CROSS-BORDER European property lender EstateGuru has secured its first ever institutional credit line to support its lending in the Baltic states.
The firm has established an agreement with Germany’s Varengold Bank, which recently agreed a fresh funding deal with UK business finance provider MarketInvoice.
EstateGuru said on Wednesday that the deal shows that a mutually beneficial cooperation model between a traditional financial institution and a fintech company is possible.
“This is a clear sign that building a diversified portfolio of property backed loans is a very appealing instrument for institutional investors,” said EstateGuru chief executive and co-founder Marek Pärtel.
“Our Pan-European retail investor base is still the main source of capital.
“However, establishing a cooperation with Varengold Bank and other institutional investors enables EstateGuru to grow faster by offering a wider variety of property backed loans to our entire investor base and raise the flexibility of loan terms to our borrowers.”
EstateGuru has more than 11,000 investors from 45 countries and has funded over €50m (£44m) of secured property loans in Estonia, Latvia, Lithuania, Finland and Spain.
Pärtel said EstateGuru plans to expand into more European markets.
“Without a doubt it is an important milestone for EstateGuru in moving closer to our goal of becoming the leading provider of flexible property-backed finance solutions in Europe,” said Pärtel.
“We still see many small- and medium-sized enterprises and property developers who are struggling to get property backed finance from traditional financial institutions due to highly regulated and lengthy processes.
“EstateGuru has a clear vision and roadmap to bridge the gaps left open in the property finance industry.”