Helping SMEs Fund Business Growth: Q&A with Nalinee Chinowuthichai Co-Founder of InvoiceInterchange

LadyBoss spoke to Nalinee Chinowuthichai, who leads technology strategy and development and manages day-to-day business operations at InvoiceInterchange. She shares her personal motivation and future of the business. 

InvoiceInterchange is a peer-to-peer invoice trading marketplace where investors and SMEs converge. Providing working capital solutions to fund business growth, the Nalinee and her team is passionate about making business finance a better place – flexible, faster and price-transparent. As of December 2016, they have traded over S$10m since late 2015.

LadyBoss spoke to Nalinee to know more about InvoiceInterchange.

Cash flow is the lifeblood of any business. As the saying goes: “revenue is vanity, profit is sanity, but cash is reality”.

Q: Tell us about your business. How long you’ve been doing it, and who your users are? 

A: InvoiceInterchange is a peer-to-peer invoice trading marketplace where we help businesses raise fast and flexible working capital through our simple online platform.  As of Dec 2016, we have traded over S$10 million dollars since late 2015.

Q: What is invoice trading, and how does it work? 

A: Invoice trading is a process of where businesses can access funds quickly by selling off outstanding invoices via an online platform to investors.

How it works is simple:

Businesses register their interests with us. We then run an assessment to understand the business and ensure it falls within our criteria.  Once we can accept them and are on-boarded, businesses can upload their outstanding invoice(s) for auction as and when needed.

Investors will compete to invest in the invoice and funds are then transferred to the business within 24 hours.

This allows businesses to better manage their cash flow, take on more projects / orders which in turn increases their revenue.

Many businesses suffer from late payments. In fact, 98% of Singapore businesses experienced late payment in 2016. Funds tied up in unpaid invoices limits a business’ ability to grow. By unlocking the funds in unpaid invoices, it frees up working capital to support business growth.

Q: What is invoice financing, and what are the benefits for SMEs to use it? 

A: Invoice financing is a financial instrument where businesses use outstanding invoices or accounts receivable to obtain funding. A significant advantage versus other forms of financing like loans is that invoice financing turns assets on the balance sheet into cash (as opposed to adding a liability with loans).

Cash flow is the lifeblood of any business. As the saying goes: “revenue is vanity, profit is sanity, but cash is reality”.  No business can survive without adequate cash flow despite having large revenues.

How invoice finance helps support cash flow and increase revenue:

  • Increases predictability of incoming cash flow. Not knowing exactly when a customer is going to pay is stressful as there are operating expenses that cannot be delayed and have to be paid monthly for example wages and CPF. Hence, by having the certainty of accessing funds through invoice financing thus knowing exactly when your cash is coming in allows business owners to plan and execute their next moves.
  • Many businesses suffer from late payments. In fact, 98% of Singapore businesses experienced late payment in 2016. Funds tied up in unpaid invoices limits a business’ ability to grow. By unlocking the funds in unpaid invoices, it frees up working capital to support business growth.
  • Businesses are able to tap into additional funding to grow businesses as and when needed. Taking on more or larger orders means that a business needs to have more cash upfront to purchase inventory, hire suppliers etc.

Other benefits:

  • Funding is scalable to your business growth. As accounts receivable grow, larger funding will be available for businesses to tap into
  • Funds can be released in days rather than weeks or months compared to loans. Hence, allowing businesses to tap into funding in a timely manner.

Q: What type of assessment procedures, and criteria do you have before SMEs can use your platform? 

A: Invoice financing assesment criteria is different to traditional loans.  We focus more on the quality of the invoice and who the end customer is. Invoice financing can benefit companies who do not have a long history of credit data or fixed assets to provide as collateral to banks for loans or other banking facilities.

Our invoice financing criteria are:-

  • Singapore registered company
  • Sells services or goods to other business
  • Minimum annual turnover of SGD 250k
  • Minimum of 6 months operating history
  • Sells to at least one large customer (e.g. public listed, blue-chip companies, MNCs)

Q: What were you doing before entrepreneurship? Tell us about your background and how it helps you with what you are doing now? 

A: I am a qualified Software Engineer, with a Master in Operations Management, both from the University of Melbourne.

Prior to InvoiceInterchange, I was in banking in Australia and the UK, primarily in investment banking, delivering multi-million-dollar business IT projects, ranging from bank system integration, improvement of operational efficiency to regulatory requirements implementation.

