altWings: A New Horizon in Invoice Discounting Investment with altGraaf

In the dynamic world of investments, those willing to take calculated risks often reap the highest rewards. altGraaf’s innovative invoice receivable financing products, such as altWings, offer a unique opportunity for customers seeking short-term, higher risk-adjusted fixed-income returns. This could reap significant financial growth for our investors.

What is altWings?

Working capital management is a genuine concern for any business today, as most invoices have a credit period of 30+ days. Invoice financing, the core concept of altWings, comes in here. It’s a financial tool that allows businesses to receive immediate cash flow by selling their unpaid invoices to a third party, in this case, individual investors, through altGraaf.

altGraaf is a platform that connects businesses needing invoice-receivable financing and individual investors. However, it’s important to note that not all companies that approach altGraaf for financing get their invoices financed. 

altGraaf’s stringent and meticulous credit screening process reduces as much risk as possible and brings in a strong sense of confidence amongst our customers. Our dedicated team of experts comprehensively analyses every company’s financial statement, cash flows, revenue earned, credibility of the company’s management, shareholding patterns, profit margins, and more. Only after a company meets altGraaf’s stringent criteria is it listed on our platform for individual investors to consider. All the information about each opportunity is shared on the platform so that investor can make an educated choice.

How does altWings work?

Let’s go through the altWings investment flow process: 

• Let’s say Chingo Chips (Seller) is a company that requires invoice receivable financing. Chingo Chips has sold goods to Bharath Retail (Buyer) and expects payments after 90 days.
• It reaches out to altGraaf to finance the invoices with a repayment tenure of 90 days and a yield of 12.5-14%. altGraaf does the required due diligence and concludes that Chingo Chips is fit for invoice receivable financing. 
• Then altGraaf lists Chingo Chips on its platform, through which individual investors can participate and invest against the invoice receivables.
• The funds that individual investors invest will go to Chingo Chips. After 90 days, Chingo Chips will receive the money against the receivables directly from Bharath Retail. Chingo Chips will transfer the funds to the investors through a regular escrow collection account. 
• One thing to clarify here is that unlike the other four invoice discounting products introduced by altGraaf, the payment from the buyer goes back to the seller and post, which the seller pays to all the investors.

Risks Mitigants

altGraaf takes sufficient risk mitigants to reduce the above risks to investors. Some of the risk mitigants include:

• Post Dated Cheques (PDC) or Undated Cheques for the invoices.
• altGraaf only onboards companies with good credit history
• Good transaction history of invoices and payments
• Validity of the invoices

Risks Involved

• Credit Risk is the ability of the borrower to repay on time.
• There is no bank guarantee or trade credit insurance to secure the invoices. Thus, if the buyer cannot repay, the investors may risk losing money. 
• altGraaf does not have control over escrow accounts. There is a commingling risk, as both the buyer and the seller could default or delay the payments. 

Conclusion

If you’re an investor with a high-risk appetite looking for great risk-adjusted returns to diversify your portfolio with alternative investments, invoice receivable financing through altWings can be a great choice. However, please read all the information carefully on each investment opportunity before investing. 

Explore our other Invoice Discounting products such as altSmart, altArmour, altBlu and altPack.

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