Lendahand currently has investments available in Euros (EUR) & U.S. Dollars (USD), with USD being a new addition to our portfolio.
Lendahand is now offering investments that will be held in U.S. Dollars. These investments work a bit differently from our previous investment offerings and carry an inherent currency exchange risk.
How USD Investments Work
Making investments in USD projects work largely the same as all of our other projects. Investors can make investments in projects in increments of €50 and all payments will be made in EUR, via any of our currently available payment methods.
How USD Conversions Work
Lendahand will be working with IbanFirst as our partner on currency exchanges. On the last business day of every month, IbanFirst will give Lendahand a conversion rate that will be fixed for the next 30 days. That fixed conversion rate will be used on all transactions in the following month, including investments in projects once they are fully funded on the 1st, as well as repayments coming back from companies to our investors around the 15th.
Once your investment in a USD project is confirmed, the money will be held in EUR along with all other investments in that project until the 1st day of the following month after the project is fully funded. On that day, the total sum in EUR of the fully funded project will be converted into USD at the exchange rate that was set prior by IbanFirst.
How USD Repayments Work
After companies make their repayments, the USD amount will be converted back into EUR using that exchange rate via IbanFirst that was fixed on the last business day of the previous month. On each repayment day, around the 15th of each month, the repayment amount due to you, principal and interest, will be deposited into your Lendahand wallet in EUR.
Due to the higher interest rates in the U.S. market, the interest rates of USD projects will be around 0.5%-1% higher on average (after conversion costs) for all USD projects, compared to similar EUR projects. This difference can go up or down over time depending on interest rates in the U.S., however, it’s worth noting that interest rates in the U.S. have always been higher than in the EU in recent history.
Important to note, just as in EUR projects, once the interest rate on a particular project is set, it will not change throughout the life of the project.
Currency Conversion Risk
It is important to note that investors carry currency risk when making investments in USD projects. Due to constant currency value fluctuations, you may receive a less favorable exchange rate on the day of your repayments than you received on the day your initial investment was converted from EUR into USD. Vice versa, you may also receive a more favorable exchange rate at the time of your repayments as well.
Please consider the added risk of investing in USD projects before adding them to your Lendahand portfolio.
Tracking Your USD Investments
You can view all of your USD investments in your MyLendahand dashboard. After you make an investment but before the project is fully funded, you will see your investment in the EUR amount you invested. As soon as the project has been fully funded and the first conversion into USD has occurred, you will then see your investment in USD in your dashboard.
Almost all of the investments in our portfolio up to this point have been held in euros, and the process of investing in euro projects for Europeans is relatively straight forward.
How EUR Investments Work
Simply decide how much you want to invest in a project in increments of €50 and pay for your investment in euros via any of our accepted payment methods. All repayments in EUR projects will always be in euros.
There are no conversions or currency exchange risk. Simply make your investments and track them in your MyLendahand dashboard. To learn more about investing in crowdfunding projects with Lendahand in general, visit our How it Works page here.