Funding Societies Crowdfunding Platform - Review for Investors

Funding Societies Crowdfunding Platform - Review for Investors

Best platform for investors seeking to invest online using P2P/Crowdfunding

Good for

  • Investors who prefer an online P2P/Crowdfunding platform with a strong performance record and high asset quality
  • Individuals that value investing with a platform whose executives invest in the same deals

Bad for

  • Investors that want to purchase shares of equity of a business

Editor's Rating

5.0/5.0

Funding Societies stands out from other P2P/Crowdfunding investing platforms and SME lenders for several reasons. From an investing perspective, the platform's asset quality (approximate 1% default rate & 90% on-time repayments) is unmatched. Additionally, the platform has provided great returns over the past few years.

Summary of Funding Societies Crowdfunding Investment Platform
Lowest long-term default rate of P2P platforms (approximately 1%)
Low minimum investment per campaign (S$20)
Funding Societies' executives also invest through the platform, aligning their incentives with investors

Table of Contents

What Makes Funding Societies Stand Out to Investors

Funding Societies provides an excellent opportunity for crowdfunding investing in Singapore SMEs. In general, SME P2P investing presents added risk, compared to other investments, given that companies seeking this financing tend to do so because they do not qualify for traditional bank loans. This highlights the need for a platform like Funding Societies, which features the best asset quality of all platforms in our review. Its default rate (approximately 1%) matches those of high quality commercial banks and it features exceptional rate of on-time payments (approximately 90%). It has completed over 480,000 deals amounting to more than S$550 million, which further supports its strong performance track record.

Additionally, Funding Societies founders and employees are unique in this space for investing in every opportunity on the platform along with their users, which indicates that the platform is incentivized to keep investors' best interests in mind. Finally, Funding Societies offers "Auto-Invest", a free tool that allows investors to automatically allocate funds to investment opportunities based on preferences of tenure, interest rates, and industry. There are a few drawbacks of the Funding Societies platform. First, it does not offer equity investing. Also, its 18% (of interest earned) investor fee is comparable to some of its competitors, but some platforms charge less expensive fees.

Investment Opportunities at Funding Societies

Funding Societies offers investors a variety investment opportunities. These include short to medium-term unsecured business loans and invoice financing. The tenure of these investments options ranges from 3 - 24 months and 30 - 90 days, respectively. Funding Societies business and invoice financing loans generally earn 8 - 18% annual effective interest rates.

Business LoanInvoice Financing
Annual Returns Range8 - 18%8 - 18%
Investor Service Fees18% of interested earned18% of interested earned
Minimum Investment per CampaignS$20S$20
Initial DepositS$500S$500
Loan Duration1 - 12 months30 - 90 days
SecurityUnsecuredSecured and unsecured

All of Funding Societies investments are unsecured, meaning that borrowers do not provide collateral for the chance that they cannot repay. This increases both the risk and the potential return of these investments. Invoice financing tends to present lower risk and returns than unsecured business loans, because invoice financing is based on the value of goods/services that the borrower has already provided and is owed from its customers. This makes the loan more likely to be repaid compared to business financing, which can be used for any number of purposes. Funding Societies requires that business loans are personally guaranteed (a legal promise to repay) by the director(s) of the borrowing company.

Funding Societies' Crowdfunding Platform's Recent Performance

Funding Societies has a great performance track record, highlighted by its impressive default rate of just 1% since 2015. Additionally, the platform has provided impressive returns in recent years. With that said, past performance does not guarantee future results and investors must conduct their own research and due diligence on individual investments.

YearWeighted Average Annual ReturnNon-Performing Loans (90+ days)
201716.21%0.08%
201811.73%0.00%

Investor Eligibility Criteria

Consider this if you prefer a platform with strong performance record, high asset quality, and low fees and minimum investment requirement

Investor Service Fee 18% of interest earned
Typical Returns up to 8 - 18%
Min Investment Requirement S$20
Investment Horizon 1 - 12 months

Funding societies is easily accessible for most investors. For example, the minimum investment per campaign for both investment types is S$20, which is significantly lower than the requirements of some of its competitors. Additionally, there is no application fee.

  • At least 18 years old
  • S$1,000 initial deposit
  • Minimum investment per campaign S$50
  • Free application

Comments and Questions