Populous is a peer-to-peer platform that uses blockchain to provide small and medium-sized enterprises a more efficient way to participate in invoice financing.
Having a consistent cash flow is a serious problem with many SMEs. Late invoice payments cost small businesses in the United Kingdom over $2 billion each year in fees and missed opportunities. Using invoice financing, businesses can sell their outstanding invoices at a discount to quickly free up some cash. The person buying the invoice effectively takes it over and receives the money when the client pays.
Populous uses blockchain technology, XBRL data, and the Altman Z-score formula (more on this later) to expand invoice financing globally and create an overall improved system.
Who Are the Founders of Populous?
Populous was founded by two twin brothers from south London Steve and Sam Williams.
Steve Williams graduated in philosophy from London Metropolitan University, and since November 2016, he is the acting CEO of Populous. Sam Williams turned to other business ventures, founding The Trend View and Zloadr.
What Makes Populous Unique?
Populous aims to innovate the way liquidity is handled in small and medium enterprises. By introducing blockchain technology and smart contracts, the platform allows peer-to-peer interaction between businesses, lenders and invoice settlers. This means that the completely decentralized system charges significantly lower fees on liquidity loans and does not use intermediaries to facilitate the connection between lenders and borrowers.
Invoice selling is a relatively new financial tool that allows businesses to get loans on their outstanding invoices to use the underlying capital even if the customer has not yet paid the invoice. Populous transfers the process of lending money backed by invoices onto the blockchain, making it more scalable, faster, and easier for enterprises to use. The network has attracted funding from big firms, such as Fireblue Capital.
Populous use Altman Z-score formula
Populous analyzes the credit risk of invoices by using the Altman Z-score formula on real-time XBRL data. This data is publicly available and includes business information such as the debtor’s value, the amount of cash on hand, and the creditors that are due within a year.
With the extracted XBRL data and the Altman Z-score formula, the Populous team has created their own in-house credit rating system. Because of this, they have no need for an external credit agency, saving them a significant amount of time and money.
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