Who can apply to become a lender with Capital Match?
Any resident of Singapore (either an individual or a corporate) can become a lender on the platform. The only other requirement for now is to have a bank account in with a Singapore-registered bank.
Why should I invest my money through Capital Match platform?
Capital Match provides a novel investment opportunity: Fixed-income investment into local SMEs with an attractive return of 1.2-2% per month (~15-25% annualized). We provide a full legal and operational support putting forward to investors only fully assessed potential borrowers. In our role, we:
1. Screen potential borrowers
2. Prepare a loan request on their behalf
3. Facilitate the funding online
4. Process legal documentation
5. Disburse funds and collect monthly payments
6. Act on behalf of lenders for bad debt cases
Soon we will also offer an even better protection by partnering with a trust company offering investors the ability to hold their funds on a trust account.
What kind of companies can I lend to?
Capital Match works with Singapore-based SMEs with revenues of SGD 1-10m from diverse sectors.
How much can I lend?
The minimum investment amount per loan for now is S$1,000. The cap is the total amount requested by the borrower.
How much return can I make? Is there any guaranteed return?
The interest rate we charge the borrowers is in the range of 1.5-2.5% per month. The return you can make on your capital at risk is 80% of that interest (20% we collect as our commission) which yields net interest of 1.2-2% per month. However, the return is not guaranteed since your capital is at risk – there is a risk of 100% loss of capital and interest on a loan should a borrower default and debt recovery and legal proceedings are not successful.
How much does it cost? What are the fees?
The only fee we collect from the lenders is 20% commission on the interest collected from the borrowers. Upon each monthly repayment by the borrower, we disburse 80% of the interest to the lenders and collect the remaining 20% as our commission.
How does the registration and funding process works?
The process is following:
1. You register a user account account with us and create a profile on the platform
2. Upon our activation of your profile, you can browse available facilities on the platform
3. If you are interested in investing in any of them, you transfer funds to the bank account listed on the platform
4. We will reflect the new funds on your account balance within 24 hours – you can then select any of the available facilities and decide how much funds you want to commit
5. Once a minimum of 80%, or S$100,000 of the facility amount, whichever is lower, is subscribed and the borrower accepts it, we prepare the legal documentation for the parties to enter into the agreement
6. The funds are disbursed to the borrower and we set up GIRO on the borrower’s account for automatic monthly repayments
7. Every month we collect the repayments and update your account balance
8. You may request to withdraw your funds through the platform using the “Withdraw Cash” feature
How long does it take?
Registration process should take no more than 10-15 mins. Investment decision is up to you. The loan stays open on the platform for 14 days or until it is at least 80% subscribed and the borrower accepts it, whichever happens first. Once the loan is accepted by the borrower, we need no more than 1-2 days to prepare the loan documentation and finalize the funds transfer.
What documents do you require for the registration?
For now we only require the scan of your NRIC/Passport. We might contact you to confirm some information.
How do I commit funds?
Upon funding of a loan request, you can either transfer money to our account or write a cheque payable to the borrower. Soon we will also offer an even better protection to lenders by partnering with a trust company offering investors the ability to hold their funds on a trust account. With this solution we will ask the lenders to first transfer funds to the trust account so that we can easily disburse them to the borrower(s) (upon your instructions).
How long do facilities on the platforms stay open?
The facility will stay open on the platform for up to 30 days or until it is at least 80% subscribed and the borrower accepts it, whichever happens first.
How is the facility request finalized?
The facility request is finalized when the funds commitment from lenders have reached a minimum of 80%, or S$100,000 of the facility amount, whichever is lower, and the borrower chooses to accept the facility. At that point the funds disbursement is only subject to signing of the documents.
How can I monitor monthly repayments?
Our Platform provides you with updates on each repayment. You may also wish to contact us at firstname.lastname@example.org
How are the repayments calculated?
The repayments are calculated on either (a) interest only or (b) principal and interest basis (or a combination of both).
(a) The borrower repays every month only the interest and the principal is repaid in full at the end of the facility’s term. The calculations for the interest repayments (“Interest Repayment”) are following = Interest Rate x Outstanding Principal Amount.
(b) The borrower repays every month both interest and principal. Principal is repaid on an amortized basis (“Principal Repayment”) according to the following formula = Outstanding Principal Amount x [Interest Rate / (1 – (1 + Interest rate)-Tenor)] – Interest Repayment.
Total monthly repayments are then following = Interest Repayment + Principal Repayment. Each facility request sheet includes a schedule of repayments.
There could also be a combination of (a) and (b) with interest only repayments initially followed by principal and interest repayments.
