SINGAPORE: Alternative financing has been a lifeline for marketing and distribution firm JuntoSTARC during this pandemic.
The firm distributes branded earphones, speakers and power banks to major retailers and online platforms.
With more gadgets now in demand amid the rise of virtual workplaces, the need to fill up stocks has become critical.
All of this is happening in the context of a global semiconductor crunch, which has led to longer lead times and higher prices.
Businesses such as JuntoSTARC have, as a result, found themselves in need of additional funds to purchase goods earlier, or to maintain more stock.
JuntoSTARC has been tapping on invoice financing from Validus Capital over the past two years.
The financing is collateral-free and allows the firm to get paid earlier and fund new shipments, which cost around US$100,000 to US$150,000 per month.
“They buy the invoice and finance it, and … help us to free up cash from the retail side. It’s always better to have a bit more on-hand. To plan more rather than keep a very, very tight cash flow,” said Mr Edmond Ting, managing director of JuntoSTARC.
JuntoSTARC is among the 30,000 SMEs that have used the financing offered by Validus.
The fintech lender operates in Singapore, Indonesia, Thailand and Vietnam.
Loan disbursements grew 30 times in the past year, helping cross the S$1 billion mark. The firm expects to cross the next billion mark in the next year.
“We’ve kept it very basic – the invoice requirement, as well as the confirmation from the buyer. When they need a term loan or a working capital solution, we literally just take credit bureau records of the director and six months of bank statements, and that’s literally about it,” said Mr Vikas Nahata, co-founder and executive chairman of Validus Capital.
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