Risk disclosure

Your capital is at risk

Investing through Novus Capital is not saving. You lend money to businesses, and you may lose some or all of the amount you invest. The rate shown on a loan is a target, not a promise, and past performance is not a reliable indicator of future results.

The principal risks are:

• Credit risk — a borrower may pay late, repay only part of what is owed, or default entirely. Where a loan is secured, enforcing the collateral may recover less than the outstanding amount, or nothing at all.
• Liquidity risk — your money is committed for the term of the loan. The secondary market lets you offer your claims to other investors, but there may be no buyer at the price you want, or no buyer at all.
• Concentration risk — holding a few large positions ties your outcome to a small number of borrowers. Spreading your money across many loans is the single most effective protection available to you.
• Platform risk — the Company could cease to operate. Client money is held separately from our own and a borrower's obligation to repay survives, but the administration of your investments would be affected.
• Macroeconomic risk — inflation, interest rates and the economic cycle affect both the real value of your return and a borrower's ability to repay.

Invest only money you can afford to lose, and spread it across several loans.

No deposit guarantee and no investor compensation

Money invested through Novus Capital is not a deposit. It is not covered by a deposit guarantee scheme established in accordance with Directive 2014/49/EU of the European Parliament and of the Council on deposit guarantee schemes.

It is also not covered by an investor compensation scheme established in accordance with Directive 97/9/EC of the European Parliament and of the Council on investor-compensation schemes.

If a borrower does not repay, no scheme reimburses you. There is no state or industry backstop standing behind your investment.

The Provision Fund gives you no right to a payment

Some loans may benefit from a Provision Fund. It does not change anything written above. In the words the regulation prescribes:

“The contingency fund we offer does not give you a right to a payment so it may happen that you do not receive a pay-out even if you suffer loss. The contingency fund operator has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the contingency fund when considering whether or how much to invest.”

Treat the fund as something that may reduce a loss, never as something that prevents one.

Costs, fees and charges

Our fees are set out in the fee schedule published on the platform. The fees that apply to a particular investment are shown before you commit to it, and we give reasonable notice before any fee changes.

Fees reduce your return. A rate shown on a loan is a gross figure: what reaches you is that rate less any fee that applies, less any loss on the loan, and less any tax you owe.

Costs charged by third parties are not ours and are not part of our schedule — for example, charges your own bank applies to a transfer, or a currency conversion it performs.

How your return is taxed depends on your own circumstances and your country of residence. We do not give tax advice.

How we select the projects we list

We list business loans, and only after underwriting. A project that does not pass is not listed — but being listed is not an endorsement and does not mean a loan is safe.

Before a loan is listed we assess:

• Credit history — the borrower's repayment record, outstanding obligations and trading history.
• Loan-to-value — the size of the loan measured against the value of any collateral securing it.
• Debt-to-equity — what the business already owes, against the capital its owners have put in.
• Cash-flow coverage — whether projected income covers the repayment schedule with room to spare, rather than only on paper.

Each loan is then graded for risk. The grade and the key metrics behind it are shown on the loan, so that you can form your own judgement rather than rely on ours.

Credit scoring and pricing

The grade we assign follows from the factors in the previous section, and the rate offered on a loan reflects that grade: a weaker grade carries a higher rate, because the risk you take is higher.

A grade is our opinion, formed at one point in time from the information available then. It is not a guarantee of repayment, it is not a credit rating within the meaning of Regulation (EC) No 1060/2009, and it can prove wrong.

Where our assessment of a borrower relies on financial information that has not been audited, that is stated in the information published for the loan.

Conflicts of interest

We do not take part in any crowdfunding offer on our own platform.

We do not accept as borrowers our shareholders holding 20% or more of our share capital or voting rights, our managers or employees, or any person linked to them by control. If any of those persons invests through the platform, we disclose that fact on this page together with the specific projects invested in; such investments are made on the same terms as everyone else's, with no preferential treatment and no privileged access to information.

Our income comes from fees connected with arranging and servicing loans. That gives us an interest in the volume of lending — a conflict we manage rather than one we can remove. The same underwriting criteria apply to every loan regardless of its size, and no one is paid to steer you towards a particular loan.

Where a conflict cannot be prevented, we disclose its general nature and source, and the steps we take to mitigate it, before it can affect you.

The protections that apply to you

Regulation (EU) 2020/1503 gives non-sophisticated investors protections that operate at specific moments rather than once at sign-up:

• Classification — by default we treat you as a non-sophisticated investor, the category with the fullest protection.
• Entry knowledge test — before you invest, and at least every two years afterwards, we assess whether our services are appropriate for you.
• Simulation of the ability to bear loss — we ask you to simulate a loss of 10% of your net worth, and we repeat this every year.
• Reflection period — you have four calendar days from committing an investment in which to withdraw it, for any reason and at no cost.
• Specific risk warning — if a single investment would exceed the higher of EUR 1 000 or 5% of your net worth, we warn you and ask for your explicit consent before it proceeds.
• Key investment information sheet — each loan is accompanied by a key investment information sheet drawn up by the borrower.
• Segregation — client money is held separately from our own funds.

The detail is in the Client Policy; the contract you enter into is in the General Terms.

What we do, and what we do not do

Novus Capital operates a crowdfunding platform. We bring borrowers and investors together, underwrite and list loans, administer payments, and pursue recovery when a borrower defaults.

We do not lend you money and we do not borrow from you. We are not a party to the loan — the loan is between you and the borrower.

We do not give investment, legal or tax advice, and nothing on this website is a personal recommendation. Whether a loan suits you is your decision.

We do not guarantee any return, any repayment, or that a loan will be funded.

Questions and complaints

If anything here is unclear, ask us before you invest — the contact details are on the Contacts page.

If you are dissatisfied with our services you may complain free of charge. The procedure, and what to put in a complaint, are set out in the Client Policy.