Enky Invest Expert Review

Enky Invest Expert review

Investors in Enky, invest in projects via bonds that help to finance the purchase, leasing or rental (subscription) of office furniture.

So far the company has attracted 2000 investors who have put €2.50 million into more than 57 Enky Invest projects.

The firm’s ethos is summed up by this quote from its website

“Our mission is to provide innovative alternatives to fast furniture that are so good people will want to change.”

How does Enky Invest work?

The firm works with furniture producers and designers who create sustainable well well-designed furniture for the end client and provides them with a series of alternatives ranging from financing for an outright purchase, leasing and leaseback or rental arrangement known as FAAS, or Furniture As a Service.

Enky Invest’s end customers are typically corporates and start-ups looking for something alternative both in their office furniture and the funding for it.

Potential returns

Investors who help to crowdfund an Enky project through the purchase of bonds can expect to receive a projected return of between 7.00% and 8.50% per annum. The minimum investment period is 12 months.

Though Enky points out that leaving money invested for longer will provide Crowdfunders with the opportunity for higher returns.

For example, a deal might be done over a five-year, or 60-month period, on a purchase or lease of just under €98,000 of goods, with an interest rate of 8.50%.

Meaning that the end customer pays a total of €125,000 for their furniture with interest.

Investors benefit from the financing rates and the chance to access eco-friendly, sustainable deals that are backed by real assets and what Enky calls “consistent demand”.

There is also an opportunity to help Enky’s own purchase of new and used office furniture for its stock.

Risks

As with any investment or crowdfunding project, there are numerous risks.

The most obvious of which is that the end customer’s business gets into trouble and they can’t keep up the payments on the finance.

The finance may well be secured by the furniture but repossessing the furniture, in the event of a default, particularly if the end customer goes into administration, is likely to be time-consuming.

And of course, the residual value of that furniture will be less than the original purchase price ,and it’s likely to only defray a fraction of the investment and interest forgone.

In the firm’s own documents, it lists capital loss, lack of liquidity, client default, execution failure and competition as the risks involved in investing in Enky.

In the event of Enky going out of business, investors should, in theory, be able to continue to receive payments from the end purchasers/lessors.

However, you should bear in mind that Enky Invest is a French company that is owned by a Belgian parent and thus operates under French financial codes.

Alternatives

As interest rates are so high at the moment, there are plenty of potentially safer alternatives, asmost brokers will pay you a high rate of interest on your uninvested cash.

If you are looking for income-generating investments, regulated bond brokers offer corporate bonds listed on the London Stock Exchange are a good alternative to Enky. There are tradable, and many pay a higher rate of interest. The highest paying corporate bond on the LSE available to buy through Hargreaves Lansdown at the moment is the Metro Bank Holdings 30th April 2034 trading at 78.5p pays a coupon of 14%.

If you are prepared to take on a little more risk, WiseAlpha offer fractional bond investing on professional-grade bonds. For example, you can invest as little as £100 in the Travelex  05 Aug 2025 bond which pays 12.5%, which usually has a minimum order size of £100,000.

Final thoughts:

If you do invest with Enky Invest, then you should probably adopt the attitude of a VC or PE manager, invest in the expectation that some of the projects won’t work out and that there will inevitably be defaults and failures along the way.