A guide to P2P Financing and P2P Investments

Funding Societies is now Malaysia’s leading P2P Financing platform, making it the preferred alternative financing option for SMEs across Malaysia. It is also one of the nation’s leading P2P Investment platforms, where anyone can invest in up and coming Malaysian enterprises to earn high returns at low investment. 

P2P Financing

How it works

P2P Financing

In the case of Funding Societies, P2P Financing is when investors lend money to businesses through an online platform. Businesses may apply for financing with Funding Societies, and once they have been vetted, the businesses will be added as investment opportunities on a dedicated platform. Funding Societies investors will then choose how much they would like to put forward as an investment into that business, effectively crowdfunding the amount of financing that was approved in the application. 

P2P Investment 

Following that thread of thought, Investors can choose the business they would like to support based on a fact sheet of the SME. Funding Societies does not disclose the SME’s specific information, but provides information on its investment value, as per the compliance and legal guidelines. 

The investment amount starts at RM100 with almost no cap. Investors have full autonomy with how they would like to manage their portfolio. However, for the uninduced, there is a bot on the platform that you can choose to use if you’d like to diversify your portfolio automatically. 

Pros and Cons of P2P Investment

Pros.

Higher returns 

P2P Financing offers a much higher return on investment compared to more traditional methods for investments. Which means if you are investing in a business or SME via P2P Financing, you’re probably earning a lot more compared to investing in a fixed deposit.

Secondly, with Funding Societies as with other P2P platforms, returns are awarded monthly instead of annually, and there is a low initial investment amount of only RM100. So, almost anyone can get in on this deal. 

Diversified risk

With P2P Investments, you can spread your capital against multiple financing opportunities. Take the phrase ‘don’t put all your eggs into one basket’ to heart. This methodology helps to ensure that you are not risking your capital in a single investment but, ensuring a return on multiple investments.

Access and choice 

With access to a simple online platform, Investors can pick and choose the tickets they would like to participate. With Funding Societies, Investors will also receive an email alert for new opportunities. Everything can be handled remotely with the ease of an app or a computer. 

P2P Investments are also a great option for anyone who needs full access to their cash at any given time. Unlike with fixed deposits and trading, you can withdraw your money easily in case of an emergency. With P2P, you are not bound by cycles and year-long deposit schemes. 

Cons.

Higher risk 

With higher returns comes higher risk. While your capital is protected by the company, with every investment, you run the risk of losing on your return. Funding Societies offers multiple opportunities for SME financing, and it is up to you as a user to understand them all and make informed decisions on where you’d like to crowdfund. 

Rest assured, the company will do everything possible to protect your investments in any case. 

Too many options

As mentioned previously, P2P investments offer a visibly wide range of investment opportunities. Unlike with trade and insurance investments, you have full visibility of the business you are pouring your money. There is no agent, or go-between to help manage your portfolio. So you’ll need to get on the DIY train and know your stuff before investing blindly. 

P2P Financing with Funding Societies

There are a variety of products offered at Funding Societies made for Malaysian SME’s, readily available and easily accessible. From smaller micro-financing to invoice financing, if you are an SME in need of a cash flow solution, this is the place to be. 

Three of the most popular financing products available are listed below in the illustration:

The table below describes product offerings.  

 

Micro Financing  Business Term Financing  Invoice Financing
Financing Amount RM3,000 to RM100,000 Up to RM1.5 mil Up to RM2 mil or 80% of Invoice Value
Tenure  Up to 12 months Up to 18 months Up to 18 months
Interest rate (per month)  1.5% 1.0% to 1.5% 1.0% to 1.5%

 

Are you interested? 

If you are an SME looking to get financing from Funding Societies, then here is a crash course in the requirements you need to meet. 

To be eligible, your SME must be a sole proprietorship, partnership, limited liability partnership, a private limited company (non-subsidiary of a listed company) or unlisted public limited company registered with SSM. 

Your company will need to have a minimum of 30% local shareholding by Malaysians, and the business must be in operations for a minimum of 6 months. 

Some Perks of P2P Financing with Funding Societies

Here are a few reasons why alternative financing is the way to go. With Funding Societies, there is no collateral needed to apply for financing. Application is a quick and easy plus, you have flexible repayment options. 

Unlike most traditional banks, approvals and processing for financing with an online platform like Funding Societies are much faster. That means you will know if you’re eligible for financing sooner rather than later. With a faster approval process, cash flow issues are resolved much faster. 

Check out more information on our website and feel free to chat with us for your enquiries. We hope you found this article helpful and that you are inspired to grow your business with Funding Societies. 

 


Plan to diversify your investment portfolio? Click here to start your investment with Funding Societies Malaysia.

Need funds for your business? Click here to register and check your eligibility.

View our Disclaimer here.

Disclaimer: The information provided to you in this blog post is intended only for general information purposes only and does not constitute legal or other professional advice on any subject matter. The materials and the information provided are not intended to be and do not constitute an advertisement or solicitation.  In no event will Funding Societies be liable to any party for any direct, indirect, incidental, special, consequential or punitive damages for use of such information by you or any unauthorized third party.