UAB HEAVY FINANCE LOAN RESTRUCTURING POLICY
1. GENERAL PROVISIONS
1.1. This Loan restructuring policy („Policy“) sets out the main principles for modifying loans provided for borrowers (“Borrowers” or “Project owners”) via the crowdfunding platform (“Platform”) operated by crowdfunding service provider UAB HEAVY FINANCE entity code 305576227, address Birutės str. 18-1, Vilnius, Lithuania (“Company” or “Operator”), for exercising the main purpose for the loan restructuring – to simplify the possibility for Project owners to meet their obligations under the loan agreement considering their current loan repayment capacity, whilst improving the eventual returns for the Platform investors (“Investors”).
2. DEFINITIONS
2.1. Borrower or Project owner shall mean the party to the Loan Agreement, to which a loan is granted under the internal Company’s procedures;
2.2. Company or Operator shall mean the crowdfunding service provider UAB HEAVY FINANCE entity code 305576227, address Birutės str. 18-1, Vilnius, Lithuania, that is the operator of crowdfunding platform ;
2.3. Interest shall mean the remuneration for the granted Loan Amount, which accrues for each calendar day on the actual outstanding Loan Amount, and it shall be considered that a year has 365 days, and a month consists of the number of calendar days;
2.4. Investors shall mean the persons (funders) which are the Party to the Loan Agreement and have granted the Loan Amount to the Borrower by means of the crowdfunding platform . The Lenders are represented by the Operator;
2.5. Loan restructuring shall mean an update of the previous loan agreement signed between the Investors that are represented by the Operator and the Project owner, in cases when the Project owner is considered unable to comply with the obligations disclosed in this agreement, due to its reasons resulting in insufficient loan payment ability and that would not have been granted had the Project owner not been experiencing such difficulties.
2.6. Payment schedule shall mean the schedule according to which the Borrower shall repay the Loan Amount and pay the Interest and/or other amounts payable under the Loan Agreement as known in advance. The Payment Schedule shall be provided to the Parties on the Platform;
2.7. Platform shall mean the crowdfunding platform available at operated by the Operator, through which the Lenders (investors) grant the crowdfunding funds to the Borrower;
2.8. Policy shall mean this Loan restructuring policy;
2.9. Other capitalised words used in the Policy shall have the meanings assigned to them in the Regulation (EU) 2020/1503, the laws of the Republic of Lithuania, resolutions of the Board of the Bank of Lithuania and other relevant legal acts.
3. LOAN RESTRUCTURING PRINCIPLES
3.1. The Company follows these general loan restructuring principles:
3.1.1. Investors priority principle. When assessing the Loan restructuring possibilities shall always act and make decision in the best interests and in favour of the Investors and shall operate to the best of its standards as a provider of crowdfunding services.
3.1.2. Information provision principle. The Operator shall ensure that explanations on loan restructuring measures available for the Project owners are expressed publicly in the Platform, clearly and in plain language. In cases, when a decision is made to restructure a loan, the Platform shall ensure that key characteristics of the restructured loan and an updated loan agreement is presented to the Project owner.
3.1.3. Consideration principle. The Operator on receipt of a request from the Project owner, shall always evaluate the proposal for restructuring of the received loan and shall ensure a constructive and proper evaluation of the Project owner’s capabilities to repay the restructured loan in accordance with the Company’s internal procedures and shall make a separate decision regarding each loan restructuring.
4. CIRCUMSTANCES TO RESTRUCTURE THE LOAN
4.1. Project owners may apply for loan restructuring, in cases when, in the opinion of the Project owner, it is highly unlikely that the Project owner will fully meet its obligations to disburse the loan granted through the Platform.
4.2. In case described in Paragraph No. 4.1, Project owners shall provide a loan restructuring application on prescribed form provided in the Annex No. 1 of this Policy. The application form must be completed truthfully and signed by both the Project owner and the security measures provider (when relevant).
5. INITIAL ASSESMENT OF APPLICATION FORM AND POTENTIAL RISKS FOR LOAN RESTRUCTURING
5.1. Project owners shall be required to provide documentary evidence to support the Project owner’s claim that the Project owner will fully meet its obligations to disburse the loan granted through the Platform.
5.2. Upon the receipt of the loan restructuring application, the Company shall firstly identify whether:
5.2.1. the information provided in the application is provided fully and comprehensively;
5.2.2. the Project owner has submitted all the intended supporting documents, to justify the necessity to restructure the loan;
5.2.3. the information provided by the Project owner is within the application form provided in the Annex No. 1 of this Policy and etc.
5.3. If the Company comes into a decision that the application does not meet the requirements set out in Paragraph No. 5.2 of this Policy, the Company shall return all the submitted documentation to the Project owner within 5 (five) business days from the day of their receipt. When returning the submitted documents, the Operator shall indicate the reasons for refusing to assess the application. Project owner shall not be prohibited to re-apply for Loan restructuring, if the Company comes into decision disclosed in this Paragraph.
