> For the complete documentation index, see [llms.txt](https://stellar-vault-link.gitbook.io/stellar-vault-link-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://stellar-vault-link.gitbook.io/stellar-vault-link-docs/01-introduction.md).

# Introduction

## The Problem

Small and medium-sized businesses (SMBs) are the backbone of global trade, but they are chronically starved of working capital. The typical invoice payment cycle is 30–90 days. A business delivers goods or services today but waits months to be paid. During that wait:

* They can't pay suppliers on time
* They can't take on new orders they don't have cash to fulfil
* They turn to expensive bank loans or invoice factoring companies that charge 3–8% fees and take weeks to process

Traditional invoice financing (factoring) exists to solve this — but it is slow, expensive, opaque, and only accessible to businesses with established banking relationships.

***

## The Solution

**InvoFi** is an open-source, decentralized invoice financing protocol built on **Stellar Soroban**. It removes the bank from the equation and replaces it with a smart contract.

Here is how it works:

1. **A business registers an invoice on-chain.** The invoice (amount, currency, due date) is stored in the InvoFi Soroban contract and becomes a verifiable on-chain asset.
2. **Investors (lenders) browse the marketplace** and submit financing offers. Each offer specifies how much they will advance, at what interest rate, and for how long.
3. **The business accepts the best offer.** The contract records the acceptance and marks the invoice as Financed.
4. **At the due date, the business repays.** The contract marks the invoice as Repaid and the lender's offer as Repaid.

Everything is visible on the Stellar blockchain. No paperwork. No credit checks. No 3-week approval process.

***

## Why Stellar Soroban?

Stellar was chosen for InvoFi for three reasons:

1. **Speed and cost.** Stellar transactions confirm in \~5 seconds and cost fractions of a cent. Invoice financing is a high-frequency, low-margin business — gas fees on Ethereum would be prohibitive.
2. **Soroban smart contracts.** Stellar's native WebAssembly contract platform (Soroban) is purpose-built for financial applications, with strong type safety and predictable resource costs.
3. **Asset infrastructure.** Stellar has native support for custom assets (like USDC) without needing a separate token contract. InvoFi supports both XLM and USDC invoices.

***

## Who is InvoFi for?

### Businesses (Originators)

Any business that issues invoices to customers can use InvoFi. The typical user is a small business owner who has a large invoice outstanding and needs cash now, not in 60 days.

**To use InvoFi as a business:**

* Create an account (email or Freighter wallet)
* Register your invoice on-chain (amount, currency, due date)
* Wait for financing offers from lenders
* Accept the best offer
* Repay when the due date arrives

### Lenders (Investors)

Lenders are investors who want to earn yield by financing real-world invoices. Unlike DeFi yield farming, InvoFi yield is backed by an actual business obligation, not algorithmic token incentives.

**To use InvoFi as a lender:**

* Create an account (email or Freighter wallet)
* Browse the invoice marketplace
* Submit offers with your preferred interest rate and duration
* Track your active investments in the portfolio view
* Earn yield when invoices are repaid

***

## Key Properties

| Property           | Description                                                        |
| ------------------ | ------------------------------------------------------------------ |
| **Trustless**      | Smart contracts enforce all terms — no counterparty trust required |
| **Transparent**    | All transactions are public on the Stellar blockchain              |
| **Permissionless** | Anyone with a Stellar wallet can participate                       |
| **Non-custodial**  | InvoFi never holds user funds — wallets sign directly              |
| **Free to deploy** | Vercel + Supabase + Stellar testnet = $0 infrastructure cost       |
| **Open source**    | MIT licensed — fork, extend, or deploy your own instance           |


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