Tag: short term loans
Investing: a sprint or a marathon?
Investing: a sprint or a marathon?
Beginner investors often get excited when faced with attractive opportunities to invest. They usually start by throwing a small amount of money (100-200 euros) in a specific asset on an investment platform such as Debitum Network. Then they forget about their initial investments and neither save nor contribute bigger amounts for further investments. It is natural to say, that the initial amount won’t create a financial miracle even if left invested for decades. We believe Investing is not a sprint, but a marathon and one should consider contributing regular amounts to create a fortune in the long run.
Do you have long term investment goals?
A serious investor will definitely have investment goals that would span a horizon of decades. They will have a plan on how to achieve their goals by mapping specific investment courses to follow, which would consist of smaller steps, such as regular monthly savings and investments into a diversified basket of assets. Let’s be realistic, a hundred euros can make you 10-15 euros a year and even if you reinvest them and the returns derived from them, it would still be meager profits at best in the long run. Take a look, at the table below and see for yourself how much you make if you throw in random 100 euros and leave for 1,5, 10 years without adding regular amounts, and what would be the results if you start with 100, 200, 500 and add equivalent amounts monthly for the same periods of time (on Debitum Network for an average interest of 10%).
It goes without saying, that a single investment without any regular contributions will not generate the desired outcome. It looks more like a gamble than a sound strategy to make money investing. On the other hand, small regular increments of money stashed and invested will create a sizable income within a decade.
It’s not about the size but consistency
What if you threw in 1,000 euros and left it on our platform to turn over? Would that make a big difference? Well, we did the job for you and the table below shows you that the desired outcome in investing comes when there are consistency and regularity. One should not get emotional about a one-time big amount as they will only slightly make the outcome better than a small one-time amount.
How to create a long-term investing plan?
When you sit down to make a long term investment plan you need to consider putting in the following parts into your plan:
- What are your expectations? (do you want to buy a car, house, store up a downpayment for a house, invest for retirement, reach a specific amount (100k euros), etc.
- What is your initial investment? (100, 200, 500, 1000 euros)
- What are your monthly contributions? (100, 200, 500, etc)
- What kind of assets you are going to invest in? (Short term: a few weeks, a few months. Long term: 5 months, 2 years, 5 years).
Long term investments require preparations, just like a long marathon does. It takes time to prepare and patience to commit to implementing your plan.
Create saving habits and invest patiently
It takes patience, courage, and stamina to save and invest long term. Yet, you have to remember a famous cliche that ‘Rome wasn’t built in one day”. Fortunately, if you do not give up and develop strong saving habits, you will eventually see returns grow, particularly, because you can earn compound interest on Debitum Network platform. Investing is not gambling, where you can shove all-in and expect to win a substantial amount. Returns come later. However, you should remember that you earn interest on Debitum Network from day one and since most of the assets are protected under a buyback guarantee the risk that you take are very low.
Comment from Eimantas Valancius – the Head of Operations Department
“Debitum Network is there to help you to achieve your long term investment targets. We have various tools such as an auto-invest plan that will save your time and do the job for you. You can invest manually too. Our assets are put into 3 categories according to risk classes. It means that whatever your risk tolerance is, you will find assets that fit your investment style, whether you are short term or long term investor. If you are interested, it takes just 1 minute to register on our platform. Then, deposit and you can invest right away. We have a special asset of the week to help you out. “
Top asset of the week
The top asset of the week is from our partner and loan originator. The borrowing company is a producer of electricity which has more than 340 thousand EUR in revenue, more than 60 employees and has been in business for more than 7 years. The Purchaser is a manufacturer of petroleum products, it has more than 4 billion EUR in revenues, employs more than 1000 people, and has been in business for more than 28 years. Sounds good enough? Check out the asset and if you like what you see, add it to your portfolio right away.
Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
Debitum Network at LendIt event
Debitum Network at LendIt event
Every year LendIt organizes one of the biggest events for innovation in financial services and lending. This year the event took place on the 19-20th of November in London. There were more than 1000 participants and over 150 speakers from 50 countries, including our own Martins Liberts. This year’s agenda was based on new developments in marketplace lending, credit & underwriting, financial inclusion, digital banking and the adoption of blockchain solutions in finance.
This time, the event got quite a lot of fresh perspective as the speakers were comprised of 40% first-time speakers, 35% women, 30% commercial banks & investors and 50% lending & fintech thought-leaders.
