Advanon keeps customer funds (from Platform Investors as well as from SMEs, i.e. Borrowers or Sellers) completely separate from its own liquid funds. For this purpose, we keep separate accounts at our commercial banks. In addition, our efficient processes ensure that funds never remain in these separate accounts for more than 1 or 2 days. They are normally transferred on the day the payment is received or the day after. In the event of bankruptcy, these accounts would now first be frozen by a bankruptcy trustee. Existing funds would have to be ‘segregated’ – which means the legal owners (i.e. Platform Investors or Borrowers or Sellers) would be identified. Due to the ongoing documentation of all financing transactions on the Advanon Platform, this is possible without gaps and unambiguously. Given the official, administrative or bureaucratic character of bankruptcy proceedings, this would probably take several weeks. As far as repayments of Borrowers or Sellers to Platform Investors are concerned, which are only due after the time of bankruptcy, these payments could be ‘diverted’ by the bankruptcy trustee: in this case, Borrowers and Sellers would make their payments directly to the Platform Investors.
Updated on September 24, 2019