Alternative investing can feel like walking a tightrope, balancing risk and reward. If you’re a cautious investor, finding a product that offers strong returns with minimal risk can be tough. That’s where altArmour by altGraaf comes into the picture. altArmour was designed to enable investors to benefit from an alternative investment asset class – invoice financing in a secure manner. It provides individual investors with a simple, short-term investment option that combines protection with solid returns.
Let’s explore how altArmour could be the smart, safe choice for you.
What is altArmour?
altArmour is a unique investment product designed to enable individual investors to participate in invoice financing, a method through which companies raise funds against pending invoices.
By investing in altArmour invoices, you earn returns over a short period (30-90 days) while benefiting from 100% insurance coverage on both principal and interest. This makes altArmour a secure option for diversifying into alternative investments without taking on unnecessary risk.
How Does altArmour Work?
Here’s a step-by-step breakdown of how altArmour functions.
1. Initiating the Process: Raising Invoice with Trade Credit Insurance
Ratna Ltd. sells goods and services to Drip Studio Ltd. and issues an invoice after obtaining trade credit insurance to mitigate risks associated with the buyer’s creditworthiness. The insurance company evaluates Drip Studio Ltd.’s ability to repay and sets a credit limit accordingly, covering up to 100% of both the principal amount and interest for investors.
2. Listing on the altGraaf Platform
The seller needs immediate cash to meet its working capital requirements so while waiting for the buyer’s payment, it approaches altGraaf to secure financing against this invoice.
After thoroughly evaluating both the seller and the buyer’s creditworthiness, altGraaf lists the invoice on the platform, where individual investors like you can participate in financing it.
3. Secured Payment via Escrow
Once the financing period ends (typically between 30-90 days), the buyer (Drip Studio Ltd) transfers the funds directly into an altGraaf-controlled escrow account. This adds another layer of security, ensuring the money is managed transparently and safely before it is distributed to investors.
4. Handling Non-payment (if required)
In an unusual case, if the buyer fails to repay the invoice, the seller can file an insurance claim. After the insurer’s verification (which can take 3-6 months), the claim payout is deposited into the escrow account and redistributed to investors. This way, the investment remains protected.
Process to Claim Trade Credit Insurance with altArmour
In the rare event that a buyer defaults on the invoice, here’s how the insurance claim process works:
1. Notification of Non-Payment (NNP)
If the buyer doesn’t pay within the stipulated period, the seller (Ratna Ltd) must notify the insurer within 90 days of the default
2. Submission of a Formal Claim Request
The seller submits all necessary documentation, including unpaid invoices, proof of delivery, and buyer communication, within a three-month window
3. Claim Assessment
The insurer reviews the claim and ensures that all documents are in order. They verify that the non-payment is legitimate and that all conditions for the claim have been met
4. Claim Settlement
Once approved, the insurer disburses the claim, which can take 3-6 months depending on the complexity of the case. The payment is deposited directly into the escrow account and then distributed to the investors as per the terms
Key Risk Mitigants for altArmour
At altGraaf, we’ve built several layers of protection into the altArmour product to ensure your investment is secure:
- 100% Trade Credit Insurance Coverage: This ensures that both your principal and interest are covered, reducing the risk of loss in case of non-payment
- Escrow Account Control: All payments are handled through an escrow account managed by altGraaf. This ensures transparency and prevents unauthorized access to funds by sellers or buyers
- Robust Due Diligence: We perform extensive background checks on all companies seeking financing through our platform, ensuring that only credit-qualified borrowers are onboarded
- Strong Partnerships with Reputable Insurers: We work exclusively with trusted insurance providers to ensure that any claims are handled efficiently and with minimal delays
Understanding the Risks Involved with altArmour
While altArmour provides substantial protection through trade credit insurance, it’s important to acknowledge that some risks still exist.
For instance, insurance claims may take time to process, usually around 3-6 months, and in rare cases, insurers may approve only partial claims due to issues like incomplete documentation, disputes, or fraud. Or even though denial of claims is uncommon, it can still happen if certain conditions aren’t met.
At altGraaf, we work diligently to minimize such risks by conducting thorough credit checks and ensuring all transactions are transparent and properly documented.
Bottom Line: Is altArmour the Right Investment for You?
Whether you’re a risk-taker or a cautious investor, altArmour offers a smart way to explore invoice financing without compromising security. With its short-term tenure, high-return potential, and robust protection, altArmour can diversify your portfolio while keeping your investment safe.
As alternative investments grow, altArmour stands out as a reliable option to help you meet your financial goals.
FAQs About altArmour
What is the Minimum Investment Amount for altArmour?
The minimum investment for altArmour is ₹25,000. This limit varies for different products offered on the platform.
What Does Escrow Control Mean in altArmour Investments?
Escrow control is a process where a third party manages the seller’s escrow bank account, where funds are received from buyers. The fund outflows take place as per the terms to the intended recipients. This ensures the transaction is completed as agreed upon, providing security and trust for both parties. In the case of altArmour, altGraaf has the escrow control. It means that the escrow account of altGraaf controls the payments to and from investors, making it a safe option.
What is the Investment Tenure for altArmour?
The investment tenure of altArmour by altGraaf is 30-90 days.
Is My altArmour Investment Secure?
Yes, your altArmour investment is among the most protected of invoice discounting products as it is secured by Trade Credit Insurance (TCI).
What is Trade Credit Insurance in the Context of altArmour?
Trade credit insurance is a type of insurance that protects investors from losses if a customer does not pay their debts due to bankruptcy, insolvency, or other reasons. It provides coverage for the principal and interest on the investment, adding an extra layer of security to your investment.