5.4. If the Company comes into a decision that the application meets the requirements set out in Paragraph No. 5.3 of this Policy, the Operator shall start the risk identification process and assess any risks arising both for the Company and for the Investors if the loan may be restructured. The Operator initiates a revised Project owner’s reliability and the risk identification measures of the Project owner shall mostly rely on the revised result of the Project owner’s reliability.
5.5. The Company shall immediately dismiss the Project owner’s loan restructuring application in cases when:
5.5.1. the Project owner’s credit risk rating is assigned a to a rating of “D” (excessive risk), under the procedure disclosed in the Operator’s internal Project owner’s reliability assessment rules;
or
5.5.2. the information available to the Company gives reason to believe that such loan restructuring would not improve or endanger the interests of the Investors.
5.6. If the Company’s risk identification and assessment procedure for the loan restructuring shall not present any unacceptable results under the Company’s internal risk management rules, the Company enters the phase of the potential loan restructuration evaluation. The Operator shall inform the Project owner via the Platform or via email that his application is being evaluated no later than 1 (one) business day that his application is being evaluated and start the evaluation of loan restructuring application in accordance with the provisions disclosed in Chapter 6 of this Policy.
5.7. If the Company’s risk identification and assessment procedure for the Loan restructuring shall present unacceptable results under the Company’s internal risk management rules, the Company shall deny the Project owner’s application and inform the Project owner in writing immediately, but no later than within 1 (one) business day after the identification of such risks about the negative decision to restructure the loan. Project owner shall not be prohibited to re-apply for loan restructuring, under different loan restructuring measures if the Company comes into decision disclosed in this Paragraph.
6. EVALUATION OF LOAN RESTRUCTURING APPLICATION
6.1. Evaluation of the loan restructuring shall be based on the following aggregate of criteria:
6.1.1. justifications that the Project owner present to the Company that explain the necessity to restructure the loan whilst applying for the loan’s restructuring;
6.1.2. loan repayment history of the Project owner;
6.1.3. Project owner’s capacity to repay the loan under a restructured loan Payment schedule and updated interest;
6.1.4. Project owner’s credit risk rating (if the rating is greater than the rating of “D”) provided in accordance with the Company’s internal procedures;
6.1.5. Presented additional Performance security measures (if any);
6.1.6. size of increase of the Investors’ returns in accordance with the restructured loan;
6.1.7. Other information or circumstances about the Project owner and (or) other aspects that the Operator identifies to be relevant when evaluating the application.
6.2. If the Company comes into a decision that any additional information or documentation is required in order to properly evaluate the loan restructuring application, the Company may contact the Project owner to gather such information and (or) documents.
6.3. After evaluating the criteria disclosed in Paragraphs 6.1.1 – 6.1.7 and (if relevant) additional information and (or) documentation provided in accordance to the Paragraph 6.2 of the Policy, the Operator may come into one of the following decisions:
6.3.1. to approve the Project owner’s application to restructure the loan;
6.3.2. to reject the Project owner’s application to restructure the loan.
6.4. If the Company comes into decision disclosed in Paragraph 6.2.1, the Company shall immediately, but no later than within 3 (three) business days after taking such decision, contact the Project owner and present an updated loan agreement and other relevant information and documents in accordance to the Company’s internal procedures, with a suggested restructured loan repayment procedure disclosed in an updated version of the loan agreement already concluded with the Project owner.
6.5. If the Company comes into decision disclosed in Paragraph 6.2.2, the Company shall immediately, but no later than within 1 (one) business day after taking such decision, inform the Project owner about the decision taken.
6.6. Project owner shall not be prohibited to re-apply for loan restructuring, under different loan restructuring measures if the Company comes into decision disclosed in Paragraph 6.2.2.
6.7. In cases when Project owner is granted a restructured loan, the Project owner may apply for a loan restructuring again only after one calendar year has passed since an updated loan agreement has been concluded with the Project owner.
7. FINAL PROVISIONS
7.1. This Policy shall enter into force on the date of its approval and may be amended or repealed only by the prescript of the Company’s manager. After any amendments, the latest version of this Policy shall also be published on the Platform (except for the appendices to the Rules).
7.2. The Company’s manager is responsible for the implementation of this Policy within the Company.
7.3. Every employee of the Company must be duly acquainted with this Policy.
7.4. The Company’s manager or his authorized person shall periodically, but not less than once a year, review whether the procedure and requirements set out in this Policy are sufficiently effective. In performing these functions, the Company’s manager or a person authorized shall:
7.4.1. periodically review the provisions of this Policy, propose how to improve the Policy, ensures its compatibility with other internal documents of the Company and applicable legal acts;
7.4.2. inform the Company’s employees about the new procedures implemented by the Company and advises them on the procedure for the implementation of specific provisions of this Policy;
7.4.3. constantly monitor changes in the relevant legal acts and, if necessary, immediately initiates amendments to the Policy in accordance with the changes in the relevant legal acts.
Annex No. 1
to UAB HEAVY FINANCE
Loan restructuring policy
LOAN RESTRUCTURING APPLICATION FORM