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Vendor Financing

Working Capital is one of the important aspects of all the businesses. Nowadays there are different innovative financing products available in the market. Considering the gaps in the working capital cycle different instruments are designed. As every debt instrument is meant to resolve some gaps or challenges in the business, vendor financing also has its role to play.

Features of Vendor Financing

What is Vendor Financing?

Vendor financing is a type of debt instrument where the funding can exclusively be used to make the payment towards your designated vendors or suppliers.

In the case of the manufacturing and trading industry, keeping the operation running requires heavy working capital support. Sometimes, due sudden rise in demand you need urgent funding to pay your vendor to procure the raw materials, you may need to purchase the raw materials to take advantage of price fluctuations and sometimes may be because of the cyclical nature of the raw materials availability. In all these cases vendor Financing works well.

How Vendor Financing Works?

1. Financial Documents Review

Every debt funding instrument will be issued only with good financial ratios. If the financial instruments are comfortable with the financial ratios they may take a step forward towards the sanction process.

2. Vendor Analysis

3. Payment towards vendors

Nowadays all these limits are approved through virtual accounts. MeTerkar Capital Response you need to make the payment towards your vendor through the vendor portal of the Financial Institutions.

Sometimes the vendor payments are limited to the specified vendors and specified material. As per the payment terms, you can make the payment towards your vendor and you should make the payment to your Financial Institutions as per the agreed payment terms. In case you fail to justify the payment cycle, it negatively impacts your credit score and also disturbs the relationship with the lenders. So timely payments are important.

Vendor Financing Process Flow

1. Checking the Demand - Supply and Working Capital Finance Gap

In most cases, all the business owners intend to have the working capital facility through the CC Facility. In case the business owners think there is a substantial increase in demand and you have a shortage of funds for the working capital, in that case, you should approach the Terkar Capital team.

2. Documents And Instrument Work Out

The Terkar Capital team will review all the documents, your requirements, and the availability of the existing working capital limits and try to figure out the exact working capital gap. As per the available conditions, the Terkar Capital team will suggest the apt debt funding instrument including – with or without collateral. In this case, let us and the Terkar Capital team decide to go ahead with Vendor Financing.

3. Choosing the right Financial Institutions

After thoughtful financial analysis, the Terkar Capital team will decide on the Financial Institutions considering raw material and the material to be purchased, vendor’s credit rating, company financial ratios, and work orders with the company.

With that detailed analysis, the Terkar Capital team will decide on the Financial Institutions. And execute the whole process – right from the documentation to getting the sanction letter and disbursement of the funding on the favourable borrowing terms. The Terkar Capital team always makes sure to raise the funds where the company should remain the ultimate beneficiary.

4. Sanctioning and Setting up Limit

Under some of the conditions, the Financial Institutions may add some pre-disbursement conditions. The Terkar Capital team makes sure to justify those terms and conditions and get limited approval and updates on the virtual account – assigned for the client. Once the limit is assigned you have the liberty to make the payment to your vendor.

5. Rotation of Payment Cycle

In the sanction letter, the Financial Institution defines all the terms and conditions of use of the funds. One of the important aspects is to rotate the funds. If FI has given the conditions for 90 days working capital cycle. You can upload the balance to your virtual account on or before the 90th day and use it at your convenience.

Here you will be charged for the interest only for the amount and duration you have used the funds.

Below is the Pictorial Standard Presentation of the Process

*The process may vary as per the client’s specifications.

Documents Required for Vendor Financing

Aadhar card
PAN card
Driving license
Voter ID
Passport, etc.

Ration Card
Electricity Bill
Lease Agreement
Trade License
Passport
Tax Invoices, etc.

Bank Statements
CIBIL
Business Bank statements
Asset Counts, etc.

Vendor Financing at Terkar Capital

At Terkar Capital, we understand the importance of working capital in sustaining smooth business operations. Vendor financing is a tailored debt instrument designed to help businesses bridge gaps in their working capital cycles. Tailored for manufacturing and trading industries, it enhances cash flow, strengthens supplier relationships, and offers flexible repayment terms.

