Disclaimer: Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.
What can $100 really buy you today? To some, it can buy a nice 3-course dinner for two. How about a full tank of gasoline for your car? Perhaps even a week’s supply of groceries? The list goes on…
In today’s context, $100 might not be a lot to most of us. But rather than thinking of where to spend your next $100, why not figure out how just $100 can actually contribute towards your wealth accumulation goals? While there are many investments out there that allow you to start with as little as $100 a month, the investing platform I have found to provide great flexibility and superior returns is Funding Societies.
Before I proceed further, I must preface that I am currently an investor on Funding Societies’ platform.
Funding Societies is a crowdfunding (aka peer-to-peer) lending platform which serves as a go-between retail investors (like you and I) and Small & Medium Enterprises (SMEs). It is common for SMEs, the backbone of our economy, to face numerous challenges in an attempt to obtain financing from banks for their business activities. However, with the advent of alternative financing platforms like Funding Societies, SMEs that do not qualify under traditional means (i.e. banks & financial institutions) can still attain adequate financing and execute their business operations without compromise. The Funding Societies team will assess the eligibility of the SMEs before listing loan offers on the platform for investors to invest in. Investors on the Funding Societies platform can access the financial fact-sheets of companies before deciding which companies they’d like to provide financing to.
The mechanics of crowdfunding aren’t too difficult after all aye? But why Funding Societies? Well, here are some of the benefits that caught my attention in the first place!
Low Capital Outlay
If you’re a student like me, you’d be pleased that the minimum investment on a deal could be as low as $100. However, starting an account would require a minimum of $1000. More details on the account requirements at the FAQ.
Investors can expect returns that are much higher compared to other investments because it adopts a risk-based pricing model. I like to reinvest the earnings and let compounding boost the returns even more! But it’s just a personal preference.
Unlike most investments out there that tend to have a “lock-in” period for an extended duration, the loan tenures on this platform range anywhere from 1 to 24 months. I value the liquidity of my investments and this fits perfectly with my requirements.
In every crowdfunding deal, the Funding Societies founders and team actually invest alongside its investors with their own money. In doing so, they better align themselves with the interests of investors, something we don’t often get to see in other types of investments.
For those who are not as pro-active when it comes to looking for investment opportunities can exploit the auto-invest feature. Investors can set parameters and the amount they wish to invest should a loan opportunity meet their parameters. The funds are automatically invested every time a loan opportunity matches the parameters, so long as there is uncommitted capital (“uninvested” cash) left in the account.
All in all, I think Funding Societies is a great platform that serves to meet the needs of investors and SMEs in Singapore. As an investor with Funding Societies since June 2017, I’ve completed several financing deals where I have gotten back my principal + interest. The best part is that everything can be done via the mobile app! I will be documenting my experience as a crowdfunding investor on the Funding Societies Blog soon, so do follow the blog as well as their Facebook page for updates!
Also, if you haven’t already caught our feature video with Funding Societies at Invest fair 2017, you can catch it here.
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Till next week, have a good weekend!