SINGAPORE - Crowdfunding platform MoolahSense has launched an invoice financing service, to help small and medium-sized enterprises (SMEs) looking to raise short-term financing of more than $15,000, it said on Tuesday (Apr 11).
Invoice financing, which is also offered by many traditional banks, help SMEs to ease cash flow problems.
For example, say an SME has supplied goods to a client and that client will pay it $50,000 in 60 days, but the SME boss needs to pay his suppliers and workers within the week.
He could submit the tax invoice he received from the client to MoolahSense, which will verify it, and then receive a loan of up to 80 per cent of the invoice amount - in this case $40,000, from the registered investors on MoolahSense's platform.
The tenure for such invoice-supported loans typically ranges from 15 to 90 days, maturing on the payment due date of the invoice.
To qualify, SMEs must have tax invoices with fixed payment terms of 15 to 90 days from their customers.
They must also be Singapore-registered companies or limited liability partnerships and have an annual revenue of at least $100,000 and at least 12 months' operating history.
MoolahSense chief executive Lawrence Yong said: "Over the past two years, we have focused on helping businesses whose financing needs are underserved. Our experience thus far has been satisfactory in curating performing loans. With this new solution, we aim to make business financing even more inclusive by addressing a new segment of customers whose profile may be ignored by traditional lenders."
From an investor perspective, the tax invoice provides a degree of assurance that the SME borrower will have incoming cash flow from its customer to meet the repayment due under the invoice-supported loan, he added.
In addition, as an invoice-supported loan would mature in 15 to 90 days' time, investors would be able to receive returns in a relatively shorter period of time.
MoolahSense is gearing up to launch more financing products to assist SMEs in raising capital, the firm said.
The company is also looking to scale its operations and expand its footprint overseas, with a focus on introducing the innovation of marketplace lending into Southeast Asia.