How it works
How to invest (for Kapital Boost members)
- Browse Funding
- Browse SME funding campaigns across different sectors and countries
- Invest from as low as SGD500 on short- term, legally-structured funding opportunities with attractive returns
- Conduct Due
Diligence & Analysis
- Conduct your own due diligence using the in-depth information provided
- Have questions? Contact us at firstname.lastname@example.org or get in touch with business owners directly
- Fund SMEs, Earn Attractive Returns
- Determine the amount you want to invest
- Earn annualised return on investments of 15-24%
- Support community growth by funding SMEs
How to raise funds (for SMEs)
- Meet The
- At least one year of operation
- Minimum annual sales revenue of SGD100,000
- Historical positive free cash flow
- Have purchase order or work order that requires funding
- Due Diligence &
- Collection and verification of information on SME
- Use of proprietary credit scoring to determine SME's risk profile
- Determine the deal size, tenor, and asset purchase markup
- Get Funded
- Launch of crowdfunding campaign
- Funds are transferred to SME upon campaign success
- SME purchases assets on behalf of financiers; buys assets from financiers at an agreed date in future
Murabaha (cost-plus) Crowdfunding
Kapital Boost offers funding to small businesses through a Murabaha or “cost-plus” arrangement – the purchase of an asset by investors for a small business, with the agreement to sell the product to the small business at a marked-up price some time in the future. The payment and asset purchasing flow between Kapital Boost, the small business, and the seller/supplier are shown and explained below.
- After a Kapital Boost member (financier) commits to investing in a crowdfunding campaign, a Murabaha agreement is signed between the financier and the small business. The financier agrees to purchase assets to be used by the business, with the condition that the business will purchase the same assets from the financier at costs plus a profit margin at an agreed time in future.
- The business is appointed as an agent to purchase assets on the financier’s behalf - this is called an Agency Agreement.
- The financier transfers funds to the business for the agreed asset purchase. The business purchases the assets on the financier’s behalf and takes possession of them.
- The business pays for the purchase of assets from the financier according to an agreed schedule, which is usually on a deferred payment basis, and at 'cost plus a profit margin'.
- With the full purchase of assets by the business, the Murabaha agreement is finalised and terminated.
Mudharaba (profit sharing) Crowdfunding
We offer a Mudharaba crowdfunding for businesses or projects which are not able to raise financing using a Murabaha structure. The key requirement for Mudharaba is that a profit sharing ratio for a financing project is determined between Kapital Boost, investors and the small business prior to launching a crowdfunding campaign. Based on financial projections on the project, investors can estimate the return it can expect to get at the end of the investment period.
This funding structure is more suited for projects which has clarity on the expected revenue and costs. To reduce credit risks for investors, Kapital Boost also prefer businesses with existing purchase orders, which require funding, or businesses having financial support from a strong parent.
- After a Kapital Boost member (financier) commits to investing in a crowdfunding campaign, a Mudharaba agreement is signed between the financier and the small business. The agreement clearly states the role of the small business as an expert in the investment of capital and the role of the financier as the provider of capital. Based on their roles, a profit sharing ratio for the project is determined between the two parties.
- Following project completion, the earnings are calculated. The investment principal is returned to financiers and whatever profits are earned from the project are divided between the financier and small business based on the agreed profit ratio.
A loss arising from the project will be borne by the financiers, except in the case of 'negligence of duty' by the small business.