ONLINE food ordering platform Oddle and Goldbell Financial Services (GBFS) have partnered to offer cash advances of up to S$30,000 to help Oddle’s food and beverage (F&B) merchant partners get through the Covid-19 crisis.
Officially launched on Tuesday, the GBFS Merchant Cash Advance (MCA) initiative leverages sales data from Oddle’s platform to rapidly perform credit assessments and disburse funds to applicants in as little as 48 hours. It promises interest rates starting from 1 per cent per month, and repayments will be deducted from the borrower’s Oddle sales.
“In the current Covid-19 pandemic, where many traditional lenders have tightened their lending criteria or are even adopting a wait-and-see stance, GBFS’ MCA programme is here to help F&B merchants gain access to additional working capital fast,” said Tan Chun Hao, head of strategic partnerships and projects at GBFS, which is the financial services arm of vehicle leasing company Goldbell Group.
The programme is part of GBFS’ partnership initiative Polaris, through which GBFS looks to co-create unique digital financing solutions with other companies.
Said Mr Tan: “We started working with Oddle as they have a business model and value proposition (to help restaurant owners) that we share a passion for.”
Through the MCA initiative, Oddle is able to offer a financial solution to its merchants beyond its domain expertise in tech and e-commerce, while GBFS gets to reach a relatively new borrower class through Oddle’s connections with the F&B industry.
Mr Tan noted that the MCA fills a gap between a working capital loan and venture debt for smaller businesses, which often struggle to satisfy the conventional metrics used to gauge repayment ability, like debt servicing ratios and strong credit history.
Industry rates for working capital loans range between 7 and 18 per cent per annum, although this has come down to as low as below 3 per cent with the introduction of an up to 90 per cent risk-sharing scheme by the government.
GBFS expects lower risk of default from borrowers under the MCA scheme, since it will be developing their credit profiles and projecting future earnings based on transparent, accurate data from Oddle.
Having Oddle handle repayments also reduces costs for GBFS, allowing it to pass the savings on to borrowers in the form of lower facility fees and sustainable interest rates.
Mr Tan added that GBFS aims to speed up the funds disbursement from 48 hours to 24 hours, as it has for applications to the Helping Our Promising Enterprises (Hope) fund that it administers through its private debt investment platform Goldbell Evolution Network.
In comparison, traditional loans can take one to two weeks to be approved and disbursed.
GBFS has allocated S$2 million to the MCA programme, and may increase the funding if demand proves overwhelming.
“We believe that F&B (and even retail) businesses, ranging from hawker stalls, Kopitiam chains to the larger F&B groups, can all benefit from the MCA programme that we have launched,” Mr Tan said.
“We will continue to focus on this space by providing sustainable and affordable financing and will consider expanding and working with partners who share our passion in helping the F&B industry tide through this Covid-19 period.”
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