FAQs
Q: What is the Schmooze FM platform?
A: Our platform allows qualified borrower companies to obtain loans with interest rates that they find attractive or secure equity funding in their businesses. Our platform also provides investors with the opportunity to invest in notes that are dependent on borrower member loans with credit characteristics, interest rates and other terms the investors find attractive. As a part of operating our lending platform, we verify the identity of members, obtain borrower members’ credit profiles from lending partners and screen borrower members for eligibility to participate in the platform. We also service the member loans.
Q: Ah, missed it! What if I’m interested in a featured deal that’s expired?
If a deal has expired, generally it won’t be featured again for further investment, although you can still view details in the “Past deals” section. If there are a lot of requests to “re-list” a deal, it may be re-listed at the discretion of the company requiring funding with terms dependent on the prevailing requirements and operating conditions of the business at the time.
A company may request re-listing if it requires additional capital.
Q: What are the minimum credit criteria for companies to obtain a loan?
A: After we receive a loan request from a borrower member, we evaluate whether the prospective borrower member will be able to comfortably make their repayments. Our borrower member credit criteria are consistent with our funding partner’s loan underwriting requirements and require prospective borrower members to meet the following criteria:
- No debt other than the loan they will receive via Schmooze FM
- A minimum income ratio of two times: Total monthly interest plus monthly repayments of capital earnings after all monthly expenses
Q: What process does Schmooze FM go through before making an investment?
A:
Q: What does it cost to list or invest on Schmooze FM?
A: We charge borrower/investee members origination fees that range from 2.00% to 5.00% that are paid upon the issuance of the loan or investment capital. We charge investors a service charge of 0.50% of the investment and 0.50% on all amounts paid out by Schmooze FM to investors.
Q: What are the minimum and maximum investments?
A: You can invest any amount above the minimum investment up to the total amount of capital required. The minimum investment is stipulated for each deal featured.
Q: What sectors and countries do you cover?
A: Schmooze FM is focused on companies from all sectors in Frontier markets. From time to time we may feature companies from more developed countries based on the growth and earnings potential of the featured company.
Q: What due diligence does Schmooze FM conduct before making an investment
A: Schmooze FM assesses independently prepared financial statements, seeks third party verification of claims made during the application process and also utilises a network of certified financial and market experts to assist in determining market potential, risks and financial returns. If we’re not excited by the potential of a deal we won’t put money into it and won’t feature it.
Q: Do investors lend funds directly to borrower members?
A: No. For debt transactions, investors in the Notes do not lend directly to our borrower members. Investors purchase Notes issued by Schmooze FM Limited, the proceeds of which are designated by the investors who purchased the Notes to fund a loan to a borrower member originated through the Schmooze FM Limited platform. Whilst investors will not lend directly to borrower members they will, nevertheless, be wholly dependent on borrower members for the repayment of the Notes. If a borrower member defaults on the borrower member’s obligation to repay a corresponding member loan, Schmooze FM Limited will not have any obligation to make any payments on the related Notes.
Q: What are our Member Payment Dependent Notes?
A: Investors may buy Member Payment Dependent Notes issued by Schmooze FM Limited referred to as the “Notes.” The proceeds of each series of Notes will be designated by the investors who purchase the Notes of the series to fund a corresponding member loan originated through our platform to one of our borrower members. Each series of Notes will have a stated interest rate corresponding to the member loan’s interest rate. We will pay principal and interest on any Note you purchase in an amount equal to your pro rata portion of the principal and interest payments, if any, we receive on the corresponding member loan, net of our 1.00% service charge. We will also pay you any other amounts we receive on the Notes, including late fees and penalties, except that we will not pay to investors any unsuccessful payment fees, cheque processing or other processing fees, collection fees we or our third-party collection agency charge or any payments due to Schmooze FM Limited on account of portions of the corresponding member loan, if any, that Schmooze FM Limited has funded itself. The service charge will reduce the effective yield on your Notes below their stated interest rate. The Notes are special, limited obligations of Schmooze FM Limited only and not the borrower members. The Notes are unsecured and do not represent an ownership interest in the corresponding member loans, their proceeds, or the assets of Schmooze FM Limited.
Q: Who are the investors in our Notes?
A: Investors are individuals and organizations that have the opportunity to buy our Notes. Investors must register on our website. During investor registration, potential investors must agree to provide personal details for identification and anti-money laundering purposes, agree with the terms and conditions of the Schmooze FM Limited website and enter into an investor agreement with Schmooze FM Limited which will govern all purchases of Notes.
Q: What are the member loans?
A: The member loans are unsecured obligations of our borrower members with a fixed interest rate and an initial maturity of either three- or six-months. Each member loan is originated through our website and funded by Qotho Finance at closing. Loans are assigned by Qotho Finance or other funding partners to Schmooze FM Limited in exchange for the aggregate purchase price we receive from investors who have committed to purchase the Notes dependent on payments to be received on such member loan. Member loans are made without our obtaining any documentation of the borrower member’s ability to afford the loan. Qotho Finance determines this information.
Q: What support and services does Schmooze FM offer investors?
A: In the case of debt investments Schmooze FM manages collection of repayments and pays out capital and interest in proportion with the initial investment made. In the case of equity investments, Schmooze FM ensures that share registers are updated accordingly and that investee companies report and pay dividends as agreed. Investors are able to view the “My Account” section of the Schmooze FM website for a history of their key actions and investments on Schmooze FM.
Q: Why can’t I use my credit or debit card?
A: The answer is twofold, cost and security. Credit and Debit cards typically charge a commission of 2%, and while that’s fine for standard retail shopping purchases, its not practical for investments where the amounts involved are significantly larger than a typical shopping purchase. Credit and Debit card companies also hold onto funds for anything up to 30 days, providing us with only a guarantee of payment. Schmooze FM does not accept guarantees of payment as we don’t want to expose featured companies to default in the event that the guarantee from the credit card company is not honoured for any reason. Notes or equity can only be transferred on receipt of cleared funds, and the good old bank transfer is the most effective way of achieving this.
Q: How do investors receive payments on the Notes?
A: All payments on the Notes are processed through the Schmooze FM Lending Club platform. If and when we make a payment on your Notes, the payment will be deposited in your Schmooze FM Lending Club account. You may elect to have available balances in your Schmooze FM Lending Club account transferred to your bank account at any time, subject to normal execution times for such transfers (generally 2-3 days).
