strategies are typically carried out through major refurbishments or construction from a plot of land. They are strategies where income is most uncertain, but also where the opportunity offers the highest returns.
A payment gateway (or payment platform) is a service provider that, through a secure connection, authorises payments for online transactions — whether investments or payments to online stores in exchange for their products. They are regulated entities that require authorisation from the Banco de España under the name of payment institution.
Payment institutions are a type of entity created by Law 16/2009 of 13 November on payment services, distinct from credit institutions, which are authorised to provide payment services such as transfers, direct debits and card payments.
The requirements for obtaining and maintaining authorisation as a payment institution, as well as other regulations governing this type of entity, are set out in Royal Decree 712/2010 of 28 May on the legal framework for payment services and payment institutions.
Real return is the return that takes inflation into account in its calculation. In other words, it seeks to provide a more accurate picture by factoring in the loss of purchasing power caused by inflation. Its formula, derived from the nominal return, is:
(1 + real return) = (1 + nominal return) / (1 + inflation)
A representation agreement is when a natural or legal person acts on behalf of or in place of another. The representation agreement must always be reflected in a notarial power of attorney.
Here we define the return concepts you will find in our opportunities:
Annual return: this is the annual IRR. The internal rate of return (IRR) is the interest rate or return offered by an investment. It takes into account all income received by the investor, as well as the timing of receipt. It is published when the opportunity opens.
Annual interest rate: annual nominal interest rate on the loan. The annual nominal rate is obtained by multiplying the periodic nominal rate by the number of payment periods in a year.
Total return obtained: the actual interest rate obtained over the period the opportunity lasted, from start to maturity, non-annualised. Calculated after payment and repayment have been made. Calculated by dividing the gross profit amount by the invested capital amount.
Annual IRR obtained: interest received on the opportunity, annualised, calculated after payment and repayment have been made.
Return on Invested Capital. This is a ratio calculated by dividing total investment returns by the capital invested.
This is the document that governs the internal relations of the company. The objective of this document is to eliminate the risks of conflict that could interrupt the continuity of a project. For example, imagine that one of the investors wishes to sell their stake to a friend — this shareholders' agreement may establish that the other investors will have priority to buy the stake of the investor who wants to sell.
Shares are an aliquot (proportional) part of a company's share capital. They are variable-income instruments (their return depends on the company's profits, paid as dividends).
The holder is a co-owner of the company (in proportion to the number of shares held). They therefore have not only economic rights (receiving a share of dividends) but also political rights (making decisions by voting at shareholder meetings). They represent equity financing (no interest is paid on them, though dividends are, and there is no obligation or schedule for their repayment). They are issued by public limited companies.
They are freely transferable: no consent from other shareholders is required to sell them (with some exceptions, such as closed joint-stock companies, where consent is required).
A concept originating from English that refers to recently created companies, which began to be used with the emergence of business models with high growth and scalability potential.
When we speak of 'participaciones' (units/stakes) in relation to a company: they are the aliquot and indivisible parts that make up a limited liability company. They represent the contributions to the share capital by its partners.
Limited liability commercial companies divide their share capital through participaciones. In this way, the ownership of such companies is distributed among their holders.
In general, participaciones are treated as aliquot and identical parts. All of them imply the commitment of their owners or holders to assume the various rights and obligations in the company in question.
When we speak of 'participaciones' in relation to an investment fund: in an investment fund, a unit is each of the equal (aliquot) parts into which the fund's managed assets are divided.
To invest in a fund, you must buy units, an operation called a subscription. The reverse operation is a redemption, which consists of selling units to recover the invested capital and any gains or losses.
Units have a price, known as the net asset value. The net asset value is calculated by dividing the fund's assets by the total number of units issued. The price of units therefore increases or decreases every day depending on the performance of the fund's asset portfolio.
A unit in a fund is to the fund what a share is to a listed company. Unlike shares, units can be fractional — investors typically buy fractions with several decimal places.
This is the type of strategy at the third lowest risk and return level. This increased risk and return is justified by the existence of a problem with the property, such as inappropriate management, absence of tenants or defects in the property. This strategy consists of implementing a plan to enhance the value of the property — for example, through professionalised management, mass marketing or significant repairs.
