There’s a reason why Invoice financing industry hasn’t grown in many parts of the world, while it has hit highest growth in some developed nations. The reason is “Lack of trust,” the only way it could be achieved is by bringing transparency to the system. Invox Finance is a platform based out of Australia which solves the problem. Let’s see how.
If you’re reading about Invoice financing for the first time, then Invoice Financing is a business setup where the companies sell their due invoices to the financiers/investors for a discounted price. These investors provide the amount instantly to the businesses and collect the amount from the buyers/customers after the expiry of the credit period. The process includes three parties; they are, Business (seller), the customer (buyer), and Financier (Investor.)
How does Invox Finance solve the problem?
Invox Finance is built on Blockchain. Thus it has one of most powerful features of blockchain which is called “Decentralisation.” Being a decentralized platform, it brings all the entities in direct connection with each other, thereby creating a trustworthy environment by establishing transparency. It not only solves the problem, but it makes invoice financing, even more, easier by allowing individual investors to get into it. Let’s see the features to know more.
Invox Finance allows all the parties involved to interact, connect, distribute and share information directly. Being able to do this directly enables them to establish trust with each other. Not only it establishes trust but also reduces the middlemen work. For instance, an Investor can get information about the customer (buyer) by checking his previous records with the credit rating system team (if they’re involved.)
2. Profitable for Businesses and Investors
Investors have limited amount to invest; if they put their money into the banks, they’ll get very less interest. However, investing their money in buying the invoices from the businesses would get them more interest compared to other sources.
Similarly, businesses end up paying high-interest rates to the banks or institutions, so if they get the individual investor investing in it, they can get loans at less cheap rates. This way, it is profitable to both investors and businesses.
3. Dynamic Invoices
In the traditional invoice financing setup, once the invoices are sent to financiers, any update made to it is not known to other parties. But with Dynamic invoices, built using Ethereum smart contract, one could get the corrections made in real-time. Every time an update is done, it’s reflected in the invoice. E.g., If the customer pays half of the amount, other parties can know that half the amount was paid.
4. Diversification of Funds
Individual investors are allowed in the system; this is a significant advantage. In addition to that, these small investors can diversify their small funds in different invoices. It means, an investor A can buy 10% of the invoice from Business B1 and can buy 20% of the invoice from Business B2 and so on. This way, he gets to diversify his funds into different businesses.
5. Reduced risks
As mentioned above, Invox allows the investors to diversify their investment. So if the investors make use of that feature and expand their funds, the risks will be reduced. For example, if the investor just invested in one business and if it turned out to be a SCAM, he would lose all his money, but with diversification being available, he wouldn’t be investing all his amount in a single business. Hence, there’ll be less or minimal risk.
The Invox Token and the ICO
The Invox token is also launched with the platform. The token would be used for rewarding the buyers and sellers for verification of the transaction. It is also important for the sellers to have it, because, without it, they won’t get access to the platform. To get access, the sellers must buy a yearly membership for certain amount of Invox tokens via Trust member program.
Any interested person can buy the Invox token at discounted rates from the ICO. As per the company, the reason for the ICO launch is to sell the membership of the platform with the token sale. If you’re interested, you can get to know more at InvoxFinance.io.