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Factoring Funding Execution Process

Factoring Funding Solution

Ajit Jain owns an IT Industry named ‘Info-Solution Pvt Ltd’ situated in Pune. His Previous year’s Net Profit is Rs 9.2 Cr. He is running this business Since 2011. His business is leading into IT Services and is earning a huge profit. Since he always faces a working capital crunch, he constantly needs funds for running his company efficiently. He has recently provided software services of Rs.20 lakhs to a renowned Company and has accepted the credit period of 60 days. Meanwhile, he has received another order for which he lacks funding. The new order is amounting to Rs.12 lakhs which is again quite a huge order.

General Inputs

Company NameInfo-Solution Pvt Ltd
Commencement Year 2011
Turnover Rs 9.5 Cr
Mortgage availableNone
Industry TypeService Industry

After analyzing the company’s balance sheet, he came across that company does not have any assets which can be given as collateral. Thus, helpless for secured funding. He is confused and unable to decide the exact way for funding. While discussing with one of his friends, he came across Terkar Capital. That is one of the best funding solutions providers in India. Soon he fixed a meeting with us.

factoring process

Analysing Business:

Our team of experts examined the case and asked for companies’ financial statements. After studying the financials, we came to the conclusion to provide a Factoring Funding Solution to his company. The balance sheet had no asset for collateral but showed heavy Account Receivables i.e. more than the required amount. Mr. Ajit was unaware of the concept of finance like Factoring and was contented after getting assistance.

Factoring is the financial instrument or debtor finance in which the seller sells its accounts receivable to a third party called ‘factor’ at a discount. There are three parties involved in such transactions: the customer, the debtor, and the factoring company. In simple words, it is the selling of unpaid invoices for the requirement of instant cash.

Our Analysis:

Financial InstrumentFactoring
Total time for execution 3-4 days
Amount Disbursed immediately

80-90% of the invoice amount

(depends upon credit score)

Lock-in period (credit period)  60 days
ROI5-15%
Company ratings for services4.5/5

(Note- The ROI varies as per the market conditions)

We chose the best suitable Lender (Factoring Company) and forwarded the required documents of the customer to them. Soon, they transferred 85% of the invoice value as their debtor was creditworthy. After said credit period the debtor executed the payment and Mr. Ajit received the remaining amount less their discount/fees. Although there are discounting charges/fees for factoring, they provide around 80–90% of the cash instantly. The amount totally depends upon the creditworthiness of the debtor as he will be the responsible person for payment at maturity.

The solution to factoring funding at Terkar Capital

Once the proposal was put in by the borrower we executed it thoroughly. Our team of experts arranges a suitable funding option for you and executes the process effortlessly. Since then, Mr. Ajit has approached us for all his funding from us. If you are looking for reliable and hassle-free funding solutions, Terkar Capital can be the perfect place for you. We have expertise in the analysis of the market and offer the cheapest ROI to borrowers. Factoring Funding is among the best solutions and organizes every step of the way.

Learn more about Factoring Funding.

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