Borrower's FAQ

GENERAL
  • Are we eligible to apply for a business loan?

    The company must be 

    1. incorporated in Singapore
    2. with Singaporean or Permanent Resident Director(s) of at least 30% shareholding
    3. either a Private Limited Company (Pte Ltd) or a Limited Liability Partnership (LLP)
    4. in business for at least 1 year 
    5. with an annual turnover of at least $300,000
    These conditions are not absolute as we review our loan applications on a case-by-case basis. You are encouraged to apply for a loan to check your eligibility. We do not charge any fees for application.

  • How do we apply for a loan?

    Simply click here, fill up the required details and submit the loan application in just a few minutes.

    Once your application has been submitted, our team will contact you within 2 business days.


  • What type of loans can we get?

    We offer a comprehensive suite of SME loan products including but not limited to business terms loans, working capital loans and project loans. We do not ask for any collateral and the loans are secured through the Personal Guarantee of the Directors of the SME.

  • How long is the loan tenure?

    Loan tenure ranges from 3 to 24 months.Loan tenure ranges from 3 to 24 months.

  • How much is the loan amount?

    Loan amount ranges from $20,000 to $500,000.

  • What is the interest rate?

    On average, interest rates range from 9% to 14% per annum on a simple interest basis. Our interest rates are determined by our risk-based pricing model which is derived through our proprietary credit scoring system.


  • How are repayments done?

    Repayments (Principal + Interest) are made monthly via GIRO. 

  • I want to refer my friend for a loan. How do they contact you?

    We are available at +65 6221 0958 on Mondays to Fridays, from 9 am to 6 pm. They may also email us at info@fundingsocieties.com. 

    You will be rewarded with $500 for every successful referral made.

APPLICATION
  • What are the documents required for loan application?

    The main documents required are 

    1. Bank statements for the last 6 months
    2. Financial statements 
    1. Financial statements for the last 2 years (Audited If Applicable) 
    2. Management-prepared (certified true) financial statements for the latest year
    3. Others (GST Returns, Ageing List etc on case to case basis)
    3. Guarantor's
    1. NRIC 
    2. Notice of Assessment (NOA) for the last 2 years
    3. Credit Bureau reports
    4. Proof of Residential Address

  • How soon can I get cash from the loan?

    Overall, the whole process should be completed within 15-20 business days.

    The application and approval process would take 4-5 working days. Upon approval, your loan will be put up for crowdfunding for 14 days and it will end as soon as it is fully funded.  


  • What happens when crowdfunding is unsuccessful?

    In the unlikely event that your loan is not fully funded by the end of the crowdfunding window, our team will reach out to you to discuss the next steps.

  • What are the costs & fees involved?

    There are no fees for loan application, and approval. We only charge a competitive fee, upon successful disbursement of your loan. 

  • Can we apply for another loan if we already have an active loan with Funding Societies?

    Yes, you may apply for a subsequent loan with Funding Societies. However, subsequent loans are also subjected to the full underwriting process.

REPAYMENT

Lender's FAQ

GENERAL
  • Am I eligible to apply as an investor?

    You will need to be at least 18 years old. Singaporeans as well as foreigners are welcome to invest.

  • How can I view the Funding opportunities?

    Funding opportunities/loan listings are available for viewing once you sign up with us. Click here to sign up!

    If you are already signed in as an investor, you can view the opportunities on “Browse Loans” page. 

  • How do you assess the creditworthiness of SMEs?

    Loan applications are evaluated and approved based on a stringent set of criteria and review process. We combine assessment methodology used in established financial institutions as well as innovative methods observed in other markets. We evaluate both hard and soft data collected from customers and validate with third party sources and direct observation (yes, we visit and interview all our borrowers). All the assessment culminates in an internal scoring, which is our opinion on both the business’ and their owners’ capacity and willingness to repay the loan. Finally, we factor in a reasonable margin of error for scenario/ sensitivity analysis, and secure all loans with Personal Guarantors (usually company directors) for added security.


  • Can I register as a borrower, an investor simultaneously?

    Definitely! 

