**6.Moolahsense(My second campaign with Moolahsense)**

**Note*the company name will not be revealed just like the previous post as my money are still inside moolahsense, haha(this is not a sponsored post by the way)**

__Issuer summary__

**Date of listing**: September 2017

**Amount**:$100,000

**Tenor**:12M

**Repayment type**: Equal installment

Quoting from the moolahsense website

**Equal installmen**t:A promissory note by which an installment of the principal subscription amoung and/or interest accrued and due up to the date of payment shall be payable on such dates as set out in a repayment schedule specified in the promissory note, and on the maturity date, the principal subscription amount would have been paid in full

**Repayment term**

**:**Monthly

**Repayment term**: Will be paid monthly

**Target interest rate**:18%P.A

Quoting from Moolahsense website

**Target interest rate**: The maximum rate the issuer is willing to provide the interest on the principal subscription amount which the issuer wished to obtain, as notified in writing by the issue to Moolahsese

**Purpose**: Working capital

Quote from valuepenguin:https://www.valuepenguin.sg/what-is-working-capital

**Working capital**: It is a concept to describe a business ability to cover its short-term operating costs- E.g For this campaign, I have funded $1000 into it(which is the amount I actually funded, which is the minimum sum that moolahsense accept for the campaign at that time)
- As the target interest rate is 18%, this means that at the end of the tenor, which is 12 month I will expect to receive $1180
- 100%=$1000
- 18%(Interest for 12 month/1 years)=$180
- 118%(The Principal + the interest for the two years=$1000+$180=$1180
- Since the tenor is 12 months, each month I will receive $(inclusive of interest) in payment/equal installment
- 1month=$1180/12=$98.33

__Summary company profile__- The issue is a company incorporated in Singapore in 1999.
- The Issuer is in the security services industry and has more than 50 employees. The Issuer provides security services (including the placement of security guards) to industrial, commercial and residential properties.
- The Issuer is registered with the Singapore Police Force as an Approved Security Agency. The Issuer also holds a Level Star bizSafe Certification (the highest level of such certification) issued by the Workplace Safety and Health Council of Singapore.
- The Issuer is also a member of the Singapore Business Federation and the Association of Certified Securities Agencies.

__Detail of purpose__- The Issuer seeks funding to provide working capital for security services contracts that have been awarded to the Issuer.

**Financial statement**Will only reveal a part of the financial statement due to confidentiality. As I have mentioned two weeks ago in my post, that I only mainly use this three ratio: current ratio, quick ratio and debt to equity ratio to decide in investing in a campaign, hence I will be showing its ratio below

The ratio is as follow

**(left side of the column is for the year 2016/right side of the column is for the year 2015)**__Year 2016/Year 2015__

**(Current ratio 2016**:0.5),(

**Current ratio 2015**:4.39)

- A simple ratio of current asset divide by current liabilities
- Current liabilities are debt that needs to clear in the short term(in a year)
- If a company has a current ratio less then 1.0, do not invest in it
- If a company has a current ratio more then 2.0, May consider investing in it
- The higher the current ratio, the better
- For the current ratio of 2015:4.39, it is higher than the recommended range(>2.0)
- For the current ratio of 2016:0.5, it is lower than the recommended range(>2.0)

**(Quick ratio 2016**:0.5),(

**Quick ratio 2015:**4.39)

- The quick ratio is almost similar to current ratio except that it is assumed that the company does not sell its inventories(e.g Toyota inventory is its car) or stock, it is still able to fulfill its debt
- If the company has a quick ratio of 0.75 and below, do not invest in it
- If the company has a quick ratio of 1.25 and above, May consider investing in it
- The higher the quick ratio the better
- For the quick ratio of 2015:4.39, it is higher than the recommended range(>1.25)
- For the quick ratio of 2016:0.5, it is lower than the recommended range(>1.25)

**(Total liabilities/equity 2016**:0.16),(

**Total liabilities/equity 2015:**0.41)

- The debt ratio is calculated by total liabilities divided by the equity
- If the company has a debt ratio of 1.5 and above, do not invest in it
- The company should essentially have a debt ratio of 1.0, if the debt ratio is below 0.75, do consider investing in it
- The lower the debt to equity ratio the better
- For the Total liabilities/equity
- For the Total liabilities/equity of 2016:0.16, it is in the recommended range(<0.75)

__Why did I invest in this loan?__- From the above, you can see that the current ratio for 2016 and quick ratio 2016 is out of the recommended range(>2.0 for current ratio 2016) and (<0.75 for the quick ratio 2016), however, the Total liabilities/equity is in the recommended range(<0.75). Looking at it now I will probably not invest in this as only Total liabilities/equity ratio is in the recommended range, But!!...
- I wanted to test out more of the moolahsense platform
- My previous campaign has a term of about 24 months, hence I wanted to find a campaign that has a shorter term like this campaign(12 months)
- Also, the target interest rate of this campaign is 18%P.A, much higher than my previous campaign of 10%, but of course higher interest rate comes with higher risk

As this is still an ongoing campaign, below is the repayment schedule so far

link on how too read the effective interest rate for moolahsense:http://letscrowdsmarter.com/understanding-interest-rates/

Monthly interest rate:Principal/start balance=$15.00/$1000=1.5%(Percentage conversion must *100)

Effective interest rate:1.5%*12=18%(Same as the target interest rate)

From the above picture, you can see that the Net repayment is at $91.68 instead of the $98.33 that I have mentioned above at the working capital, hence I will do a calculation here again

1-month repayment:$91.68

12-month repayment:$91.68*12=$1100.16

$1000(the amount I put in this campaign=100%

$1100.16=(100/1000)*1100.16=110.016%

110.015%-100%=10.6%

The target interest rate as you can see in my above post is at around 18%P.A, however, that is misleading, as I only gain about 10.6%(i shall call this net interest rate instead)in this campaign. To conclude, this means that if you invest in an 18%P. A campaign in moolahsense, you will get only about 10.6%.

The next few funding campaigns that I will update soon have a target interest rate of 24%P.A and you will see that the net interest rate will varies

As the current status of payment is late, as such, I will continue to update this campaign

Stay tuned to my next week post:moolahsense(my third campaign)!

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