The Securities and Exchange Commission (SEC) has approved the country’s first crowdfunding portal called Investree Philippines, Inc. The platform will be used to connect small and medium enterprises (SMEs) with banks and other lending institutions. 

Crowdfunding is essentially a method of raising capital for startups, usually through an online platform. Three parties are involved in the process:  the entrepreneur or the project owner, the supporters or the funders of the business idea, and the platform itself.

This can be donation-based in which resources are pooled to support a cause, or reward-based, which, in exchange for money, a “reward” is given to supporters of the project, usually a product from the entrepreneur. 

It can also be equity-based in which funders get a share of the project’s profits, depending on the entrepreneur’s discretion, or lending-based in cases when funders provide the money that the project owner pays within a certain time frame at an agreed upon interest rate. 

Investree’s registration as a crowdfunding portal in the country is valid for one year as of January 2021 and is subject to extension, depending on the SEC’s review of its first 11 months of operation.

Helping SMEs

Investree can help SMEs grow in two ways: purchase order financing or invoice financing. Purchase order financing will help small and medium enterprises by facilitating the financing of company expenses and business opportunities. Invoice financing assists small businesses by helping them fulfill demand through capital lending. 

The interest rate offered by Investree is at the one to three percent range, depending on the risk assessment Investree performs on your business. What sets Investree apart from traditional financing is that it “offers uncollateralized financing and can fast-track your application by consolidating all the requirements first before coordinating with [the business] for the rest.” 

For rapidly growing businesses who need a boost to fulfill their deliverables, this platform can help provide a much-needed solution to a potential cash flow problem. It’s important to remember that Investree is not the investor, but the platform that will help businesses connect with investors. 

Investree was originally founded in Jakarta in 2015 and is backed by such entities as MUIP, a unit of Japan’s Mitsubishi UFJ Financial Group, and Indonesia’s BRI Ventures. Now that it has set up shop in the Philippines, it will be operated by a joint venture between Gotianun-led conglomerate Filinvest Development Corp. and financial technology Investree Singapore Pte. Ltd.

Investree’s mission to provide MSMEs with extra assistance through crowdfunding is aligned with the Center for International Trade Expositions and Missions’ (CITEM) latest project: Sustainability Solutions Exchange (SSX). 

SSX aims to equip MSMEs with the information, materials, and connections to ensure the growth of local businesses within the country and around the world. 

SSX will be held [insert dates and details]. For more information, please visit [SSX socials/website and CITEM socials/website].

This story was originally published on F&B Report