It is common for companies to receive payments with deferred checks, and the need for cash often leads them to discount them at unfavorable rates. The venture MiCheque (micheque.uy) is a platform that seeks to be an alternative in this situation for small and medium-sized enterprises (SMEs). The idea is that the entrepreneur puts his check on sale and in a few hours receives the money in cash.
In March 2017, this venture began operating with the support of seed capital from the National Development Agency (ANDE), C Sinergia and the Center for Innovation and Entrepreneurship of ORT. MiCheque is a nexus between two needs; it unites companies that want to discount checks profitably, with investors who have financial liquidity and want to make money quickly.
For Milton Rodriguez, one of the co-founders of MiCheque, the benefits of using their services are clear: "We bring together the person who needs cash, which will end up being very expensive, with the person who needs to place money quickly and profitably. We make those two points come together, and a good result is achieved for both".
The service is free of charge for companies that cash checks. MiCheque does receive money from investors. The business model of this venture has always aimed to help SMEs, that's why they charge their services on the profits that the investor receives. The investor only has to choose the check he wants to buy via web and then make a bank transfer. "We get the investor a good option, and for that service, for that added value, we charge 24% on the profit," Rodriguez explains.
So far there have been more investors who want to compare, than companies that place their checks for sale. The entrepreneurs who are in charge of the project explain that this is because the profits that investors reach are large. There are checks that last only 10 minutes published: a few minutes after they are offered, the sale is already made.
"Now we want to reach more SMEs, that they know us, that they know that we are a profitable option. But what happens is that the one who is in a small business is focused on getting it forward, and often do not have time to learn more options, "acknowledged Milton Rodriguez.
Variable amounts
With no requirements, more than check data, SMEs can access the discount. MiCheque proposes that in less than 48 hours the discounter receives his money, thanks to the automation of the platform.
MiCheque "reverses the power relations", since the discounter sets the amount he wants to receive for his check, and the investor has to buy by accepting that proposal.
There are no minimums or maximums for placing a check for sale. The ones that sell the fastest are the ones that are at rates similar to banks. "A bank charges you a rate of 1.5% per month, but it is very difficult for a small business to meet the banks' requirements," Rodriguez said.
The entrepreneur understands that the bureaucracy in which you enter to be able to discount a check through a bank, often makes SMEs resort to lenders that charge very high rates, usually 7% monthly interest rate.
The partners of MiCheque consider that the business is rounded also for the investor, who can make an investment with very little money, and in a few weeks he recovers it.
The amounts of the checks are variable, Rodriguez says that many investors decide to buy several checks of low amounts: "for a check of $?20,000 the investor can pay about $?19,300". He points out that if you think about it in net numbers it seems very little money -it would be about $?700 in this example- but in reality the profit rate is high.
Checks arrive in both dollars and pesos. It is usual that $?20,000, $?30,000 or $?50,000 are offered; but there are also cases of higher amounts. A few days ago a check was sold for US$?37,000, and some time ago another one for US$?60,000 dollars.
How does it work?
Both those who want to discount their checks and investors must register on the site micheque.uy. The system asks for name, email, cell phone, and identity card; and in case of being a discounter, the account number to receive the payment. Once the user contacts MiCheque, and gives the details of their check, the platform verifies the data and performs an analysis, to ensure that the check is cashed. However, the platform does not give 100% guarantee that it will be cashed. After that, the offer is published on the web, and from that moment on, investors are able to buy. When the purchase is completed and the investor makes the deposit, MiCheque gets the physical check and delivers it to the investor.
Source: The Observer
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