KapitalBoost Lending Platform - Review for SME Borrowers

KapitalBoost Lending Platform - Review for SME Borrowers

Great financing opportunity seeking asset purchase financing

Good for

  • SMEs that aren't eligible for traditional asset purchase financing from banks
  • SMEs with purchase orders

Bad for

  • SMEs seeking financing greater than S$150,000
  • SMEs seeking immediate financing
  • Businesses seeking loans for general purpose

Editor's Rating

4.5/5.0

KapitalBoost gives SMEs the opportunity to finance the expansion of their business without the hurdles of a bank loan. The Islamic crowdfunding platform is unique in offering Singapore SMEs asset purchase/work order financing through a Murabaha (cost plus profit) structure. Additionally, KapitalBoost offers a higher approval rate for funding applicants than banks.

Summary of KapitalBoost Lending Platform
Only online lender in Singapore to provide asset purchase financing
No early repayment fee
Cash disbursement: within 35 days
Lower revenue requirement for business loan than banks: S$100,000 per year
Maximum purchase order financing amount: S$150,000

Table of Contents

What Makes KapitalBoost Stand Out to Borrowers

KapitalBoost is an alternative to traditional financing through banks as well as standard P2P/Crowdfunding platforms. As an Islamic crowdfunding site, KapitalBoost provides financing to Singapore SMEs that require assets to complete work for customers. The platform does not charge a traditional interest rate on financing. Instead, through Murabaha (cost plus profit), the SME purchases the required asset on behalf of the financiers. Then, at the end of the financing period, the SME repays the financiers for the asset and pays financiers a percentage of the profit earned per the agreed upon profit sharing ratio. SMEs may view this form of repayment as less risky and cheaper compared to traditional loans that charge interest, since their repayment amount won't be fixed and will depend on the success of their business. While KapitalBoost's profit sharing model may cost very successful firms more than the interest fees of a traditional loan, it is generally safer for most borrowers.

KapitalBoost does not charge an early repayment fee, unlike other P2P/Crowdfunding platforms including Funding Societies or banks such as Standard Chartered. However, KapitalBoost does charge SMEs a 3 - 4% success fee, which is standard for P2P/Crowdfunding sites. Invoice financing is not available to Singapore SMEs through KapitalBoost, as it is only available to SMEs in Indonesia.

Drawbacks of the platform include that KapitalBoost does not offer the largest funding amounts (MoolahSense offers business loans of S$50,000 - S$5,000,000+) or the fastest disbursement (Funding Societies offers loans within 1 business day with FS Bolt). Finally, KapitalBoost provides funding within 35 days, which is likely quicker than asset purchase financing from a traditional bank, but slower than general purpose business loans from other online platforms.

KapitalBoost Financing Features

FeaturePurchase Order Financing
Maximum Financing AmountS$150,000
Duration90-360 days
Success Fee3 - 4%
Collateral RequirementSME director's personal guarantee & purchase/work order from customer

Who Can Borrow: Eligibility Criteria

Businesses seeking financing through KapitalBoost must have an operating history of at least one year, at least S$100,000 in annual sales, and a positive free cash flow in the past year. Purchase order financing applicants must have purchase/work orders from customers.

How to Apply: Application Process

KapitalBoost has an easy application process that offers a higher approval rate and less paperwork compared to traditional banks. The application requires basic company info and either financial report(s) or bank statements from the last 12 months.

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