Lenders are entitled to 100% principal repayment and 80% interest repayment. Capital Match also charges the borrower a monthly processing fee.
Can I get access to my money before the end of a loan term?
Outstanding principal cannot be accessed by the investor unless the borrower repays early.
Can the borrower repay early?
The borrower can repay early subject to a first 3-month non-repayment period. There is no early repayment fee.
What happens if the borrower misses the payments?
If the borrower misses the payments, Capital Match will follow up with the borrower to resolve the issue and strive to get the repayment as soon as possible. There is a late payment fee of 1% on the outstanding principal charged to the borrower for a late payment. We also charge a late payment interest of 0.1% per day on the outstanding principal payable to lenders for each day the payment is late until it is settled.
What happens if the borrower defaults on the loan?
In the event of borrower’s default on his obligations, Capital Match will engage a debt collection agency to collect the outstanding debt at the cost to the borrower. If this is unsuccessful, we would advise the lenders if they want to start a legal proceeding against the borrower. The cost of the legal proceeding shall be borne by the lenders.
How does the borrower guarantee the loan?
The borrower’s director(s) provide a personal guarantee for each loan.
How do you assess the risk of potential borrowers?
We perform a typical bank-like credit risk assessment of the borrower that includes review of financial statements, bank statements, tax assessment (corporate and of directors), credit rating (corporate and of directors) etc. We prepare cash flow projections of the company and determine the maximum loan amount as well as an optimal interest rate to compensate for the risk involved. We present the results to the lenders on the loan request available on them on the platform.
What rating agency does Capital Match use?
DP Information Group.
Does bankruptcy allow the borrower to get away with not paying the debt?
In a case of borrower’s bankruptcy, the lenders still have claim over his assets, though the debt owed by the borrower to lenders processed by Capital Match is fairly junior so there might be no assets left for the lenders. In such a case, given the personal guarantee pledged by the borrower’s director(s), the directors themselves are personally liable for the owed debt.
What does Capital Match do to prevent borrower fraud?
We run a number of cheques to prevent fraud on our platform, among others:
1. For all the parties registered with Capital Match we perform identity check (NRIC scan for individuals and ACRA’s Business Profile for companies)
2. We only register individuals and companies that have a bank account with a Singapore-registered bank – we also get access to 6 months of bank statements of the borrower
3. We run extensive credit risk assessment that involves checking both corporate and directors’ credit bureau scores
4. In all cases we arrange for at least one meeting between the borrower and our officer for us to better understand the financing needs and the specific situation of the borrower
Can I remain anonymous as an investor?
Yes, you can remain anonymous on the platform throughout the funding process. However, upon signing the lending agreement, the other parties will learn of your identity (which is required for legal reasons).
What kind of information can I see about the borrowers?
Each loan request has a loan request sheet that has detailed information on the borrower including his financials, credit risk overview etc.
Can investors contact borrowers directly?
Investors shall not contact borrowers directly unless agreed with Capital Match.
What are the legal documents that I will have to sign to legally lend money to a business?
The key documents that govern the provision of our services include Terms & Conditions and Loan Agreement or Promissory Note.
Is Capital Match subject to MAS or Moneylenders Act regulations?
Capital Match’s primary activities fall under the regulations of two institutions in Singapore:
Monetary Authority of Singapore
Capital Match is neither licensed by nor registered with Monetary Authority of Singapore since we do not deal in securities, nor provide any sort of financial advice. Only when the crowd funding activity involves the offer of securities in the form of debentures or shares, then it is subject to the requirements set out in the Securities and Futures Act (Cap. 289). Our role is limited to an administrative nature in arranging for its clients to enter into commercial papers and/or agreements (not involving an offer of securities). Capital Match does not take deposits as defined under the Banking Act (Cap. 19) of Singapore either.
Registry of Moneylenders (Ministry of Law)
Capital Match Holdings Pte. Ltd. does not fall within the ambit of the Moneylenders Act. As provided to us by the Registry of Moneylenders: “As your intended platform caters to corporate borrowers as your clientele, the lenders will fall within the definition of an excluded moneylender pursuant to section 2(e)(iii)(A) of the Moneylenders Act (Cap.188) (“MLA”). An excluded moneylender does not fall under the ambit of the MLA and therefore does not require a moneylending license.”
Should I seek professional information regarding this kind of investment?
You should always seek independent financial advice if you are unsure whether this product is suitable for you.
What are the tax consequences of lending?
Any interest earned through lending activity in Singapore is subject to taxation and should be declared to IRAS.