Investmint provides an innovative, flexible and technology-driven variation on Invoice Factoring and Project Financing. We provide a platform for South African businesses to apply for financing using either of these two mechanisms and creating investment opportunities for ordinary South Africans.
Invoice Factoring is the purchase of an invoice for a discounted fee. The buyer will pay a percentage of the total value of the invoice upfront and then will pay the remaining amount on settlement of the invoice less the fee to the seller.
At Investmint, a seller will submit an invoice that they would like to sell via the Investmint platform. We will verify the authenticity of the invoice as well as perform additional checks to ensure that the invoices meet our criteria to be listed. After the seller has granted us access to their cloud-based accounting system, such checks will include:
If the invoice satisfies the criteria to be included onto the platform, it can then be viewed by all the investors who are registered on the Investmint platform.
At this point, investors can decide if, and how much they would like to invest in this trade. Once 85% of the value of the trade is secured, payment is made to the seller.
Once the invoice is settled by making a payment into the designated bank account, in the name of the borrower but controlled by Investmint, the remaining 15%, less the fee will be paid to the seller.
Project financing is the mechanism by which a company can obtain short term financing to meet their current cash flow requirements for a specific job or project.
At Investmint, Project Financing agreements occur when a borrower provides us with a purchase order or contract for which they require financing. We will assess the reasonability of the purchase order along with an assessment of the repayment history of the client from whom the purchase order was received, as well as the financial health of the potential borrowers business and the quality of the accounting that is being done in the business prior to the purchase order being included onto the platform.
If the proposal for financing is approved it will be included on the Investmint platform where it can be viewed by investors.
The investor can then decide which Project Financing agreement/s they would like to invest in. Once an investment has been selected, the investor will provide the capital through the Investmint platform, which will then be transferred to the borrower. Interest will be charged on the project financing agreements according to the repayment history of the borrower on the Investmint platform (as mentioned under the borrower FAQs “What does it cost?”). Interest is accrued and paid monthly.
You qualify for funding via Project Financing or Invoice Factoring if:
Yes, your personal details, along with your banking details,are kept on our secure server. Your contact information is not shared and will never be used for marketing purposes.
Investmint verifies the financial integrity of all borrowers looking for funding. When examining your accounting history we will look at the following:
As accountants by qualification, we firmly believe that a well-run business has solid accounting functions in place and that this contributes towards the success of the business. We want our borrowers to be successful and also want our investors to be investing in companies that give themselves every chance of success.
Since financing is provided to you for transactions that have already happened, the amount that you qualify to borrow is only limited by what you can sell. If you can land the deal, we are happy to present it for funding.
Investmint merely acts as a facilitator between the investor and you (as the borrower). We do not provide financing to you directly. Investors are able to view the proposals for funding and they can then allocate their funds to the proposed loan agreements accordingly. As a result, the funds for the loan agreements are derived from external, third-party investors and not from Investmint itself.
Once you have been verified and your project has been approved, it will be shared with our database of investors. If an investor funds your project, you will receive the funds at the latest 48 hours after finalisation of the trade.
When you sign up, you choose to be notified either by email, via the Investmint platform, or both. We will notify you in your chosen manner each step of the way.
The most important thing for an Investor is your repayment history - this assures them that their money is safe.
There are plenty of other things you can do like writing a good pitch and giving enough time for the project to be funded. We suggest reading our blog or chatting to your account manager for assistance in setting up your first few trades as you learn the process.
The interest rates charged on the financing arrangements vary according to your repayment history on the platform.
As such, the interest rates to be charged on invoice factoring agreements are as follows:
|On-time repayment rate (%)||Interest rate (% Monthly)|
All new borrowers are defaulted to the 70-79% category and remain there for their first 5 trades. This means that you will be charged 4.7% for your first 5 trades. Subsequent to that, your repayment rate will affect your interest rate as detailed in the example below:
You have had 12 repayments that have become due and payable on loan agreements.
Of these 12 repayments, 10 have been on time, and 2 have been late. Therefore the percentage of payments on time is 83.3% and you will fall into the 80-89% repayment band which results in an interest rate of 4.2% for your next trade. If you are late on your next repayment,you will have 10 out of 13 repayments on time ( 77%) and you will fall into the 70-79% band and will be charged a rate of 4.7% on your next loan agreement.
