Capital Springboard – backed by London-based investment advisor Centurion Portfolio Managers – has announced the Singapore launch of its peer-to-peer (P2P) financing platform for accredited investors seeking high returns on short-term invoices.
With offices in Singapore, London,UK and Dublin, Ireland, the firm claims to have facilitated trades worth S$80 million ($60 milion) from its Singapore pilot project.
According to a media statement, the company claims investors using the platform can benefit from annualised returns of 11 per cent to 25 per cent, depending on the grade of risk of the invoice, during a 90-day investment window. A higher grade of risk translates to higher returns.
Operating in the invoice financing space – with invoice financing a form of factoring – the Springboard Capital provides a platform for businesses to trade their outstanding invoice(s) or accounts receivable to investors at a discounted price to obtain cash immediately, rather than waiting for their vendor to pay on the due date.
Subsequently, invoice trading platforms like Capital Springboard then collect payments on the due date and disburse the proceeds accordingly to investors and SMEs. It permits businesses to convert unpaid invoices into cash up-front, while easing cash flow challenges.
Anecdotally, businesses, using such platforms, tend to receive 70 per cent to 90 per cent of the invoice values up-front which they use for working capital purposes, without impacting the credit rating or balance sheet.
Some players in the P2P Invoice finance sector are Market Invoice and Platform Black in the UK, as well as The Interface Financial Group, FastPay, C2FO and P2Bi in the US. Locally, Capital Springboard will be competing with the likes of InvoiceInterchange.
In terms of the benefit to investors, as an asset class it provides increased liquidity due to the short-term nature of the financial product and diversifies the risk. However, it also represents a sophisticated and structured specialty finance service and presents challenges in terms of credit underwriting and risk management.
It has also seen significant growth in recent years, with startups utilising it as a funding option given its growth to fill the gaps in funding options created since the global financial crisis of 2007/2008.
Springboard Capital’s model
Through this platform, Capital Springboard claims to innovate the way small-to-medium enterprises (SMEs) fund their growth, via providing accessible capital upon three days of the invoice being successfully submitted. SMEs using the platform will incur a one-off origination fee of 2 per cent of the amount advanced to them.
To qualify, SMEs must have an invoice minimum of S$25,000, be registered in Singapore and in business for at least a year. According to Springboard Capital, they will also vet these SMEs for creditworthiness to minimise risks.
Roger Crook, CEO of Capital Springboard says, “Singapore is a global financial hub and a market with a sizable SME sector that requires access to capital. Our Singapore pilot proved very encouraging with over 1,300 invoices worth $80 million funded.”
Crook was formerly chief executive of DHL Global Forwarding and resigned in 2015, citing personal reasons. However, at the time, questions were also raised over his role in an IT transformation project within DHL.
Accredited Investors can open a Capital Springboard trading account which is held by escrow agent, Vistra Trust (Singapore) Pte. Limited, regulated by the Monetary Authority of Singapore (MAS). The minimum investment ticket is S$50,000 and investors can withdraw their undeployed funds at any time, according to the company.