1. What is the difference between Moneyit and invoice factoring?
Traditional invoice factoring make credit available to a supplier on an invoice issued to a customer. The credit provider will verify the invoice legitimateness and correctness and either make a credit facility available to the supplier, normally 60% of the value of the invoice and at a cost of between 3-5% of the invoice amount; or buy the invoice from the supplier at a discounted amount, normally at a discounted value of 7 – 15% of the invoice value. Fraudulent and incorrect invoices and unknown charges at the customer processing are major concerns with invoice factoring.
Moneyit does not factor or discount any invoices but instead relies on the processed credit balance of the supplier with the debtor. The debtor provides Moneyit daily with an electronic update of the outstanding credit balance of the supplier in the accounting system of the debtor. I.e., there is no room for error as the balance includes all debits or credits charged by the debtor for damage, demurrage, penalties, other expenses, etc. The fact that Moneyit gets an updated debtor balance daily means the supplier has access to credit for services delivered and invoiced within 2 – 3 days from delivery. The Moneyit platform delivers and present a much more efficient, cheaper and less risky debtor discounting solution to the SMME and Money Providers.
2. Can any person register to use Moneyit?
Any small business can register on Moneyit for credit. The only requirement is that the business you deliver services is a registered debtor on Moneyit.
3. How many debtor accounts can I have on Moneyit?
You can have as many debtor’s trade accounts as you want. Only requirement is that your debtor must be registered on the Moneyit platform.
4. Do I need to go through the same credit application as with a bank?
No, there is no credit application required. You qualify for credit on Moneyit on the strength of your debtor, the fact that your debtor is registered on the platform and the cession of debt security in favour of the Money Provider.
5. How much will it cost me to use Moneyit?
Moneyit charge a fee of 0.90% on all credit advances against your debtors. This fee is deducted and paid to Moneyit from your available credit on the 25th of each month. There are no account fees. Bank fees with the payment to beneficiaries are charged at the same cost and fee structure as levied by the bank processing the payment. You will also pay an interest to the Money Provider who makes the credit available to you. Interest is charged at a per annum rate for the credit advance period to repayment.
6. What if the business I work for is not registered on Moneyit?
You can contact us, and we will approach your debtor and assist to register on the Moneyit platform.
7. What is the % credit I will qualify on my debtor credit balance?
The % credit afforded against a debtor balance is decided by the Money Provider and can differ from debtor to debtor and is determined by the risk appetite and potential financial risk view the Money Provider take on the debtor.
8. Why must my debtor pay monies due to me to the account of the Money Provider?
The Money Provider takes a cession of your debt with your debtor as security for the advance credit available to you. To make sure that the Money Provider is paid back the capital afforded and interest on it, the debtor is instructed to pay all monies due to you to the nominated account of the Money Provider. The Moneyit platform calculate the amount and interest payable to the Money Provider, deduct it from the payment, and the remaining surplus amount due to you is paid to your nominated bank account.
9. What is the security for my credit?
You sign a cession of debt in favour of the Money Provider as security for your credit.
10. Am I still responsible to invoice the client?
Yes, you are responsible to invoice your client and to make sure that your debtor has all the required documentation to process your invoice. Moneyit are not involved or have no responsibility with regards to invoicing for your debtors.
11. How do I make payments from my credit to 3rd party bank accounts?
You can load beneficiaries on the Moneyit platform for payments. Making a payment is as easy to select a beneficiary, select the debtor trade account you want to make the payment from, and press pay. The Moneyit platform is integrated with its partner banks in SA. It sends an instruction to the bank to take the amount of the payment from the Money Provider account and pay it to the beneficiary bank account. This is a seamless process that happens instantly and behind the scenes.
12. Is Moneyit a bank?
No, Moneyit is a technology service provider who manage the process and rules for credit agreed between the Money Provider and a supplier against the credit balances of the supplier debtors. Moneyit does not provide any credit to you; neither receive or take any interest or charges on credit advances, other than your agreed service fee payable to Moneyit for the platform service.
13. What happens with my surplus money that is paid to the Money Provider account?
The surplus amount, after repayment of the capital and interest costs to the Money Provider, is paid into your own bank account within 24h from receipt of a payment by your debtor to the Money Provider.
14. What will it cost me as a business to register? Do I have an increased financial liability if I join the Moneyit Platform?
It will cost you nothing. As a debtor you will be required to on-board the supplier for the purpose of the daily supplier credit balance update. You are also required in terms of the cession of debt to make all future payments to the nominated bank account of the Money Provider. Lastly, you are required to send to Moneyit electronically daily the updated debtor balance of the supplier and payments made to the Money Provider. The Moneyit IT team works with you as a business to implement the data interface, through existing plug-ins to your system or an API. You are not required to provide any additional financial guarantee or security to the Money Provider for the credit advances to the supplier.
15. Can I as a business benefit from BEE benefits if I register on the Moneyit Platform?
You can earn BEE credits on your supplier or enterprise development by participating in a program that assist SMMEE suppliers and service providers with credit for cashflow purposes. We discuss this aspect and how it can help you in con junction with your BEE advisors.
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