    However, you will be required to open separate accounts for each, using different email addresses. We are working on providing you with the convenience of a single sign-in and should be able to introduce this facility very soon. 

     


APPLICATION
  • How do I sign up as an investor?

    1. Simply click here and create your profile. 
    2. Fill out the subscription form, and transfer a minimum of $1000 to the escrow account (Account details will be provided on the platform) to commence your investment journey.  Remember to upload the transaction receipt. The minimum $1000 requirement only applies for the initial deposit. For subsequent transfers, there is no minimum amount. 
    3. We will send you a Subscription Agreement within 1-2 business days. Please e-sign and submit this at your earliest convenience.
    4. Once you submit the Subscription Agreement, we will activate your investment account within 1-2 business days.






  • What are the documents required for investor application?

    If you are a Singapore citizen or resident, please provide a copy of:
    NRIC AND Passport (Singapore PR only)
    If you are not a Singapore citizen or resident, please provide a copy of:
    Passport

    AND
    Proof of Residence (not older than 3 months) - 1 bank statement showing the account name and account number, and 1 other letter from a government body/statutory board e.g. utility bill, income tax statement


  • What are the fees?

    We are committed to making an impact on societies with a network of investors. We charge a nominal 1% service fee on your monthly repayment (principal + interest).

INVESTING
  • How do I begin investing?

    Once your investment account is activated please use the following steps to begin investing :

    1. Sign into your account here
    2. Go to the ‘Browse Loans’ section to view the ongoing funding opportunities. The ones with ‘Crowdfunding’ status are available for investment.
    3. Click on the Loan ID to view the Factsheet which provides details of the loan and business.
    4. Input the amount you want to invest under the ‘Investment Amount’ column and check the box next to it. Click on ‘Check Out’ to complete.

  • What are we investing in?

    You will be investing in business loans to Singapore SMEs with high potential. These are usually term loans requested by SMEs to expand their business e.g., purchase of capital equipment, bridging of working capital and down payment for new projects. Details of a loan can be viewed under the 'Browse Loans' page and further information about the SME can be found in the factsheet.

  • Can I know the name of SME borrower I invest in?

    As contracts can generally only be entered between two known parties, you would only know the name of the SME borrower when you invest and enter into a loan agreement with it. Prior to that, we are unable to broadcast the identity of the borrowers, as many of them understandably prefer to not to advertise their financial needs. However, we provide a detailed factsheet about our assessment of the SME borrower. It contains the key information one would need to make an investment decision. You are also welcome to email us if you would like to know any further information on a specific SME borrower. We would strive to furnish you with the requested information on a best-effort basis.

  • What is the minimum funds required for investment?

    You can start investing at as low as S$100 per loan.

     The minimum initial funds to be transferred to the escrow account is S$ 1,000. A minimal deposit of $100 is required for subsequent fund transfers. (Made in multiples of $100)

  • How much is each investment?

    The minimum investment amount is S$ 100. There is no upper limit to how much you could invest in each loan. However, as a form of good investment practice, we strongly encourage you to diversify your investment across multiple loans. 

  • How are interest rates determined?

    We take a risk-based pricing approach for our internal scoring to determine the interest rates of each SME loan. We post loans for your investment, only if we have reasonable expectation to believe that the SME and its owners have the capacity and willingness to repay. Amongst creditworthy SMEs, some could comfortably make all monthly repayments regardless of market conditions, while others would still be able to repay the full loan but are susceptible to late payment if there are major changes in market conditions. As per most investments, higher rewards come with higher risk. We assign higher interest rates for the latter SMEs to compensate for the higher risks investors assume.

  • What is the difference between Simple Interest and Effective Interest?

  • What is the expected return on my investment?

    The returns of each investor differ case by case, based on a range of factors e.g., market condition, your choice of loan, total investment size and level of diversification etc. Your final expected return could be calculated based on the suggested formula below:

    Expected return* = Interest rates of selected loan(s) – 1% of service fee 

    *The above is assuming no default. 

    Since repayments (principal + interest) are made monthly, investors are encouraged to re-invest. This exponentially increases the potential returns on your investments.

  • What is the default rate?

