What is the maximum funding size I can get through P2P?
Unlike equity crowdfunding, there is no restriction in funding amount under Recognized Market Operator’s (“RMO”) guideline, legislated by Securities Commission Malaysia (“SC”); a statutory body entrusted with the responsibility of regulating and systematically developing the capital markets and oversees all of the approved P2P platforms in Malaysia.
There are many factors that determine your P2P funding amount;
- P2P platform’s investment capacity, some of the p2p players have a bigger pool of investors that can provide timely and bigger fund size for eligible SMEs
- Your cash flow, especially monthly retained cash in banks; Example:
Company A makes RM100k revenue average per month credit into a bank account, and paid out a total of RM50k by the end of the month, as expenses, purchases and salaries etc. the retained cash would be RM50k. With that, you may get roughly about RM300k- RM600k financing for 6- 12 months tenure.
- Using any proven orders, invoices or receivables as proof of capacity to repay, with that it increases the revenues or income in near future. P2P platform will provide financing for purchasing in order to make the deals successful. The platform may request for notification or non-notification to the invoice’s payer in this financing. And may request due diligence on the payer or direct payment from them.
- On very rare occasions, an issuer may offer a P2P platform any kind of collateral to increase its funding amount.
In a nutshell, the p2p funding amount depends mainly on the issuer’s capacity and sales revenue; the bigger it is, the more fund will be offered by the platforms. Plus, it is based on proven cash flow or orders. Hence, p2p is suitable to use for short term (1 – 12 months) financing needs with fast approval and process time. Applicants should expect of increase in funding size if there are revenue increments over the period.