Some risks are inevitable and have to be accepted with all kinds of investing. Although by lending money to Quanloop on this Platform, there is no direct risk of losing your investment, there are still some risks associated with the investing in general. As a result of this we would like to outline some of such general risks involved when investing, also mark some general guidelines to follow in order to help you make an informed decision when investing your money on this Platform.
Before you invest on this Platform, please familiarise yourself with the process of investing on this Platform. The same rule applies when investing on any other platform. It helps to prevent the irrational decisions, expectations or fear regarding the investing process. For that purpose, we have prepared and published several documents to which you have access on the Platform.
Another general rule is that a decision to invest is a personal decision of every investor who ultimately takes responsibility for it. Every investor is in a different position regarding its circumstances and possibilities to invest. Therefore, every investor has to evaluate the possible risks associated with a particular investment and consider their potential impact and consequences to the investor.
Below we have outlined some of the general risks involved when investing. Please note that this is not an exhaustive list. We also point out that this document cannot be considered as legal advice or investment advice or recommendation to invest on the Platform.
There is a market risk which is the possibility of an investor experiencing losses (decline in the value of an investment) due to factors that affect the overall performance of the financial markets in which the investor is involved. This risk is associated with events such as an economic downturn, a financial crisis, exchange rate fluctuation, natural disasters, terrorist attacks or geopolitical events, etc. Because it usually affects the whole market, it is more difficult to hedge.
There are also legal or regulatory risks that are associated with the fact that legislative acts regulating different investment activities or channels or companies or even the whole industry, may change during the investment period. Changing regulations can affect the costs of various operations (the main risk is the increase in the prices), also introduce different legal and administrative obstacles, etc. Because the changes in this area are made due to many reasons, there is usually a little possibility to avoid them or the application of them. Still, it usually takes a long time, and much outreach beforehand before the changes come into force; therefore, the Platform and the investor can be prepared at an early stage.
There is also a currency risk (or exchange-rate risk), which arises from the change in the price of one currency in relation to another. This Platform operates only in the euro currency. The described risk may not occur on the Platform during the investing process but may become relevant in processes before or after investing money on the Platform. The best way to manage this risk is to learn about the actual exchange process if the use of it is necessary for you at some point before or after investing on the Platform.
There is a political risk which is a change of investment value or terms changing due to the political changes or instability in the countries. It could stem from a change in government, legislative bodies, other foreign policymakers or military control, etc.
There is also a concentration risk which is related to your overall investing principles. This risk can occur in a situation where the investor’s investment portfolio is focused on one type of investment. The best way to manage this risk is to diversify your investments (for example, between different loans, in general between different companies, sectors, asset classes, etc.).
There is also an operational risk which is the fact that Platform may not be able to continue its business and to offer the investment opportunity and the company behind the Platform would be liquidated. We take and use every appropriate step and instrument possible (including regular inspections and controls, auditing, the publication of information, asking and giving feedback, also using skilled personnel and advisors and using up-to-date and secure technology and processes, etc.) to assure the transparency, legitimacy and sustainability of the Platform and its activities (technical, marketing and legal aspects, etc.) and to exclude the occurrence of the described risk.
Lastly, the best available option to manage any risk or its impact is to consider very carefully and thoroughly whether the investment is suitable and affordable considering the investor’s circumstances, financial engagements, resources and abilities. There is a good rule of thumb that the investor should not invest more money than he/she can afford to lose without altering his/her standard of living.