How Alternative Lenders Help Close the SME Financing Gap
SINGAPORE: Alternative financing has been a lifeline for marketing and distribution company JuntoSTARC during this pandemic.
The company distributes branded headphones, speakers and power banks to major online retailers and platforms.
With more and more gadgets in demand amid the rise of virtual workplaces, the need to replenish inventory has become critical.
All of this is happening against the backdrop of a global semiconductor crisis, which has resulted in longer delivery times and higher prices.
Companies such as JuntoSTARC therefore needed additional funds to purchase goods earlier or to maintain more stock.
JuntoSTARC has used Validus Capital invoice financing for the past two years.
The financing is unsecured and allows the company to be paid earlier and finance new shipments, which cost approximately US $ 100,000 to US $ 150,000 per month.
“They buy the bill and fund it, and … help us free up money on the retail side. It’s always better to have a little more on hand. To plan more rather than to keep a very, very tight cash flow, “said Mr. Edmond Ting, Managing Director of JuntoSTARC.
JuntoSTARC is one of the 30,000 SMEs that have used the financing offered by Validus.
The fintech lender operates in Singapore, Indonesia, Thailand and Vietnam.
Loan disbursements have increased 30-fold over the past year, helping to pass the S $ 1 billion mark. The company expects to cross the next billion mark next year.
“We kept it very basic – the invoice requirement, as well as the buyer’s confirmation. When they need a term loan or working capital solution, we literally take the manager’s credit bureau records and six months of bank statements, and that’s literally about it, ” said Mr. Vikas Nahata, co-founder and executive chairman of Validus Capital. .