Am I eligible to be an investor at Velotrade?
The products offered in the Velotrade website are only available to Professional Investors, as defined in the Securities and Futures Ordinance, Chapter 571. Link here
Upon signing up you are required to confirm you are a Professional Investor
How do you source for invoices?
Velotrade has a network of eligible businesses who are thoroughly vetted prior to being able to use our services.
Where are my funds kept?
Your funds are kept in an escrow account maintained with a licensed global trust company, secluded from Velotrade funds.
When can I withdraw my funds?
Funds that are non-deployed can be withdrawn anytime. Funds that are deployed become available once the transaction is settled
Is there a minimum investment?
The minimum initial investment is USD 100,000 (or equivalent). However each auction is split into smaller tranches allowing Investors to diversify exposure.
What is Velotrade role?
Velotrade provides the technical infrastructure, handles the origination and carries out extensive due diligence and robust anti-fraud procedures. We also look after the settlements pre and post auctions.
What is the range of yield I can expect?
The yield assigned by Velotrade on an auction depends among other things on the creditworthiness of the Seller, the quality of its customer (i.e. The Debtor) and their existing business relationship.
The bulk range of auctions is estimated to yield 5% to 10% with a small number of auctions yielding above 10%
Why are receivables a clever transaction?
Trade receivables can enhance returns on short to mid-term portfolios. They generally have low correlation to traditional asset classes such as equities, real estate and fixed income. Portfolios consisting of receivables are also well diversified across a number of debtors in different countries and sectors. The average tenor of each receivable is typically 60-90 days.
Do I earn interest on non-deployed funds?
Funds that are idle in the escrow account will still yield interest comparable to a bank's overnight deposit.
How does a typical transaction look like?
For ease of referencing we have outlined the diagram below assuming there is only one Investor that deposits money into the escrow to buy a single invoice only.
Note that Investors are allowed to buy invoices up to their available balance held in the escrow account. The diagram below is just a fictional example and it may not represent the actual workflow.
- Seller transfers the legal title of the invoice (i.e. The receivable) to Velotrade
- Velotrade transfers full title to the Investor
- Investor transfers the money to the escrow account
- Advance money minus Velotrade fees is paid to the Seller
- At pre-agreed payment date, the Debtor (i.e. The Seller’s customers) settles the full value of the invoice
- Advanced money plus interest is repaid back to the Investor
- The Seller receives the balance minus interest
Do I need to understand about trade finance to buy invoices on the platform?
In the Velotrade platform you would be provided with robust information to make an educated analysis. Companies data and key business analytics are extracted from the database of a world leading information provider with daily updates.
How is risk evaluated?
Velotrade managers and associates have extensive knowledge and expertise having worked in financial institutions covering senior roles in trade finance operations. Velotrade also benefits from the expertise of the insurance company providing independent review of risk profiles to better assess credit worthiness of its customers.
How do I purchase an invoice?
The Velotrade auction mechanism allows you to manually select the invoice (in the auction) to buy. Alternatively, you can use our automated algorithm that will buy portions of the available auctions according to the parameters that you pre-set (such as target yield, size limits, countries and others).
What happens if an invoice doesn’t get paid?
In the event the Debtor refuses or is unable to pay, Velotrade would implement recovery from the Seller. Should the recovery from the seller be unsuccessful then Velotrade would hand over the claim to the insurance company.
Velotrade stipulated a policy with a world’s leading insurance company. Credit Insurance is an effective financial risk management tool that safeguards Investors against losses arising from debtors’ non-payment.
- Effective control of bad debts
- Access to credit expertise, market knowledge, debtor assessment and information from an international credit insurance company
- Global debt collection services for faster and more efficient recovery timings
What currencies does Velotrade accept?
Velotrade has multi-currency trading capabilities, especially with major currencies.