As almost half of the participants were from fintech industry, it is obvious that innovative fintech companies get stronger year by year and take a bigger market share in finance. The chart below shows share of attendees from five financial industries, Debitum Network representing Fintech. It proves the fact that interest in alternative lending is rising and platforms such as our own Debitum Network or Mintos, Twino, Funding Circle or Zopa will gain more and more traction in the future.
Data source: LendIt
The biggest industry – Fintech had also the biggest number of subsectors with a total number of 10 dominated by business lending, digital banking, and consumer lending. Debitum Network is part of Fintech specializing in providing short term loans for SMEs (Business Lending) around the world, thus among major players in the world of finance.
Data source: https://www.lendit.com/europe/2018
The banking sector was led by representatives from investment banking and commercial, regional banks – our main interest was to meet with institutional investors or private funds as they are investing in various assets available on platforms like Debitum Network. Our team members met quite a few members of bank associates and chatted about specifics of our loans, lending terms, interest rates, duration etc.
Data source: LendIt
Investing sector was also quite varied this year, steered by Private Equity and Venture Cap funds. Debitum Network team was there to discuss possibilities for private and institutional investors to diversify their portfolios and invest in short term loans for small businesses. A few of them expressed interest in our business model and intention to start investing in loans right after the conference.
Data source: LendIt
Debitum Network – Gold sponsor of the event
This year, Debitum Network was a Gold sponsor of the event. On the 18th of November, 8 members of our team went there to participate, have business meetings, demonstrate to hundreds of other participants how our platform works and share more about the company. Martins Liberts, the co-founder of the company gave a demo demonstration of the platform on his real account to the attendees, he also participated in a panel discussion about usage of the blockchain technology for lending industry.
Highlights of Martins Liberts speech at demo demonstration
In the introduction of his speech, the co-founder of the company stressed the importance of entrusting lending business into the hands of professionals. This is the reason why Debitum Network introduced decentralization of the lending process by inviting third parties (risk assessment, insurance, and debt collection) to participate in lending. “Doing it all by ourselves is not a good decision as all of the things have their proprietary things and algorithms. For example, if we do business in some country, we partner with local risk assessors of the country who are doing a risk assessment for different cases on a daily basis”, stated Liberts.
“The way business functions is that our own or partner brokers put a loan on our platform and investors can participate by investing in them and get a fair interest rate from their investment”, continued the visionary of the project.
Liberts, then gave a quick overview of the platform, taking the viewers through specifics of each functionality and icon on the platform as well as stressing that an investor can get a more detailed view about the asset: who the broker is, what his score is, credit score, the loan itself, why it was given out and to what kind of business it is, when it started, the company description, under asset description, who the final payer of invoices is and etc. “In this way, you, as investor are in charge of your own decisions and if you are numbers person you can look at financial data of the company to get a better grasp of the financial situation of the company in question. You can go through the platform and cherry pick the assets that you like most and as diversification is the key, you may split your investments in each of assets, more or less equally”, elaborated Martins Liberts.
“The fun part is that investing on our platform you earn interest from day one, right away”, concluded Liberts.
The busy team at the event and their experiences
Everyone interested could visit Debitum Network booth at the premises and try demo platform for themselves. Debitum Network team members were there to answer all the questions about the platform and guide through the whole investment process. The attendees demo tested the platform, discussed future plans, and our team made a lot of new acquaintances. They shared their experiences with us and here are some of them.
Eimantas Valancius (Operations and support manager at Debitum Network)
“LendIt itself was very interesting. All the participants engaged in the process and I had tons of individual meetings that could yield promising results.
I spent most of the time communicating with attendees at our booth and at individual meetings. I participated in around 10-12 meetings, where I met with brokers, loan originators and potential service providers from all over Europe and even with one from Africa.
I demonstrated to quite a few people how the platform works and what you can do on it. In general, people were interested in the platform, they liked how it looked. The most common questions were: “How are you different?” “Is it like Mintos?” “What are you guys working on now?” I singled out our differences and advantages of our platform and people were positively impressed.”
Elze Atroskeviciute (Community & Business Operations Management)
“I’d say I had met and talked to over 100 people over the 2 days, showing our demo to them and explaining all kinds of features available. They were all kinds of finance enthusiasts: bank associates, news reporters, competitors, researchers, individuals interested in fintech, service providers interested in starting a partnership with us. They were mostly keen to find out why and how we differ from other lending platforms, what’s our value proposition, what is our roadmap for next year or years, how we deal with services (do we provide them ourselves or do we partner with different parties), how our ecosystem works in general, who our partners are at the moment, what’s our volume of loans or the number of users. A lot of people were very surprised to find out about the buyback feature and were really impressed.”
