Project B11G has partnered with blockchain firms Blockhive, Agrello, Oblicity and CoinMetro to launch a pilot real estate crowdfunding project on April 1st, using the blockchain for loan procurement. Company New Page OÜ is offering creditors an interest rate of 14% per year, in exchange for a loan, with interest and principal paid out in STASIS stable coins (EURS).
Real estate development firm Future Invest, which has over 25 years of experience in the field, has launched a subsidiary called New Page OÜ, which will use blockchain technology to crowdfund real estate projects. New Page’s launch of Project B11G marks the launch of the first-of-its-kind real estate crowdfunding project in Europe.
The first property being developed is a multifunctional industrial facility in Estonia, designed for small and medium-sized companies. Starting April 1st, 2019, the development team is looking to raise 1.1m EUR and is offering lenders an interest rate of 14% per year, with a maturity date of two years. Powered by blockchain and made possible with digital ID verification, investors world-wide will use digitized human-readable contracts to sign legally binding loan agreements.
Last year, blockchain firms Blockhive and Agrello formed a joint venture called Tokenote to offer a fundraising solution named ILP (Initial Loan Procurement). On January 26th, 2018, Tokenote launched the first pilot to fund Blockhive’s operations. The pilot project deployed the first successful use-case of Agrello ID, Agrello’s digital verification system, which allows people and companies to establish legally binding agreements over the blockchain. In March of this year, real estate development firm Future Invest OÜ and it’s newly founded venture New Page OÜ will carry out Tokenote’s first third party pilot called “Project B11G”.
B11G Quick Facts
Project Summary: A multifunctional industrial complex development for small and medium-sized businesses.
Address: Betooni 11G, Tallinn, Harjumaa
Total plot size: 10,092 m2
Total building size: 4,126 m2
Number of leasable units: 38
Total Budget: 3.6m EUR
Fundraiser Format: Initial Loan Procurement (ILP)
ILP Fundraiser Target: 1.1m EUR
Interest rate offered: 14% per year
Loan Maturity: 24 months
Token symbol: B11G
Fundraiser Starts: April 1, 2019, 10:00:00 (GMT + 2)
Fundraiser Ends: April 30, 2019, 23:59:59 (GMT + 2)
Minimum Investment Amount: 2 ETH*
*Approx. 240 EUR at time of press release.
What is an ILP?
The ILP (Initial Loan Procurement) is an alternative financing solution for businesses and entrepreneurs who wish to issue debt to raise money via the blockchain. People are given a chance to be creditors and provide companies with loans, based on an underlying, digitally signed, human-readable loan contract. This opens up an international market and makes it easier to obtain project financing;without borders. The ILP solution provides borrowers with a means to benefit from the global scale of the cryptocurrency market, without the need for launching an ICO or issuing a security token. ILPs allow for established companies to finance projects, set up special purpose vehicles or fund diversification strategies.
How is ILP different from an ICO?
For the sake of comparison, the average blockchain investor will liken the ILP to an alternative to the ICO. The ILP, like the ICO, leverages the accessibility and cost-savings of cryptocurrency-led financing. However, it is unlike an ICO in the sense that the transactions occur between lenders and borrowers, as opposed to stock issuers and shareholders. Furthermore, Agrello’s digital ID solution enables lenders to sign legally binding digital contracts, which give them a claim to the principal amount borrowed and the interest payments agreed to in the contract. Lenders receive tokens that provide them with access to liquidity and facilitate the transfer or trading of contracts. The tokens are linked to the loan contract, which lenders sign digitally via Agrello ID. The tokens also represent the value of the underlying contract, which acts as a claim against the principal loan amount and interest payments for lenders. By transacting via loans, the ILP adds an additional layer of security to the creditor, as creditors are always paid out before any shareholders.