MoolahSense provides Investors with the opportunity to invest in SMEs by financing their business loan request and/or invoices in exchange for a fixed rate of return on their investment capital.
An investment in a business loan entails investing in a business that pays interest on your investment loan. These investments could be either secured or unsecured. A secured business loan involves the business pledging a collateral (e.g. property, accounts receivables, vehicles, furniture and fittings, etc.) in return for a loan. For an unsecured business loan, the business is not required to pledge a collateral to obtain a loan.
MoolahSense requires each business that raises capital from its Investors to provide at least one personal guarantor for the loan. The loan tenure of a business loan ranges from 3 months to 24 months. The repayment frequency of the loan principal and interest will depend on the loan structure.
Investing through financing an SME’s invoice provides immediate capital to the latter who obtains financing of their tax invoices for cash. No assignment or transfer of the invoice is carried out. Instead, the invoice provides an indication that the SME is likely to receive an inflow of cash (i.e. the payment from the SME’s customer) on the payment date of the invoice, which will in turn provide cash for the SME to repay the invoice financing loan.
The tenure for financing an invoice typically ranges from 15 to 90 days. The terms of the invoice financing loan provide for the principal and interest to will be repaid to investors on the maturity date of the invoice financing period, which is linked to the payment date of the invoice.