Gabriele Lipniute (Customer Experience Ambassador)
“I had a goal to raise awareness of Debitum Network platform and how investors can benefit from safe investments. Furthermore, I had to gather feedback about our platform, so I met with a couple of Venture Capitalists, who shared a positive view on Debitum Network and one agreed to invest starting from 10k, immediately, after the conference. The main feedback from all the participants was that ROI Debitum is offering really good compared to what we have in the EU market. It might be small for investors in developing countries – however, in the EU it is a pretty high figure. People who visited our booth enjoyed the experience and a variety of assets they can invest in.”
You can also join our platform and start investing
The interest in Debitum Network platform stretches beyond the LendIt event. Investors onboard and invest in short-term loans every week. You can also sign up on the platform at any time and participate by helping small businesses around the world grow. You will earn attractive interest at the same time. Furthermore, we have a new feature: buyback guarantee. This means, that if the borrower is late more than 90 days with the payments or defaults, the broker that issued the loan will buy the loan back. Thus, your investments always remain protected under the buyback guarantee.
Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
Investment series: short term versus long term
Investment series: short term versus long term
One way to classify investing strategies is to take into account the time horizon. Long term versus short term is often discussed by financial experts, analysts and portfolio managers. One type of strategy by no means is better than the other. We may take the Oracle of Omaha Warren Buffet, who buys stocks and holds them indefinitely (and makes billions of $). On the other hand, there is speculator George Soros, who can keep his speculative position short term, just a few days and still make hundreds of millions of dollars as a result. Let us briefly cover the strategies and look at an alternative way to invest short term.
The difference of timing and expectations between the investments
A long-term investment will constitute investments, comprising stocks, bonds, real estate, and cash, that are intended to be held for more than a year. The long-term investments differ from the short-term investments in that the short-term investments will definitely be sold, sooner rather than later, whereas the long-term investments may never be sold.
Long term investments are those that have the likelihood to increase your profits over a long period of time. Those maybe index funds, stocks, long term government bonds. They tend to appreciate over the long haul and can withstand sharp and prolonged downtrends as an investor holding specific long-term instruments would not sell them when the financial markets are temporarily falling. Payout expectations are long term.
Short term investments will typically not last longer than a year and the investor holding financial instruments will look to convert them into cash any time opportunity presents itself. Payout expectations are short term. Among short term investors would often be traders or speculators that may hold their portfolio positions from a few hours to a couple of days. This is, naturally, increases risks as predicting daily or weekly fluctuations of any market is highly speculative and tremendously difficult thing to do. These types of investments may include: currencies, options, short term government bonds, stocks (for day trading) and etc.
Long term investors do not panic at short term market swings that go against them. Markets are cyclical. They go up and down, and then up again. On the other hand, those who have higher short-term expectations and take upon themselves higher risks should cut their losses quick when the market goes against them.
Investing in Short term business loans for small businesses
Short term investments may be not only securities, commodities, real estate or bonds but also loans for businesses. Alternative fintech companies such as our Debitum Network, Twino, Grupeer, Mintos, Funding Circle, Assetz Capital or Zopa not only help for SMEs to get funding for their operational costs but also gives both individual and institutional investors opportunity to participate in the financing process, invest in those loans and earn quite attractive annual interest at the same time.
Maturity terms for those loans typically last from a few weeks to 6 months. Annual interest is within the range 10-15%. Considering that a lot of investors cannot beat stock index returns, which is 8%, or even the average of mutual funds, which is 5%, 10-15% is really attractive.
Other advantages:
- Amounts are flexible. You can start with 10 Euros. The maximum is 10 million Euros.
- You may invest in an asset even if the repayment day is a few days away.
- Possibility to choose assets from various industries: Logistics, Wholesale, Manufacturing, Services to name a few.
- Portfolios should match the style of any investor: conservative, moderate and aggressive.
- All assets on the platform have a guarantee.
Below is the snapshot of 4 assets from our platform. You can invest in any of them. If you want to find out more what each item on the asset bar means and how to invest, you can read this blog post.
