Domestic and Export Invoice Factoring and Discounting :
Domestic Factoring provides short term working capital and cash flow solutions for your sales within India. Besides prepaying your invoices, we also provide Sales Ledger Management and Collections services for your receivables.
You assign your receivables arising from your domestic sales to Factoring Company against the following services:
They prepay your receivables up to 80% of the amount
Benefits of Factoring facilities are:
It is a revolving Unsecured Working Capital facility which will help in upfront realization of your future receivables.
No penalty interests to be paid on the overdue Invoice.
For exports, our lending is non recourse. We don’t ask for any collaterals nor post dated cheques in export factoring. We do domestic factoring as well but with recourse.
This finance facility is over and above your Maximum Permissible Bank Finance (MPBF). No requirement of No Objection Certificate (NOC) from your existing Banker for availing the limits.
This line of Credit does not occur in your Balance Sheet i.e. it is an off-balance sheet product, which helps in improving the Company’s Cash flow and thus the Current ratio, Debt Equity ratio etc. for the Company.
Brief write up on Factoring:
Factoring is a service where as a provider of goods or services, India Factoring pre-pays against the credit invoices(Unsecured lending) that an Exporter/Supplier regularly raise on their established clients. In settlement of this obligation, the overseas clients pay Factoring Company on the respective due dates directly.
· How does Factoring benefit you as an Exporter/Supplier?
Improves Cash Flow – immediate cash upon presentation of invoices
We collect on your behalf – you need not spend on chasing overdue debts
Avoid language and time zone issues with your overseas debtors – we use correspondent network to collect debts.
Avoid losses due to bad debts – we credit protect your export buyers
Fully unsecured – No securities to be provided
Improve your Balance Sheet ratios – Off Balance Sheet solutions
Increase your commercial competitiveness
· When does Factoring Apply?
o Sales on open account credit terms
o Continuous business relationship with your buyers
o Clear title of receivables
o Assignable receivables
o Clean / Clear performance of the seller
o No counter-trade
Product Offerings:
o Export Factoring (Non-Recourse basis)
o Anchor Based Factoring – Domestic
o Domestic Factoring (Recourse basis)
Key Advantages of Factoring:
Encash your receivables upfront
Balance sheet improvement – off Balance Sheet lending; hence reduction in the Debtors resulting in the improvement in cash flow, current ratio and debt equity ratios etc..
Credit protection – backed by credit insurance on the buyer(protects from this risk of bankruptcy, defaults)
Hassle free from legal and regulatory issues (as it is a Cross Border transaction)
Collection – As an AD Category III Bank we can collect the documents and directly send it to the Buyers
Elligibility :
The firm should be a manufacturing one and our client should be an Indian Entity.
PAT of the company should be +ve for last two years.
Turnover of the company should be INR 500 Mn and above.
Minimum limit to be set INR 50 Mn. Maximum Value for domestics – INR 170 Mn, for exports – INR 600 Mn.
Credit period to range between 30-120 days.
Commodities – We deal with everything except for Gems & Jewellery, Real Estate, Perishable food items.
For export factoring, we have a tieup with 80 major countries in the world except for sanctioned and OFAC countries. Also we don’t do African countries except for South Africa.
Prepayment % is 90% in export factoring and 80% in domestic factoring.
Request you to please get in touch with us for any further assistance / clarifications.
Sudheendra Kumar ( Mobile /WhatsApp: 91-9820088394)
Follow us on LinkedIn:
https://www.linkedin.com/company/intellexconsulting
https://www.linkedin.com/company/intellexcfo-com
https://www.linkedin.com/company/venture-streets