We ensure a streamlined approval process, with a thorough analysis of financial documents, vendor details, and payment terms, to help businesses manage vendor payments efficiently.

What sets us apart?

1. Fast Turnaround Time

We cordially track the deadlines and make our quality tangible, while executing finance projects well ahead of time.

2. Confidentiality

At Terkar Capital, We comply with the highest professional confidentiality standards. All client information is discussed in strict confidentiality.

3. Competitive ROI

We find you the right lenders with similar terms and the lowest rate of interest.

4. Hassle-free Processing

We create a stable ownership structure for financiers by establishing a secure transaction process.

5. High Level of Integrity

We are building our reputation through reliability, integrity, and honesty. We connect to our clients on personal grounds that include transparency and liability.

Explore from FAQs on unsecured business loans in more detail

FAQs On Bank Guarantee Facility

1. What is the interest rate for vendor financing?

There are multiple factors helps in deciding the interest rate. However in standard conditions the spread remind around 4-6 %. So the interest rate will start from repo rate + 4/6% of spread.

2. What maximum amount can I get under vendor financing?

There is no capping to the vendor financing. As long as company Financials, Work orders and Vendors justify any amount can be raised. Even Rs. 100 crore.

3. What is the time required to raise the funding?

If all the documents are timely available, the Terkar Capital team can raise the funds in as low as 10-15 working days or even lower than that.

4. Vendor Financing will be secured or unsecured?

It can go both ways. Depending on the financial ratios. If the financial ratios are good, it can be done without collateral. For extra comfort, the FI may ask for some collateral even.

5. What other instruments can I explore if vendor financing is not working?

Terkar Capital has a wide range of debt instruments and sources of funding. There is always a possibility to raise the funding through some or other way. You can always approach the Terkar Capital team.

6. Do you need to change the banker in Vendor Financing?

You do not need to change your existing banker. The vendor financing limit will be given through virtual accounts.

7. Can the service industry get vendor financing?

Generally vendor financing works well for the manufacturing and trading industry. However, in the service industry if the vendors are rated one, still there is a scope for funding under this instrument.

Client's Testimonial

What our clients think about us?

H Tamhankar

We are very thankful to Terkar Capital for your efforts in arranging facility. Their approach is very simple, professional, and fast! The team is highly responsive that executed the process in short span of time without any hassles. Great work... Thank you!

J Agwan

Terkar Capital is upright at delivering specialized funding needs. They implement what they state. Because of you, we're able to make our business reach an exponential level.

A Waghmare

Obliged for the services by Terkar Capital in helping secure funds for the business. They offer a broad range of advanced funding solutions and deliver financial solutions that are right for customers. Grateful for the services rendered by your firm.

C Sonawane

Thank you Terkar Capital for processing my business loan in just a few working days. Very professional & skilled team. They understood my requirements to a level that were beyond my expectations from any lending company. I strongly recommend Terkar Capital.

Vendor Financing

Features of Vendor Financing

What is Vendor Financing?

How Vendor Financing Works?

1. Financial Documents Review

2. Vendor Analysis

3. Payment towards vendors

Vendor Financing Process Flow

1. Checking the Demand - Supply and Working Capital Finance Gap

2. Documents And Instrument Work Out

3. Choosing the right Financial Institutions

4. Sanctioning and Setting up Limit

5. Rotation of Payment Cycle

Below is the Pictorial Standard Presentation of the Process

Documents Required for Vendor Financing

Identity Documents

Address Proofs

Financial Documents

Vendor Financing at Terkar Capital

What sets us apart?

1. Fast Turnaround Time

2. Confidentiality

3. Competitive ROI

4. Hassle-free Processing

5. High Level of Integrity

FAQs On Bank Guarantee Facility

Client's Testimonial

What our clients think about us?

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