    It is our goal to keep default rates close to banks and non banking financing companies, not exceeding 4% – 5% of loan amount. This is to enable investors to secure healthy returns, even after accounting for the cost of default. We are constantly researching, experimenting and improving our FS Scoring Grade assessment methodology to reduce expected default and increase your returns. 

  • Is the interest income I earned taxable?

    According to Inland Revenue Authority of Singapore (IRAS), interest income from loans to companies are taxable at progressive tax rates for tax residents.

    For non-tax residents, tax rates are generally at 15% and subjected to withholding. The tax rates could differ on a case-by-case basis e.g., tax treaties. We believe it is still a worthwhile investment given the strength of the Singapore Dollar and stability of investment. However, as we are not a financial advisor, you should take the necessary independent legal, tax, financial and other advice before investing.

  • How long is each loan open for crowdfunding?

    Each loan is listed for crowdfunding for 14 days or up until it reaches 100% funding, whichever is earlier.. If the loan is not fully funded after 14 days, we might extend the crowdfunding window on a case-by-case basis. We would disburse the loan to the SMEs only if we achieve a minimum of 80% loan request to ensure that SMEs receive sufficient funds as required for business operations. 

    Please also take note that we accept investment on a first-come-first-serve basis to be fair to all our investors. Whenever a new loan is posted, we will send an email notification to all our registered investors.


  • How safe are the loan investments?

    Singapore is a relatively safe market, with low bad debt ratios as confirmed in a statement by ASME. Even so, we do not take things for granted. We ensure that all loan applications go through a stringent credit assessment process (refer to “How do you assess the creditworthiness of SMEs” FAQ for details) and we make our best effort to assess creditworthiness of SMEs, their owners, and directors. After loan disbursal, we continue to monitor the SMEs and remind our SMEs every month to ensure timely repayment.

    However, default is a risk we cannot eliminate completely. Hence, as is the case with most investments, investors have to bear the risk of default, if all precautions fail. As investors of many loans, we share the same risk with you.
    Furthermore, if you are a foreign investor, you may experience some foreign exchange risks, though it is safe to say that the Singapore Dollar has been a relatively stable currency for investment.

  • What happens if the loan defaults?

    In the rare event of default, our partner collection agency is on standby to pursue fund collection. If it fails, we would assist our investors in taking legal action to exercise the rights on personal guarantees given by the SME directors. 

  • How do I minimize the risk?

    We encourage our investors to diversify across as many loans as possible. Having a well-diversified investment portfolio allows you to enjoy positive returns even after factoring in the default risk.

  • What happens if Funding Societies goes bankrupt?

    We take all measures to ensure the protection of your investment. We are a well-funded company with the plan and capability of becoming the largest and best marketplace lending platform in Southeast Asia. We are led by a local management team, born-and-bred with families here, and with world-class international experience. In the unlikely event of default, your funds will continue to be handled by our escrow agency, Vistra Trust (Singapore) Pte Ltd (formerly known as Orangefield Trust). Your loan agreements will continue to be valid and we would find a reputable agency to fulfill our service duties.

  • Can I cancel my confirmed investment?

    Once an investment is committed, you are unable to withdraw it. This is to be fair to the SME borrower, as any withdrawal would disrupt its crowd-funding process. If the loan has already been disbursed to the SME, last minute withdrawals may also cause them to delay their growth and expansion plans. Not forgetting the other investors who may have wanted to invest in the same loan, but were unable to do so under the first-come-first-serve system. Hence, kindly review your loan selection before confirming an investment.


  • How often are the repayments made?

    Repayments (principal + interest) are made on a monthly installment basis, on the 1st or 15th of the month. As repayments are done via GIRO and the processing time differ across banks, we disseminate batch announcements on the repayment status of all loans on the 8th and 23rd of every month. You could also check the repayment status on the “Loan Portfolio” page in your account. 

    Having monthly repayments also provide our investors with an additional benefit of enjoying higher potential returns through re-investment.

  • How do I make a withdrawal

    Uncommitted funds in your account can be withdrawn anytime at no cost, at a minimum amount of $100. Upon confirmation of your withdrawal request, the funds will be transferred to your account via GIRO within 2 business days. Kindly make a withdrawal request through your account's Withdrawal page.

