Business

Brazilian startup Loft starts making loans with collateral in real estate

Recently, credit with lower interest rates has gained space in Brazil through startups

Loft's co-founders (from right to left) João Vianna, Florian Hagenbuch and Mate Pencz.
Loft's co-founders (from right to left) João Vianna, Florian Hagenbuch and Mate Pencz. Photo: Loft/Courtesy
  • 12 contracts have already been signed;
  • The company plans to generate up to BRL 70 million in loans with this format.

The Brazilian real estate startup Loft is creating a new collateralized credit, according to O Estado de S.Paulo. The loans can be granted based on any property located in a city with more than 50,000 habitants.

The media outlet reports that, according to the startup, 12 contracts have already been signed and demand has tripled amid the pandemic. The company’s expectation is to end May with ten agreements closed.

READ ALSO: Latam becomes the biggest airline in the world to file for bankruptcy

The loan with collateral in property has gained space in Brazil in recent years, especially by the action of startups: Creditas, Credihome and Bcredi have been active in the sector, which offers loans at lower interest rates than formats such as credit card and personal loans.

READ ALSO: Competitor of TikTok, Kwai exceeds 12 million daily active users in Brazil

On the other hand, the use of a property as collateral means that, in the event of default, the debtor loses the property. On Loft’s behalf, the real estate secured loan is made in partnership with Bcredi and CashMe.

The startup claims that it’s not interested in “keeping the properties” of the defaulters. Every loan made with Loft has a fixed rate of 1.14% per month, plus the Brazilian Applied Consumer Price Index (IPCA) of that period. By the end of the year, the company plans to generate up to BRL 70 million in loans like this.