Invoice financing Crowdfunding is a cash flow solution that enables businesses to get advances on money owed by customers upon completion of goods or rendered services, without waiting for the long payment terms that can be from 30 days to 180 days.

Invoice Financing Crowdfunding operates when a business decides to submit their invoices (upon completion or goods or rendered services) to raise funds from investors via crowdfunding platform providers such as CapBay. CapBay then takes the task of collecting the receivables as and when they fall due.
When you provide goods or services to a customer on credit, usually you have to adhere to an agreed payment term ranging from 30 days up to 120 days to receive your payment.

With Invoice Financing Crowdfunding, you can get instant upfront payment of 80% of the invoice amount without having to wait for the payment terms from your customer. You can have full control of your receivables without any worry!

Refer to the illustration below to understand how Invoice Financing Crowdfunding works with CapBay:

CapBay’s Invoice Financing Crowdfunding solution is an optimal approach for your businesses to improve cash flow as CapBay disburses payment within 48 hours to the issuer. It is also a great way for your business to fund the operating expenses without taking additional financing which can lead to bad debts. Businesses can consider the following before they opt for the type of Invoice Financing Crowdfunding that suits their business needs:

 

• Crowdfunding whole ledger or only a few invoices
  Putting the whole ledger with CapBay but only crowdfunding part of the invoices, or do the whole ledger and access more cash flow.

• Credit control
  Some platform providers will insist on managing credit control themselves which could affect and damage the customer relationships.

 

You can apply for Invoice Financing Crowdfunding with CapBay if:

• Your business is  providing services or goods to other Thailand businesses on credit terms (Business-to-Business nature).
• You have mid-to-large size private corporation(s) as customer(s).  
• Your business has an annual revenue of more than THB 1.5 million.
• Your business is a Thai registered business (Co., Ltd., or a non-listed Plc.).
• Your business is majorly owned by Thai (more than 51%) and has been in operation for at least 1 year.

*You may also get a quote from us even if you do not meet either one of the required criteria stated here. We can’t promise that we will be able to approve your application but we will consider your application, subject to a case-by-case basis.

CapBay will fund up to 80% of your invoice value. We are able to offer an invoice financing limit from THB 350,000 (minimum) and up to THB 12 million (maximum). The tenure of the facility can range from 30 days up to 180 days.

Generally, application processes may (from application to approval) take as quick as 5 business days and up to 2 weeks upon complete submission of documents required. To speed up your application process, start preparing your documents as early as possible.

For onboarded clients of CapBay, you will receive the advance cash as quick as 48 hours upon submission of invoices in our platform.

For new clients, there will be an extra onboarding process which takes about five (5) working days.

 

• Sign up fee: Processing Fee, 1.00% – 3.00% of approved limit
• Platform Fee: Origination Fee: 0.50% – 1.50% on Invoice Amount
• Discount Fee: 0.50% – 1.75% per month on financing amount (6% – 21% per annum)
• There are no other hidden charges or fees aside from the ones stated. Stamp Duty & Legal Fees are born by CapBay.

The key reason why Construction companies seek fund is due to its specialized nature of diverse tasks involved in the building process, and the involvement of the main contractor to work together with a number of subcontractors, which leads to delays in payments.

Main contractors are large companies that usually have wider access to financing. Besides that, they are also in a position where they don’t need to hold much working capital themselves as they don’t pay subcontractors until they are paid by their client.

Normally, subcontractors are smaller companies and they need huge working capital to pay for purchasing building materials and labors prior to being paid by the main contractor. The issue which construction companies face is the limitation of fund options because of the challenges that platform providers face in underwriting SMEs.

It’s common to see manpower agencies seeking to get crowdfunding due to the lengthy payment terms to be paid for their services when contractors are paid monthly but clients pay on specific payment terms. Hence, agencies often face obstacles in cash flow management and require crowdfunding to reduce their cash flow gap.

The Engineering industry often faces the common problem of delayed payments from the main contractor. Besides that, engineering companies may need the initial funds to purchase materials such as CCTV, wiring, light bulb, and other relevant materials to operate their business.

Manufacturing companies extend their payment terms in order to build a strong relationship with customers. As a result, they face longer payment terms after completion of work and during that time, they would be facing critical shortage of cash flow. They experience cash flow challenges due to the large volume of orders, leasing commitments, and others. A high volume of regular invoices results in restrictions in business growth especially in a highly competitive sector as the payment terms are on credit. Hence, invoice financing crowdfunding can solve the liquidity problem of their cash flow.

Invoice financing crowdfunding is a way for businesses to fund cash flow by submit their invoices to raise funds from investors via crowdfunding platform providers at a discount. The provider will take the role of managing the sales ledger, credit control, and be responsible for chasing payment from your customers. Factoring facility arrangements tend to be restrictive and you will be entering into an assignment of payment account at your customer side. It may also lead to the aggressive chasing of outstanding invoices from your customers.

Banks Overdrafts (OD) usually bears a lower interest rate than Invoice Finance Crowdfunding but this does not necessarily mean you pay less interest. For example, for an OD facility of THB 7.5 million, a bank can ask you for THB 3.25 million as a fixed deposit which means you are only borrowing THB 3.25 million from the bank.

However, the Bank will charge you for the whole THB 7.5 million drawn-down facility. Therefore, you are paying twice the interest for the THB 3.25 million borrowed. With CapBay’s Invoice Financing Crowdfunding, you are only charged for the THB 3.25 million you have borrowed.

In Term Loan Crowdfunding, say Company A takes a clean loan at 8%. It needs to pay 8% for the whole year even if they do not use the facility for some months during the year.

As for Invoice Finance Crowdfunding, say Company A takes invoice financing crowdfunding at 12% per annum. This amounts to 1% interest per month. However, if Company A only needs to use Invoice financing crowdfunding twice in that year, it only needs to pay 1% for each month depending on the invoice tenure. Company A is not required to pay interest for the months when the facility was not used. Invoice financing crowdfunding only charges when it is being used.