These have equipped me to define and constantly improve our operational model with bank level control and scrutiny.  As well as the strong ability in managing our technology to meet both our customers needs and compliance/regulatory requirements.

Q: What’s the idea behind InvoiceInterchange? How did you first come up with the idea of InvoiceInterchange? 

A: Brian (co-founder of InvoiceInterchange, leads business development and strategy and oversees the continued growth of the company) and I have always wanted to start a business where we could utilise our skills and experience.  Making business finance a better place – flexible, faster and price transparent is what we are passionate about and believe we can really make an impact to society in this area.

Both Brian and I came from the banking industry.

Brian, a qualified accountant and myself, a software engineer, both worked in banking and understand the financial constraints business owners face and how the lack of access to funding is holding back good businesses. In addition, my family ran a factoring business. With the rise of peer-to-peer financing in other markets coupled with our complementary skill sets and experience, InvoiceInterchange was conceived.

Q: What makes InvoiceInterchange different from its rivals?

A: InvoiceInterchange is a technology focused finance provider that has built a robust invoice trading platform from the view point of and for our customer.  We are in the market to revolutionise short term financing, making it simpler and faster for businesses to obtain funding.

We are focused on one product i.e. invoice finance, and do it extremely well – all online, smooth, fast, simple, transparent and fair pricing.  Using the latest technology and data, we drive the change in financial offering for our customers. It allows our SME customers the flexibility to manage their cash flow in a new innovative way.

Q: Give us a case study of how a user might use InvoiceInterchange? 

A: Some of the reasons that our customers chose us:

  • Experiencing high growth, need additional cash flow injection to help secure new projects/new orders.
  • Businesses with lumpy cash inflows e.g. seasonal industries where there are spikes in sales at different intervals.
  • Experiencing long overdue payment from large companies, effecting company’s cash flow. Invoice financing can help smooth out cash flow, allowing businesses to continue to operate in a more controlled manner
  • Unsatisfied with traditional forms of invoice finance where it lacks flexibility and slow in application approval and the release of funds. Some financiers take up to 3 months to approve an application.  With us, we offer a 24 hour application approval once we receive all necessary documents and information

Our retention rate is almost 90%.  This resonates in our customer acquisition trend, where many of our customers come through word of mouth and referral.

Q: In terms of sales & marketing, how do you reach your customers, and what works? 

A: We believe in offering a quality product where we put our customer needs at the fore frontal.

Our retention rate is almost 90%.  This resonates in our customer acquisition trend, where many of our customers come through word of mouth and referral.

We are also building a strong brand and reputation in peer-to-peer invoice trading. With our strong track record and online presence, we are able to attract customers through online sources.

Q: Where do you see the future of InvoiceInterchange?

A: We want to be a regional invoice finance platform and at the forefront for businesses looking for short term working capital.  We are working on expanding our business beyond Singapore, as well as offering new products to further meet our customers’ needs.

We are also working on our ‘SuperEngine’ where we will be able to assess businesses within minutes rather than hours using innovative approaches, as well as the ability to efficiently risk manage large-scale transactions.

Q: Tell us about your Number 1 business challenge? 

A: Attracting talent is the most challenging part in the start-up world.   The calibre that fits our team is very unique, not only do you need to be smart and capable but need to share the same vision.  Working in a start-up is totally opposite end of the spectrum to the corporate world. We encourage our team to constantly find better ways of doing things, and continuously improving ourselves to better serve our customers.

Fast forward to today, when I see our customers’ products on supermarket shelves or their events taking place, I feel a high sense of satisfaction knowing that we have made a contribution in helping them achieve their dreams.

Q: As an entrepreneur, what motivates you personally?

A: I grew up in a family of entrepreneurs, my grandparents, my parents and my extended family.   My father used to run an invoice factoring firm in Thailand.  I see the positive impact that he had on his customers, where he helped them grow through efficient financing.  Fast forward to today, when I see our customers’ products on supermarket shelves or their events taking place, I feel a high sense of satisfaction knowing that we have made a contribution in helping them achieve their dreams.

Q: What would be your advice for aspiring women entrepreneurs keen in starting a business in Fintech?

A: For me, starting a business requires commitment and an great passion in what we do.  Business is full of obstacles, challenges and setbacks, the love of what I do helps me keep moving forward and overcome them.  Your passion will also resonate to your team, your investors and your customers as well.

Last but not least, be patient.  Success does not happen overnight.  Celebrate small wins along the way.

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This article was written by the LadyBoss team. Want to be a contributor? Drop us an email at editor@ladyboss.asia

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