Profit Farm, Crowdfunding for NPLs, Obtains Authorization Under EU Regulation

After a long and complex authorization process, Profit Farm Srl has obtained authorization from CONSOB, after consulting the Bank of Italy, to operate as a European Crowdfunding Service Provider (ECSP) pursuant to EU Regulation no. 2020/1503.

Profit Farm: A unique proposition in the European crowdfunding landscape

Profit Farm, founded in 2020 by Lawyers Cristiano Augusto Tofani and Francesco Sibilla with the support of Roberto Macina ‘s Venture Builder WDA , is the first authorized platform that offers financing for credit purchase and collection projects (NPL).

The credits subject to financing are all characterized by objective certainty, enforceability and liquidity. These credits, mainly linked to the Public Administration or to private individuals with solid real guarantees, offer investors attractive returns in a short time, minimizing the risk of default (so far equal to 0%).

This very feature represented a central element in the complexity of the authorization process, constituting an unprecedented fintech innovation in the European lending crowdfunding sector.

How Profit Farm Works

Only credit transactions that need to be settled in the short term are published on the platform, for example, since the related legal process has already been concluded with an uncontestable ruling in favor of the creditor.

Or simply having to wait for the timing of the distribution of the sums already present in the procedure accounts (so-called “cash in court” – literally “money in court”).

Furthermore, the legislation on late payments in commercial transactions, in implementation of a Community directive, requires all debtors, including the Public Administration, to pay the creditor, in addition to the principal amount due, also annual default interest, equal to the ECB rate plus a spread of 8 percentage points.

A company that has a “secured” credit towards a Public Administration, or towards an equally solvent public or private entity, and that has successfully exhausted the entire legal process of ascertaining the credit itself, can therefore propose its operation on Profit Farm.

Naturally, before approving its publication on the platform, Profit Farm analysts proceed with a rigorous preliminary analysis.

The authorization process

The success of the authorization was made possible by the work of a multidisciplinary team of legal and accounting experts who accompanied Profit Farm in all phases of the process.

Studio Giliberti Triscornia e Associati , with the team led by Partners Carmine Oncia and Giuseppe Cadel, with Associates Federica Sinesio and Silvia Dalla Quercia , managed the issues relating to the analysis of operations and aspects of governance and corporate law.

LEXIA, thanks to Counsel Pietro Massimo Marangio and Orietta Nava , with Associate Gabriel Zurlo Sconosciuto, took care of the regulatory aspects and coordinated relations with the Supervisory Authorities.

Conformis in Finance with Partner Fabio Greuter, supported Profit Farm in drafting internal policies and procedures.

Comments from the protagonists

The Chairman of the Board of Directors, Attorney Cristiano Augusto Tofani, stated: “ We are extremely proud to have reached this important milestone, which allows us to look to the future with ambitious collection objectives. Our innovative business model, already validated by the significant reimbursements made, demonstrates its solidity and attractiveness.”

With the ECSP authorization, Profit Farm positions itself as a protagonist in the European lending crowdfunding landscape, consolidating its leadership thanks to a unique business model.

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(Featured image by Guillaume Perigois via Unsplash)

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