Credit assessments will be based on assessing the borrower's and buyer's (in case of invoice financing) ability and willingness.
For assessing ability, FS looks at a number of financial tools to evaluate the credit worthiness of a potential borrower. Much of the evaluation relies on analyzing the borrower's P&L, balance sheet, cash flow statements, inventory turnover rates, debt structure, management performance, and market conditions with the context of the loan quantum and loan tenor.
For credit worthiness, FS will look into history of trustworthiness, a moral character, and expectations of continued performance demonstrate a debtor's ability to pay. Mainly via the borrower's and PGs' past credit obligation repayment records and litigation (if any).
A summary of our due diligence scope (may vary from case to case basis):
1. Site visits (Physical verification)
2. Sighting of original documents (bank statements, invoices etc.)
3. BRI (Business interest and litigation info) on Directors & PGs
4. BRC on Company
5. CBS (individual credit facility) of PGs
6. KYC/AML checks
7. Due Diligence checks on debtors (for IF)
8. Financial Analysis
Based on the above data collected, we prepare factsheets for Investors considerations that will be available for viewing during a pre-crowdfunding period. This puts our assessment into words and figures for better clarity, so that Investors can make a more informed decision.
More details and a sample of our factsheet can be found here: