What are the risks involved in invoice discounting and how does Tap Invest mitigate them?

This type of investment asset class has the following risks associated with it:

1. Credit Risk, i.e. the inability of the Company to pay the amount owed to Investors due to its financial status
2. Fraud Risk, i.e. the Company has generated a fake invoice and is raising capital on them
3. Payment Risk, i.e. delayed payment to Investors

The following are steps that Tap Invest takes to control and/or reduce the aforementioned risks:

1. Mitigate Credit Risk - Financial due diligence ie a detailed credit analysis is performed by the Tap Invest Investments team on the Company raising the working capital
2. Mitigate Fraud Risk - Invoices are verified by the Tap Invest team with the purchaser of goods through email confirmation before a deal goes live
3. Mitigate Payment Risk - eNACH mandates are set up in advance, equivalent to 100% of amounts to be repaid in order to ensure timely and hassle-free repayments. Date-less security checks are also collected from the Company equivalent to 100% of the amount to be repaid.

For any additional queries, feel free to e-mail us at the following e-mail address: support@tapinvest.in