Factortrade – Procurement Services within the Factoring Market

Factortrade – Procurement Services within the Factoring Market

Project Cost: RM 2m to RM 5m

Amount Invested : RM100k

Amount Required : RM 2m to RM 5m

Knowledge / Experience Required:
strategy
finance
sale & marketing

Proposed Investor’s Role:
full time
part-time
as consultant

Industry:
trade
financial services

Project Stage:
early expansion
start-up

EXECUTIVE SUMMARY:

Company History:

Diligent Alliance Sdn Bhd was formed by 2 partner, Mr. Derek Lee and En. Radzi Ibrahim to venture into providing procurement services within the factoring industry in Malaysia. This is the first service of its kind in the country. En. Radzi is the CEO of the company and have 20 years of experience in the factoring industry with several companies. He has vast experience in the areas of marketing, operations, finance and top management. Mr. Derek Lee was from the banking industry and factoring industry holding key positions. He was formerly the vice chairman of the Malaysian Factors Association and is still the key person instrumental in the activities of the association.

Product / Service Description:

Factortrade is a form of bridging for the purchase of goods where the payment is secured via factoring facilities.

Business Opportunity:

The market is estimated at RM2.0 billion annually (statistics from MFA, Malaysian Factors Association). Factortrade is the solution for major problems faced by suppliers and vendors of mainly the Government, GLCs, etc which is unavaibility and difficulty in funding their purchases. Factortrade is focusing on a niche market segment and is in collaboration with established factoring institutions in the country.

Revenue Model:

Revenue is the profit margin on the goods sold. The business model can generate gross annual returns of 30% p.a. for the business, which is achievable via churning the capital up to 10 cycles annually. This is possible as risks minimised with the factoring mechanism and resulting in secured and the shortest tenor of payment.

Management Team:

The management team comprise of the two directors of the company. The organisation consist of two main departments i.e., operations and finance. The management/shareholders is involve in the day tod ay running of the business.

Current Status:

Currently we are ready to launch the service known as Factortrade. Collaborations with selected factoring companies have already been finalised. The required business infrastructure and system are in place. We are now actively looking for investors to provide the funding and be part of this venture.

Funding Milestone:

The funding is solely for the working capital requirement of the business i.e., for the purchases of goods. Funding can be based on tenor with an agreed fixed annual return rate payable every quarter, half yearly or annually.

Business Valuation:

For equity allocation, we are open to discuss based on the investor’s requirement. We are open to good proposals as our main priority is to get the business off the ground. However we shall appoint the investor to the board and the investor shall be in control of the funds they invested in.

Expected Return On Investment:

ROI offered is between 8% to 10% p.a. depending on the tenor of the investment.

Investment Risk and Mitigation:

The funds invested shall be control by the investor. The management shall market for low risks deals (trading projects, contracts, purchase orders etc) i.e., good terms deals and table it out to weekly directors meeting for approval whereby the investor shall have the final say to approve.

Exit Strategies:

We prefer that the investor remains with us for at least 2 years, we require the time to established the business and we shall be looking for strategic long term partners in the future to grow the business to a higher level.

CONTACT INFORMATION

Muhammad Radzi Ibrahim ( radziibrahim@yahoo.com)
Company Name: Diligent Alliance Sdn Bhd
Postal Address : No. 1-3, Jalan Solaris 2, Solaris Mont Kiara, Kuala Lumpur
State : Wilayah Persekutuan
Post Code : 50480
Country : Malaysia
Telephone : 03-62099991
Website : 03-62099992
Mobile: 0166347552

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