Products Comparisons

Peer-to-Peer (P2P) Lending: Funding Societies vs Validus vs Minterest

Jennifer Tjahyadi
May 23, 2020

Peer-to-peer (P2P) lending, also known as crowdfunding, is an alternative business financing solution for SMEs. Unlike a traditional bank loan, SMEs that require funds are matched directly with individual investors through an online lending platform, hence the term “peer-to-peer”.

We list the information of 3 P2P lenders in the Singapore market:

1. Funding Societies Pte Ltd

  - digital financing platform with business presence in Indonesia, Malaysia and Singapore. In 2019, It surpassed the S$1 billion mark in SME lending.

2. Validus Capital Pte Ltd

  - addresses the financing of SMEs by utilising data analytics, machine learning and artificial intelligence.

3. Minterest Pte Ltd

   - connects corporate borrowers with investors to empower both parties and helps them reach their financial goals.

Funding Societies Validus Minterest
Established
  • 2015
  • 2015
  • 2016
Type of Products
  • Business Loan
  • Invoice Financing
  • FS Bolt
  • Working Capital Loan
  • Invoice Financing
  • Purchase Order Financing
  • Business Loan
  • Invoice Financing
Eligibility Criteria
  • Singapore incorporated companies with local shareholding of at least 30%
  • Operating history of at least 1 year (not applicable for FS Bolt)
  • Annual revenue of at least SGD $300k (not applicable for FS Bolt)
  • Registered Business with ACRA
  • Operating history of at least 2 years
  • Minimum annual revenue of at least SGD 500k
    Business Loans:

  • Registered Business with ACRA or Limited Liability Partnership
  • At least 1 Guarantor
  • Identifiable Cash Flow

    Invoice Financing:

  • Registered Business with ACRA or Limited Liability Partnership in operation for more than 1 year
  • 6 months ongoing relationship with invoiced clients
  • Minimum annual turnover of SGD 250k
Maximum Financing Amount
    Business Loan:
  • Up to $2m

    Invoice Financing:
  • Up to $1m or 80% of invoice value

    FS Bolt:
  • Up to $100k
    Working Capital Loan:
  • Up to $250k

    Invoice Financing:
  • Up to $500k or 80% of invoice value

    Purchase Order Financing:
  • Up to 60% of PO amount
    Business Loan:
  • Up to $3m

    Invoice Financing:
  • No information
Tenor
    Business Loan:
  • 1-12 months

    Invoice Financing:
  • Up to 120 days

    FS Bolt:
  • 1-12 months
    Working Capital Loan:
  • 3- 12 months

    Invoice Financing:
  • 30-120 days

    Purchase Order Financing:
  • 30-90 days
    Business Loan:
  • Up to 12 months (longer tenor may be considered)

    Invoice Financing:
  • No information
Interest Rates
    Business Loan:
  • 0.75-1.5%/mth

    Invoice Financing:
  • 0.67-1.5%/mth

    FS Bolt:
  • 0.6-6%/mth
    Working Capital Loan:
  • From 1.5%/mth

    Invoice Financing:
  • From 1%/mth

    Purchase Order Financing:
  • From 1.25%/mth
    Business Loan:
  • 0.67-1.5%/mth

    Invoice Financing:
  • 0.67-1.5%/mth
Other Fees
    Service Fees

    Business Loan:
  • 3-5%

    Invoice Financing:
  • 2-4%

    FS Bolt:
  • 3-5%

    Early Repayment Fee

    Business Loan:
  • Subject to 2% on outstanding principal

    Invoice Financing:
  • None

    FS Bolt:
  • None

    Late Interest Charges and Late Payment Fees:
  • 0.1% of outstanding principal per day on top of late payment fee (no information)
    Disbursal Fee:
  • 1-2.5%

    Late Payment Fee:
  • No information
    Processing Fee:

    Business Loan
  • 2-6%

    Invoice Financing
  • 2%

    Late Payment Fee:
  • Amounts to 2% of the loan principal outstanding or $2,000, whichever is higher

Things to take note of when borrowing from a P2P lender:

Quantum and Tenor

Most P2P lending platforms offer borrowers working capital loans and invoice financing (at a capped quantum) and a shorter tenor as compared to banks. Depending on the type of product, the loan amount (I find that people understand this better than its technical term quantum) can range from as low as $5k (Capital Match Invoice Financing) to more than $5m (MoolahSense Business Loan), according to your eligibility.

Usually, the loan tenor that P2P lenders offer ranges between 3 - 12 months for a working capital loan. With fewer requirements needed to obtain a loan, P2P loan products are popular amongst borrowers who do not have collateral to pledge and require short-term financing solutions fast.

Interest Rates

The interest rates charged to borrowers start from 0.67%/mth to as high as 5%/mth. Typically, the rates vary according to an individual borrower’s credit evaluation score, as well as the requested loan amount and tenor.

Some P2P lenders such as Validus offer preferential rates to certain vendors (e.g. SMRT) and offer a higher loan amount of up to $500k (or up to 90% of the invoice amount) for invoice financing at 0.67% per month.

Fees

P2P lenders generate revenue by charging fees to borrowers and taking a percentage of the interest earned on the loan. One of the most common fees is the origination/processing/disbursal fee. This is the cost that is charged to a borrower by a lender for handling application paperwork and creating a curated loan proposal that suits his or her needs.

As illustrated in the table above, some P2P lenders also assign additional fees to borrowers. Funding Societies, for instance, charges an early repayment fee of 1% of the remaining principal amount to compensate investors for the promised interest lost, due to early repayment. 

Conclusion

Before deciding on whether to take up a loan from a P2P lender, consider and ask yourself the following questions:

1.  Suitability: Does the proposed loan solution solve your business needs?

2. Affordability: Are you able to afford the interest rate proposed to you and make timely repayments based on the tenor?

3. Additional Charges: Read the loan agreement carefully for any extra costs or penalties that are not stated on the lender’s website.

4. Repayment Schedule: Lenders offer repayment terms with varying degrees of flexibility (e.g. some require you to pay daily, others weekly and monthly). Work out which will best meet your business’s needs in terms of your cash flow.

If you are considering taking up a loan with P2Ps, financial institutions or private lenders, feel free to visit Lendingpot’s Business Loan Marketplace.

Lendingpot.sg gives you access to 47 lenders with just one application. Apply with us and get connected to only interested lenders. As the COVID-19 pandemic worsens, we understand that most financial institutions are tightening their credit, especially for unsecured loans.

Talk to us at 8774 9895 or email us at ask@lendingpot.sg to find out more about how you can explore other financing options or restructure/refinance your loans.

Disclaimer: All the information is believed to be accurate; however, no claims, promises or guarantees about the accuracy, completeness or adequacy of the information are made. All information, commentary, recommendations or statements of opinion provided in this article are for general information purposes only. We do not claim to be authoritative. If there are any errors in our reporting, please contact ask@lendingpot.sg for rectification.


Request for a Business Loan Now!

Lendingpot.sg operates a Business Loan Marketplace that allows an SME to connect to multiple lenders with just one application, allowing the SME to know who its prospective lenders are and the rates that they offer, in a very short time.


Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.

About the author

Jennifer loves helping SMEs in their business growth journey. She is also an epicurean and has perpetual wanderlust. During the weekend, she weaves poems out of thin air and buries herself in books.

peer-to-peer lenders
P2P
Lending
Funding Societies
Validus
Minterest

You may also like

Business Loans
5 factors that affect your loan eligibility
Belinda Wan
October 4, 2021
Business Loans
Business Loan Series: The Business Term Loan
Benjamin Lam
April 8, 2022