  • What happens in the case of early repayment?

    Consistent with our vision to help SMEs grow, we allow SMEs to make early payments. To compensate, concerned investors will get 1% of the outstanding investment. We would also introduce investors other excellent loan opportunities. 

  • What happens in the case of late repayment?

    We send early monthly reminders for repayment to all our SME borrowers. We will begin our internal credit collection procedures immediately if there is any delay in payments after the due date. We also send multiple reminders and follow up in person. In the event of late repayment, late payment interest (calculated on a daily basis) would be charged.
    In the rare event where we are not able to collect the money through internal effort or in case of default, our partner collection agency is on standby to pursue fund collection. If we are unsuccessful even after 60 days (i.e., SME borrower owes more than 2 monthly repayments), it would be considered an event of default.*
    If the collection agency is unable to collect, we would assist our investors in taking legal action to exercise the rights on personal guarantees given by the SME directors.

  • How do I check on my loan repayments?

    Step 1: Access your loan portfolio by clicking on the "Loan Portfolio" link, on your account's overview.

    Step 2: To check on the repayment statuses, simply scroll down to the "Loan Repayment" section of the "Loan Portfolio" page. The repayment statuses are indicated by the various symbols (e.g. green tick, yellow tick, etc.).


    Step 3A: To check on any repayment status in detail (e.g. reason for late repayment, if any): simply scroll down to the "Loan Details" section of the "Loan Portfolio" page and click on the "+" sign to show additional details for the loan.


    Step 3B: The information required will be under the "Notes" section.


  • How are defaults defined?

    Failure by Obligor to fulfil 3 periodic repayments consecutively would be deemed an Event of Default. The default percentage takes into consideration current and future expected non-repayment of principal and interest. The approach is based on the P2PFA UK mandate applicable to the lenders in UK.

REGULATION
  • Is Funding Societies MAS-regulated?

    A CMS licence is a licence issued by the Monetary Authority of Singapore to corporations that carries on a business in any regulated activity in Singapore under the Securities and Futures Act. Funding Societies Pte. Ltd. has a CMS licence to conduct the regulated activity of "Dealing in Securities".

  • Are there any investments that are guaranteed or insured?

    Currently, the loan investments are not guaranteed or insured, as this is a new product for consumers and insurance companies in Singapore. However, consistent with our vision to help investors grow their savings, we are constantly researching and improving our credit assessment process and exploring options to provide additional security for investors.

  • Why does Funding Societies use an escrow agency ?

    Having an escrow agency, Vistra Trust (Singapore) Pte Ltd (formerly known as Orangefield Trust), ensures that your funds are appropriately received and handled. It also ensures that Funding Societies complies with the anti-money laundering efforts set forth by the government to track the source of funds.
    Investing in a platform that does not use an escrow agency account is risky and strongly discouraged because without one, investors’ funds will be transferred into the business account of the platform instead. This brings into question on whether the funds are handled properly as there is no guarantee that your funds actually go to the SMEs as loans. They might instead be used to pay back other investors (as in a ponzi scheme) or to bail out the platform in the event that it does not have sufficient funds. Similarly, SME borrowers will want to ensure that their repayments go to investors like you, instead of being held by the platform itself.  

Administration FAQ

Account
  • How are contracts signing done?

    We, as a leading FinTech company, bring you the convenience of electronic signing. You would receive two emails: one with an access code and another one with the e-contract link. Click on the link, enter the access code and e-sign it on your computer. You would receive a softcopy e-signed contract for your record. With the passage of Electronic Transaction Act in Singapore in 2010, electronic signature is recognized by law in Singapore and is legally binding. We have chosen to partner with DocuSign, the Global Standard for Digital Transaction ManagementTM and a company invested by EDB Singapore.

GENERAL
  • What does Funding Societies do?

    We are an online marketplace lending platform (commonly known as peer-to-peer lending or P2P lending) for SMEs in Singapore. P2P lending is already a well-established concept in the USA, the UK, and China among many other countries.

