The platform supports two types of legal structures - prepayment and true sale (including AR finance). In this article you can learn about the differences between these structures.
In prepayment finance, counter-parties include a prepayment payer and one or more sellers and funders.
Only prepayment payers can submit payables for prepayment.
Sellers are unaware of the programme and are onboarded to the platform discretely. This is done by setting up their accounts using a dummy representative email to ensure they do not receive platform notifications.
Payer accepts Irrevocable Payment Undertaking (IPU) upon submitting approved payables for prepayment and also accepts the Prepayment Payer Order Form.
The system looks for a matching investment strategy to purchase invoices.
A matching investment strategy for a given funder finds and purchases payer's payables. This funder accepts the Prepayment Funder Order Form.
Alternatively the true sale payer (if the facility is not AR) or the assigned fund manager uploads pre-approved invoices removing the need for the seller to upload invoices.
If the facility is not AR, the true sale payer accepts an Irrevocable Payment Undertaking (IPU) upon uploading pre-approved invoices or upon manually approving invoices.
Approved invoices go to the assigned fund manager who will make the final approvals prior to funding.
Once approvals from the fund manager are complete then the seller is notified to log in and sell their invoices.
The seller chooses to sell all eligible invoices at a discount in exchange for early payment.
The seller sells the invoices and accepts the True Sale or AR Seller Order Form.
The system looks for a matching investment strategy to purchase the receivables.
A matching investment strategy for a given funder finds and purchases the receivables. This funder accepts the True Sale or AR Funder Order Form.