4 assets from the platform
If you got interested, try our platform
Disclaimer: It is important to point out that the approach presented here is not necessarily suitable for everyone and is presented for information purposes only. It is not intended to be investment advice. You should seek a duly licensed professional for investment advice matching your specific situation.
Investment series: analysis of an asset on Debitum Network platform
Investment series: analysis of an asset on Debitum Network platform
Debitum Network platform 1.0 Abra has been live for one month. Borrowers have uploaded the assets (short term loans) to be financed, a lot of investors onboarded and now anyone can participate in the funding process to help with the growth of SMEs around the world. We currently have 32 assets from various industries. You can invest in any of them. We decided to pick one asset and look at it more closely so that you could better understand what is what and how to invest in it.
This is the asset we decided to discuss. It has 65 days before the date of repayment. So, if you make up your mind to participate in the funding, you still have time.
1. The first item in the asset is an industry. Every asset is put into a specific industry category. This one belongs to logistics. Debifo (that collects invoices) told us that logistics is one of the most reliable industries and they hardly ever hesitate whether to take on an invoice from the industry.
2. The second item indicates who the broker that collects the invoice is. At the moment, the broker that puts most invoices on our platform is Debifo. It has been in invoice factoring business for over 3 years and was featured in Forbes among top five European fintech companies to watch in 2016. Another most recent partner providing invoices is Chain Finance. More partners loan originators will be soon.
3. Issue date simply states the exact date when the invoice was issued.
4. The next item is the number of days left till the repayment. This one ends in 66 days. Most loans are short-term, so you have quite limited time to consider what loans to invest in before they reach maturity term.
5. You can also see the country where the borrowing company operates. We have started our operations in Eastern Europe. This logistics company is from Lithuania.
6. Our short-term loans mostly belong to Invoice financing category. This one too. Invoice financing is a way for businesses to borrow money against the amounts due from customers. By pledging their invoices businesses can get the bulk amount much faster than they normally would.
7. Guarantee icon means, your investment is secured by a guarantee. It maybe backed by invoices, a personal guarantee from the business owner, another company or a buyback guarantee. To learn more about the specific guarantee of an asset go to next point.
8. When you press view, a pop up comes up. In it, you will see a summary with all info about the asset. Below pop up shows all the info about the asset we are talking about.
9. If you press “BORROWER & UNDER ASSET DETAILS”, you will learn more the purpose of the loan, a business sector the company is in, when it is registered, a quick description of the company and what kind of guarantee it has for the asset.
10. The next 2 items indicate the total amount of the invoice and the amount available (for investment). This one has 500 Euros covered and 33,060 Euros available for investment.
11. The percentage shows what is the annual interest rate for the asset. This one is 10%. This is how much you would earn if you kept your investment for the whole year. The number would be different as the maturity term is shorter.
12. The item below shows the credit score of a company. The higher the number, the safer the company, the lower the interest. The lower the number, the riskier the company is, the higher the interest rate. The higher is better, the lower is worse. The range for the score is from 0 to 100.
13. Below is the field where you have to enter the amount you want to invest in the asset. The amounts are flexible. The minimum is 10 Euros.
14. Add to briefcase icon is the last item on the asset. After you entered the amount you need to add it to briefcase by clicking ‘ADD TO’ briefcase. It is, then, added to your briefcase. You confirm it, and you have invested in the asset.
Ready to invest?
You can easily invest in any asset on our platform. Having chosen the asset you like, it is a matter of split seconds and you can start earning interest on that instrument.
Disclaimer: It is important to point out that the approach presented here is not necessarily suitable for everyone and is presented for information purposes only. It is not intended to be investment advice. You should seek a duly licensed professional for investment advice matching your specific situation.
Investment series: Diversification
Investment series: Diversification
Diversification in investments is a method to reduce risk by distributing your funds among different financial instruments, industries, categories, and investment timeframes. Investors similarly use it to maximize returns on various investments that tend to perform differently at different market trends. It may not completely rule out risk, but surely reduce it significantly and enable you to achieve long term investment goals.
Why diversify?
If you own securities or commodities or any other financial instruments of the same kind, imagine what happens when the market turns around in that specific industry. More often than not, all of the securities in that field begin falling. Which means, all your investment portfolio is going down. Fund managers tend to mix up their portfolio with securities from different market segments: airlines, banks, high-tech, medicine, services, some commodities and etc.
