Get instant cash flow for your business by factoring in financial services. Turn unpaid invoices into working capital to keep operations running smoothly and drive growth.
In India, businesses that offer high-quality services and products always have the potential to expand. The growth of such companies can be exponential. So, expanding a business always requires good resources, including financial ones. When it comes to financial resources most businesses need support of working capital, be it secured or unsecured. The working capital support without any collateral adds real value to the business. Hence, Factoring is one such financial service that can be used to meet working capital requirements for businesses.
Simple & Straight forward Process
No Collateral Required
Improves Business Cash Flow
Flexible Terms
End-to-end Execution
There are many reasons why one should opt for factoring finance. Below are a few of them –
Learn the Factoring Funding Solution in depth here.
Factoring finance is mainly useful where the customers (buyer) require the credit period and the company (seller) cannot afford to give the credit period. Let us say there are 3 parties – the Debtor (Mr A), the Client Firm (Mr B), and the Factoring Company Limited (Mr C). When Mr A sells the goods or services to Mr B, Mr B agrees to pay Mr A after 60 days from the date of invoice acceptance.
So, once Mr B receives the invoice issued by Mr A, Mr B acknowledges the same to Mr A. Mr A conveys the same to Mr C. He (Mr C) checks the authenticity of the invoice and makes the payment of 80% to 90% of the invoice amount to Mr A. And remaining 10% to 20% is transferred to Mr A, once Mr B makes the full payment of the invoice to Mr. C.
Every business takes a particular number of days to convert its service or raw material to cash, and that is the reason every business needs a credit period, may it be a big or small business. And when the service or the raw material is sold on credit, that party becomes the debtor of the business. Hence, factoring is the service where a business sells its debtors to the factoring company. Factoring companies generally assume responsibility for debtors and disburse funds to the company. Consequently, factoring stands out as a prime instrument for unsecured working capital.
In India, there are three parties involved in the factoring financing. One company (who sells the debtors), the second party is the Factor, (who purchases the debtors), and the third party is the client, (the debtor). The whole process of factoring revolves around these three stakeholders of the process.
Understand the process of factoring funding from the case study.
Terkar Capital is a leading factoring finance company in India, renowned for our professionalism and expertise. We specialize in providing factoring financial services to businesses. Our process begins with understanding your business and assessing the feasibility of factoring as a solution. Once we confirm that factoring is a suitable option, we identify the most appropriate factor for your debtors and manage the entire factoring process seamlessly. We do not directly factor in the debtors.
1. Understanding Client's Requirement
A tailored funding solution based on a thorough evaluation of the client’s business goals and financial requirements.
3. Documentation
Ensuring meticulous preparation of all necessary documents to facilitate a seamless funding process.
5. Soft Approval From Financial Institutions
Securing preliminary approval from financial institutions based on the client's profile and funding needs.
7. Disbursement
Coordinating with financial institutions to ensure timely release of funds.
2. Analysing the Strengths and Opportunities
Leverage the client's financial and operational strengths to optimize their funding prospects.
4. Identifying the Right Financial Product
Recommending the most suitable financial product to align with the client’s specific goals and requirements.
6. Actual Submission of the Documents
Submitting all finalised and verified documents to the financial institution for formal processing.
8. Funding As Required
Providing funds customised to the client’s operational or expansion needs, ensuring business growth.
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1. Understanding Client's Requirement
A tailored funding solution based on a thorough evaluation of the client’s business goals and financial requirements.
2. Analysing the Strengths and Opportunities
Leverage the client's financial and operational strengths to optimize their funding prospects.
3. Documentation
Ensuring meticulous preparation of all necessary documents to facilitate a seamless funding process.
4. Identifying the Right Financial Product
Recommending the most suitable financial product to align with the client’s specific goals and requirements.
5. Soft Approval From Financial Institutions
Securing preliminary approval from financial institutions based on the client's profile and funding needs.
6. Actual Submission of the Documents
Submitting all finalised and verified documents to the financial institution for formal processing.
7. Disbursement
Coordinating with financial institutions to ensure timely release of funds.
8. Funding As Required
Providing funds customised to the client’s operational or expansion needs, ensuring business growth.
Check your CIBIL score for free.
No. Factoring finance does not require any fixed asset to be mortgaged. So this helps all kinds of industries: capital and Non-capital intensive sectors.
The rate of interest varies as the geo limit. For domestic factoring, the rate of interest will be around 10–12% pa. For the international client, the rate of interest can be around 4–6% pa (LIBOR+Spread).
Typically, the company places a charge on its debtors under the Cash Credit Facility. Nevertheless, with factoring, the existing core banker’s opinion can be sought, allowing the debtors to be factored. Thus, factoring can be combined with any chosen working capital facilities.
No, there is not such requirement or obligation to change the existing banker.
Yes. You will get more benefits for international clients, as you will get exposure to LIBOR+Spread (generally this will be around 3–5% pa).
Yes, It helps to get more benefits for Indian clients, as you will get exposed to LIBOR+Spread (generally this will be around 3–5% pa).
No. Under factoring, there are no changes in the payment terms. There are only a few changes like the account where to transfer the funds. So there are no disturbances to the credit terms between you and the client.
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