Crowdfunding intermediaries may run factoring-based or receivables-based crowdfunding operations. These crowdfunding operations consist of the financing of the project sponsor’s accounts receivable in order to meet short-term capital needs to pursue their operations. In the case of factoring, or “invoice crowdfunding”, a crowdfunding intermediary may connect potential crowdinvestors to the seller of an invoice (the project sponsor). The crowdinvestors are then reimbursed by the debtors of the invoice seller. In the case of receivables-based crowdfunding, the crowdfunding intermediary provides a loan, funded by crowdinvestors, to the project sponsor using the invoices as collateral.
Recommendation: ACfA Label Category 2