A single event that may impact negatively one specific sector, will highly unlikely impact all of the sectors of the global economy. It is prudent to comprise your portfolio of instruments that do not correlate much so that when one segment of the market is affected, it would not impact the bulk part of your portfolio. Diversifying among asset classes is another way to make your investment strategy as efficient as possible. Government bonds will surely perform differently than stocks and what affects one group may not affect the other. Bonds and equities tend to move in different directions, so if your basket of equities is falling, your basket of bonds will likely rise.
A new area for your diversification – short term loans for SMEs
When it comes to investing, the first thing that would come to people minds are stocks, bonds, commodities. Some would add currencies, maybe real estate or physical methods. Few would think about investing money in loans for small businesses.
A new era of fintech and the blockchain opened new markets for investment. Regulation requirements and interest of commercial banks in big businesses left small businesses largely underfinanced. This created a new market for alternative lending. Businesses and individuals around the world can now finance SMEs globally. This has become a new stream of investments for any prospective and savvy investor to consider and an alternative way to diversify your investment portfolio. P2P lending platforms similar to Debitum Network are on the rise. Among them: Funding Circle, Mintos, Twino, Assetz Capital, Follow Finance, Ratesetter, Zopa, Upstart, Prosper Marketplace or Lending Club.
Debitum Network platform 1.0 Abra is live
On the 3rd of September an innovative alternative finance platform Debitum Network 1.0 Abra launched. It connects small businesses and funding sources around the globe. Now, anyone can participate in supporting the growth and expansion of SMEs and earn attractive interest at the same time.
Disclaimer: It is important to point out that the approach presented here is not necessarily suitable for everyone and is presented for information purposes only. It is not intended to be investment advice. You should seek a duly licensed professional for investment advice matching your specific situation.
Why is credit score important (updated)
Why is credit score important (updated)
Lending institutions give businesses that come for a loan a credit score. It is a number that provides a conclusion on your business credit reports. The credit score helps lenders understand the strength of your business model, how responsible and committed you are to achieve your business goals, and whether your company has the ability to make payments on time. So, this number either increases your opportunity to get a loan or decreases it.
An interesting fact for you to chew on; research shows that most startup businesses fail within the first 3 years of business, not because they lack abilities, talents, or a poor business plan, but because they have limited access to funding.
Typical Range for credit score
Credit scores for businesses may vary with different lenders, but the most usual range is 1-100. The higher the score, the better for business it is to get a loan as it means the company is not regarded as a risky one to lend to. 80 or higher is considered to be excellent.
An example of how a rating agency can rate risks based on specific credit scores:
A score of 1–69 indicates a high risk of late payment, 70–79 indicates moderate risk, and 80–100 represents a low risk.
Debitum Network credit score (old scoring system)
On Debitum Network platform Abra 1.0 assets can be filtered according to three categories and you can form your briefcase accordingly.
Just for the sake of giving you an example (numbers are for illustration purposes), which credit score category a specific number would go to:
- 85-100 would mean conservative
- 71-84 would mean moderate
- 0-70 would mean aggressive
Credit score system updated. New scoring system took effect on the 14th of November.
| Credit Score in a letter rating | Credit Score in a 100 point scale | Probability of default within 12 months |
 |
100 – 80 | 0.00% – 0.12% |
 |
79 – 73 | 0.13% – 0.16% |
 |
72 – 69 | 0.17% – 0.31% |
 |
68 – 67 | 0.37% – 0.46% |
 |
66 – 65 | 0.55% – 0.70% |
 |
64 – 63 | 0.84% – 1.06% |
 |
62 – 61 | 1.27% – 1.60% |
 |
60 – 59 | 1.92% -2.42% |
 |
58 – 57 | 2.91% – 3.65% |
 |
56 – 55 | 4.39% – 5.50% |
 |
54 – 53 | 6.61% – 8.27% |
 |
52 – 51 | 9.92% – 12.37% |
 |
50 – 49 | 14.82% – 18.39% |
 |
48 – 47 | 21.97% – 25.40% |
 |
46 – 45 | 28.83% – 32.26% |
 |
44 – 0 |
Expected to default |
Advantages of having a good credit score:
- Your business helps you to have a good image with your business partners, suppliers, investors, and lenders
- You can easier qualify for business loans as well as growth and expansion and borrow more
- You can get business loans at lower interest rates and save you money
- It can possibly get lower insurance premiums
- You may get business loans without signing a personal guarantee for any debts your business cannot pay
- It protects your personal credit.
