SmartFunding, a peer-to-business (P2B) platform that provides alternative financing solutions to small and medium businesses, has secured SG$700,000 ($492,396) in seed funding led by Fintech Asia Group, part of ASX-listed venture builder Fatfish Internet Group and Investorlend, an investment firm in Australia.
According to a press release, the P2B invoice financing platform bridges the SME funding gap by allowing them to sell their yet-to-be-paid invoices to investors who want to purchase future cash flows.
SmartFunding acts as a dis-intermediating platform matching SMEs with investors. It claims that investors on its platform stand to make high returns of between 20 per cent and 30 per cent in returns per annum through purchasing invoices sold by SMEs.
SmartFunding operates by sourcing for investors; conducting credit assessment of invoice sellers and invoice debtors (those to whom the unpaid invoice was issued); legal servicing and facilitation of transactions; fund disbursement and monthly payments collection; and bad debt resolution.
Sandra Ernst, CEO of SmartFunding, said, “We want Singapore’s SMEs to benefit from a flexible way to improve their cash flow. We look forward to working closely with our invoice sellers and investors to ensure that our platform is aligned with the interests of both parties, where risks are credibly managed and transparency is upheld.”
In addition to her current role, according to her LinkedIn profile, Ernst also heads Fintech Ventures at the Fatfish Internet Group. Given her extensive background in Islamic finance, it is likely that SmartFunding may target markets like Malaysia and Indonesia in the near future as it scales.
Given the possibility of a recession in 2017 and that the city-state’s open economy is likely to face short and medium term impacts from a forecasted slump in the global economy, coupled with restructuring, it is likely that invoice trading and investments will see a boost in the coming years.