The financing of Working Capital and access to financing is the Number One pain point for SME in Asia. According to our study, SME face the following issues:
- Difficult access to short-term credit
- Demand for cost effective financing
- Demand for liquidity diversification
- Cumbersome credit application processes.
Yet, some BTB financing organizations have developed online platforms for financing client invoices all over the world. These solutions then turn sales invoices into available cash in a few clicks and in less than 3 business days.
When a company sells goods or services, clients have payment terms of 30, 60, 90 or even 120 days. These solutions immediately fund these invoices and advance cash from investors registered on the platform.
These solutions onboard the seller and conduct Know Your Customer and Due Diligence as follows:
- Verification of the details and the authenticity of the underlying transaction,
- The Partners of the solutions step in and evaluate transaction risk.
These financing solutions list the invoice on their web-based auction platform and suggest a yield category. Then, Investors purchase fractions of the whole invoice according to their risk appetite. The Seller receives the advance amount (typically 80% of invoice face value), minus platform costs
The Seller receives the balance amount of the invoice minus investor yield while Investors receive their capital plus interest accrued in typically 60-90 days. The Funds are ready to be deployed again to purchase other receivables.
Opko Finance, an accounting and outsourcing services company based in Hong Kong and managed by a French expatriate, helps Start up, SME, Entrepreneurs, subsidiaries of big companies to set up and develop their business in the best hubs in Asia and Middle East, faster and with fewer resources through outsourcing solutions in the Philippines.
For any information on the financing in Asia, please contact our team to info@opkofinance.com.
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