Some of the negative things that may negatively impact your business credit score:
- Property arrests of a company make the company look riskier and decreases credit score as a result
- Companies that show court records (even one) have a risk of getting their credit scores reduced
- Having a high number of claims or lenders results in higher risk and consequently, lower credit score.
- Insolvency private individuals or managers of a company will likely push credit score down.
The main methods to improve your credit score:
- You have to separate business and personal finances
- Get a business credit card, start building a line of credit
- Choose business partners and lenders who will report your good payments to business credit agencies
- Pay your bills and payments to creditors on time or better early
- Do not exceed your credit utilization ratio by 30 percent
- Have a habit of checking your credit report and correct any mistakes/errors in it.
Debitum Network Platform Abra 1.0 is Live!
On the 3rd of September, we reached a significant milestone on our roadmap and delivered the first version of our platform Abra 1.0.
It does not matter whether you are a conservative, moderate or aggressive investor, you will find assets according to your risk tolerance and be able to invest for an average annual return of 7-11%.
Small businesses can register on our platform and borrow from 10,000 EUR to 1 million EUR.
Service providers can sell their services of risk assessment and debt collection to clients all over the globe for an attractive compensation.
Ready to invest?
Ways to get funding in alternative finance
Ways to get funding in alternative finance
Traditional way of getting a loan, that involves going to a bank and filling an application is probably the only way most people imagine. However, there are a lot of other ways to get funds for your small or medium-term business. Alternative finance p2p platforms such as our own Debitum Network or Mintos, Zopa, Funding Circle, Assetz Capital and others can offer you a few possibilities to choose from. This blog post aims at describing some of the most popular ways that alternative lenders provide funds to small businesses.
Equity crowdfunding
Equity crowdfunding is the process when, typically, a lot of people (crowd) provide money to small business in return for equity. Small businesses do it with the help of a crowdlending platform. This type of funding has been around for many years. However, in the past it would take big businesses or angel investors to provide the bulk amount of funds. In traditional IPOs, the starting sum would be $ 1 million. Nowadays, a lot of people with as little as $ 100 can participate in the funding process.
P2P lending
Peer to peer lending is online lending service that connects individual investors with borrowers and a loan is provided with an agreed fixed interest rate and maturity. Borrowers have their profiles on P2P lending platforms and investors may look at them, analyze past performance and determine whether they want to take risks lending money to that specific borrower. Borrowers can be both individuals and small businesses. An individual may provide a partial or full amount requested by a borrower. The rest money will come from other individual investors. To some extent, Debitum Network can be regarded as P2P lending platform, despite the fact that it only lends money to small and medium sized businesses, not individuals. In this regard, it is B2B (business to business) platform.
Property finance
Property finance type of funding is usually a secured business loan, where property (residential, business or property portfolio) is used as a collateral. You use the option when you want to borrow to buy property for a business or redevelop your existing property. You may also need to have a big deposit (up to 40 percent) for getting this type of loan. The benefit of that is that the bigger the deposit, the smaller the interest rates.
Invoice financing
In invoice financing a borrower uses his customers’ outstanding invoices to borrow money. A lender buys those invoices. In this way, an invoice of sales becomes a security for a loan. It has an advantage that you do not risk losing equity of your company. Small business companies often use this method of funding to get cash without waiting for the payment dates from their customers. The payment terms can be a drag as businesses often need cash fast for operational expense. Invoice financing allows you to transfer payment terms to your lender and you get the necessary money immediately. Invoice financing average return averages around 10-15% per year.
Asset based investing
Asset based lending is any kind of lending secured by an asset. When an asset is used as collateral, in case a borrower fails to repay the loan, the lender takes the asset from the borrower. This type of lending is typically used when a lender is not convinced that a company can pay the loan through its cash flows. Typically, the assets that are taken as collateral are: inventory, accounts receivable, machinery and equipment.
Register and start investing on Debitum Network platform
As you may see, there are plenty of ways to get funds for SMEs outside of traditional banking system. When Debitum Network platform launches in September, 2018 small businesses will have lots ways to get funding. There will be assets such as Factoring, Business loan, and a few more to choose from. Average expected returns for investors would be 7-11% per year and short term loans will vary from 2 weeks to 6 months. As platform is going to be global, any investor from around the World can invest in any asset with a flexible amount of capital, not necessarily full requested sum.
Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.