    We help borrowers secure loans for growth and investors get good returns for their loan investments. The investors crowdfund loans and earn returns through the interest paid by SME borrowers.

    The concept is an attractive source of funding for businesses and an alternative investment opportunity for investors with returns comparable to most traditional instruments. It could be a source of passive income.

  • What is trustee/ESCROW account?

    An escrow is a contractual arrangement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties. 

    Orangefield Trust is the escrow agency we have engaged, and it ensures that your funds are properly handled, the borrowers and investors are Know-Your-Customer (KYC) compliant and the monetary transactions are in compliance with the Anti-Money Laundering Act. 

  • What is Know-Your-Customer (KYC)?

    It is a compliance process to verify the identity of our investors and borrowers.

Invoice Financing FAQ

Purchaser (Investor)
  • What is Invoice Financing?

    Invoice financing is a product where the sellers (“Borrower” in this case) sell their future receivables or invoices that the sellers issue to their customers (“Debtor”) to get immediate cash. When the debtors pays these invoices, Investors who bought these future receivables would receive the full payment and make a return.

  • What are the returns?

    Returns range from 8% to 15% per annum on a simple interest basis  i.e., effective interest of 14.5% to 26.6% per annum

  • How much is the minimum contribution?

    The minimum contribution amount is S$ 100. However, it may vary from invoice to invoice. As a form of good practice, we strongly encourage you to diversify your portfolio across multiple invoices.

  • What is the tenure for Invoice Financing products?

    Typical invoice cycle is 30 to 90 days.

  • What happens in the event of a late payment?

    We send early monthly reminders for repayment to all our SME borrowers. We will begin our internal credit collection procedures immediately if there is any delay in payments after the due date. We also send multiple reminders and follow up in person. In the event of late repayment, late payment interest (calculated on a daily basis) would be charged.
    In the rare event where we are not able to collect the money through internal effort or in case of default, our partner collection agency, Datapool Pte Ltd (part of DP Information Network), is on standby to pursue fund collection. If the collection agency is unable to collect, we would assist in taking legal action against the SME, in some cases, the buyer (to whom invoice has been issued) and to exercise the rights on personal guarantees given by the SME directors.

  • What are the fees?

    Committed to making an impact on societies, we minimise the cost to you, with only a 15% service fee on interest earned. 

    For example, if you receive interest of S$100 for a particular deal, we would retain S$15 and credit the balance of S$85 to your account.

Borrower
  • Are we eligible to apply for an invoice financing?

    The company must be 

    1. incorporated in Singapore
    2. with Singaporean or Permanent Resident Director(s) of at least 30% shareholding
    3. either a Private Limited Company (Pte Ltd) or a Limited Liability Partnership (LLP)
    4. in business for at least 1 year 
    5. with an annual turnover of at least $300,000

    These conditions are not absolute as we review the applications on a case-by- case basis. You are encouraged to apply to check your eligibility. We do not charge any fees for application.

  • How much can I get?

    You may get up to 80% of the invoice value through our invoice financing.

  • What are the interest rates, and how are they determined?

    On an average, interest rate ranges from 0.67% to 1.25% per month on a simple interest basis. Our interest rates are determined by a risk-based pricing model which is derived through our proprietary credit scoring system.

  • Is there a processing fee?

    There are no fees for loan application and approval. We only charge a competitive fee upon successful disbursement. 

  • What type of invoices can I sell?

    Invoices must be issued to a locally incorporated business.

  • How soon can I get cash?

    For a new borrower who is submitting an application to Funding Societies for the first time, it would take 3 to 7 business days from application to disbursement as there is a compliance check. 

    Subsequent applications would be assessed, approved and disbursed within 1 to 2 business days.

11 Collyer Quay, The Arcade, #17-00
Singapore S049317

Tel : +65 6221 0958
Email : info@fundingsocieties.com
*To contact our Personal Data Protection Officer,
Please include "Re: PDPA" in the Email Subject title.
Tel : +65 6221 0958
Email : info@fundingsocieties.com
Capital Markets Services License No: CMS100572-1 issued by Monetary Authority of Singapore (2016)

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