For invoice factoring agreements, Investmint also charges a R250 listing fee for each trade invoice that you list on the platform. For tips on how to set up your trades, read our blog or book a call with your account manager.
The interest rates to be charged on the project financing agreements are as follows:
|Repayment rate (%)||Interest rate (% Monthly)|
For the project financing loan agreements, you will also fall into the 70-79% band for the first 5 trades, after which you will move between interest rate bands in the same way as is described under the Invoice Factoring cost schedule.
There is no minimum time frame, however the maximum time frame for either one of the above agreements is 3 months.
Investmint will allow for two working days after the predetermined repayment date, for money to clear into their account. If payment does not clear into the designated account by the third day after the predetermined repayment date, the payment will be considered late.
When a repayment is late, your public Repayment Rating will automatically adjust accordingly to reflect the late repayment.
You will shift between interest rate bands depending on their repayment history with Investmint. For all loan agreements, a simple interest rate formula is used to calculate the interest on the loan agreements, however once a repayment is late, interest will compounded daily on the overdue amount.
We do offer the possibility of renegotiating a payment date. A renegotiation request can be sent to us via the Investmint platform and, on approval by our team, will be sent to the investors for approval.
All of the investors need to agree to the extension for it to be approved. Investors have 24 hours to respond to the request for the extension. If no response is received from one or more of the investors, the system will default those investors to agreeing to the extension of the repayment deadline.
Renegotiated payments are not considered late and do not negatively affect your rating.
This allows you flexibility if things do not go exactly as planned and we encourage you to keep us up-to-date on any issues that may arise with repayment so that your repayment rating will not be negatively affected.
It is important to note that financing is provided to you by individual investors and not by institutions, which means that a default on your debt has much further reaching financial consequences than if you were to default on your debt that was issued to you by an institution such as a bank.
A default payment occurs when a borrower fails to make repayment of the capital amount and submit Proof of Payment within 48 hours after the repayment is due.
Any default by you, irrespective of the type of default (be it on an Invoice Factoring agreement or Project Financing agreement), will result in you being removed from the platform. Legal action may be instituted to recover the funds.
When submitting your proposal, you can enter a date by which you need the funds. The proposal will stay live until this date and will be removed thereafter.
Once a proposal has expired, you are welcome to resubmit it but we encourage you to give some thought as to why it wasn’t funded. We suggest reading our blog or chatting to your account manager about increasing your chances of securing funding.
Investmint is NOT a Financial Services Provider. We facilitate the sale and purchase of invoices and the generation of project financing agreements for the users of the platform and we do not provide, in any way shape or form, financial services, financial products, advice, intermediary service, or any other subtypes of intermediary services being recommendations, guidance or proposals of a financial nature.
When a borrower's project reaches it's funding deadline and the project is only partially funded, the borrower has two options: They can either cancel the project, in which case the funding that was approved for their project will be returned to the investor and the project will subsequently be removed from the platform. Alternatively, the borrower may request project cash out. This function on the platform allows the borrower to request that the partial investment be paid out to him/her. The loan will commence once the payout is made and the loan amount will be the payout amount.
The borrower is able to make an early repayment of either part or the full amount of their capital before the maturity of the loan agreement, should they wish to do so. This can be done by utilizing the early repayment function on the “Make Early Repayment” tab which can be found in each individual project. The borrower can either make a partial capital repayment with interest. This will reduce the capital base and therefore the next interest charge will be lower. Or the borrower can make full repayment of the capital along with an interest repayment in which case the project will be marked as completed and the loan is thus fully paid back. There are never any penalties charged for early repayments.
|Investor level (status)||Total amount (ZAR) invested through Investmint||Investor portion of interest|
Your investor level status as illustrated above, is determined by the total amount to date, across all loan agreements, that you have invested in through the platform. Your portion of the interest represents the percentage of the total interest that you receive on the agreement. The portion of interest earned by you, along with the interest rates that are charged on the loan agreements (as stipulated above under the borrower FAQs “What does it cost?”), determine the total return that you will earn on your investment. An example to illustrate this is listed below:
As an investor with a gold level status, you purchase an invoice from a borrower who is charged a rate of 4% on the loan agreement. You will provide 85% of the value of the invoice to the seller of the invoice. When the invoice is settled, 15% of the total value of the invoice less the 4% fee will be provided to the seller of the invoice. This 4% fee will be split 53% to you and 47% to Investmint, giving you a return of 2.49% on the value of the investment. The calculation for this scenario is illustrated below:
This example assumes the sale of R100 000 invoice: The chronological order of events outlined below illustrates the various steps in an Invoice Factoring agreement:
Invoice is funded by the investor (85% advanced)
R85 000 paid to the borrower
Invoice is paid
R100 000 received
Fee of 4% withheld to be paid to Investor and Investmint
R4 000 withheld
|Step 4||R4000 fee split between investor and Investmint||
R1 880 paid to Investmint
This generates a monthly return of 2.49% for the investor.
The interest rates that are charged on the Project Financing agreements are stipulated under the borrower FAQs “What does it cost?”. The same method used to calculate your returns under the Invoice Factoring agreements is used to calculate your returns under the Project Financing agreements.
For ease of reference, the split is listed below:
|Investor level (Status)||Total invested through the Investmint Platform||Investor portion of interest|
Yes, your personal details, along with your banking details are kept on our secure server. Your contact information is not shared and will never be used for marketing purposes.
There is no minimum investment amount.
You are allowed to invest in multiple projects.
No. You may invest any amount in a project More than one investor can make up the total value of the funds required.
That depends on your communication preferences and what selection you make. We recommend email and via the Investmint platform.
You as an investor utilize Investmint’s services and invest in Project Funding and Invoice Factoring agreements entirely at your own risk. We cannot be held liable for the defaults of businesses on their debts owed to you via the Investmint platform.
If a business defaults on their debt owed to you, that business will be unable to apply for additional financing on the platform and will consequently be removed from the Investmint platform.
We also reserve the right to enforce legal action against the business and potentially attach the business’ assets in order to recoup the losses from the debts that were defaulted on.
You will be provided with the details of the borrower and may take any action you see fit to recover the funds.
Investmint does offer the ability for a borrower to request an extension on their repayment deadline. You as the investor may choose whether you wish to grant the extension on the repayment deadline or not.
You as the investor have 24 hours to respond to the request for the extension made by the borrower. If you do not respond within 24 hours, then the Investmint platform will default to you having accepted the request for extension.
If there is more than 1 investor per agreement, then all the investors per that agreement would need to agree to the request for the extended repayment deadline in order for the request to be granted. If one investor chooses not to grant the request, then the request for the extension will be denied.
If the request for the extension is granted then simple interest will accrue for the additional days that the loan is outstanding as a result of the extended deadline.
Investmint takes every measure to ensure that both the business and the Project Financing or Invoice Factoring agreements that they would like to enter into are of a sufficient standard/quality to reduce the possibility of a borrower defaulting on its debts.
The following checks, among others, are performed prior to a business and their Project Financing or Invoice Factoring proposals being included onto the platform.
There is no minimum time frame, however the maximum time frame for an investment in a Project Financing or Invoice Factoring agreement is 3 months.
Investmint is not a deposit taking institution.
For the Project Financing agreements, interest is paid monthly, capital and interest will be repaid at the end of the term of the agreement.
For the Invoice Factoring agreements, the capital and interest is paid to you as soon as the invoice is settled by the client of the seller of the invoice.
Please allow for one to two working days for the interest payments to clear into your account. If the repayments fall on a weekend or on a public holiday, then the interest and or capital repayments will be transferred on the first subsequent working day after the money has been cleared.
While Investmint takes every reasonable step to mitigate, as much as possible, the possibility of default, we cannot guarantee the capital portion of your investment.
Investmint is NOT a Financial Services Provider. We facilitate the generation of loan agreements/investments for the users of the platform and we do not provide, in any way shape or form, financial services, financial products, advice, intermediary service, or any other subtypes of intermediary services being recommendations, guidance or proposals of a financial nature.
The follow project feature allows investors to track the progress of a project from the time it is live on the platform until it is fully funded. The investor who chooses to follow a project will be notified each time an investment is made into that specific project and when the project is fully funded. An investor is able to follow more than one project and can unfollow a project at any time. The follow project feature can be found on each project in the loan marketplace and is represented by a star.
The ROI calculator is a tool that investors can use to determine the return that they could potentially earn on a project. The ROI will calculate the potential return based on both the size of the investment as well as the status of the investor (whether they are a bronze, silver or gold investor). The ROI will be represented as an absolute amount, in rand terms.