Know Why Supply Chain Finance is a New Cash Source for Companies

By | August 27, 2019
Supply Chain Finance

IDC estimates that 1/3rd of all manufacturing supply chains will become analytics-driven cognitive capabilities, which will improve service performance by 5% and cost efficiency by 10% by 2020.

Multiple new methodologies and technologies are being introduced in an attempt to optimize supply chain finance (SCF). These include artificial intelligence, analytics, and analysis, blockchain roles, Internet of Things (IoT), etc.

75% of large-scale manufacturers will integrate IoT and analytics to reduce the time taken to mitigate risks by the end of 2019 as per IDC.

Following this upgrade, supply chains are becoming an increasingly globalized and fetching interest of numerous companies. Considering the increased revenue generation following an organized and efficient supply chain, organizations now avail funding to finance it and implement various innovative and updated technologies.

This funding or supply chain finance takes into consideration 2 factors –

  • Working capital
  • Liquidity

Thus, this financing option is a complementary product for many monetary structures that are aimed to liberalize trade economy. Subsequently, multiple NBFCs now offer their supply chain financing options that help borrowing companies meet their customized financial requirements. The growing importance of this channel financing is due to its ease of availability and convenient accessibility to a lump sum amount.

Benefits of supply chain financing for companies

While knowing what is supply chain is imperative to the optimal running of a business as it:

  1. Introduces faster payment modes for trade transactions made within a pre-set limit. It adds on to a business’s repute in the market and hence, increases its sales.
  2. Plays a crucial role in enhancing the supplier-customer relationship by bridging the gaps between the two caused due to disputes over the payment issues.
  3. Reduces the cost of administration considering that channel financing handles risk management. It creates scope for investing the surplus amount on other business aspects that could fetch better revenues.

Taking into consideration these benefits, reputed lenders like Bajaj Finserv offer their Business Loans that comes with a hassle-free application process. Such advances also provide several lucrative borrower-friendly features that make them the preferred financing option for companies. It includes –

  • Convenient access to a high-value credit amount

Every businessman should know about supply chain management, and the investment it requires to efficient functioning. Considering that availing this advance can help them have access to a substantial fund of up to Rs. 30 Lakh, individuals need not strain their budgets to meet this expense.

  • Zero collateral required

There are several benefits of collateral-free business loans; businesses don’t have to mortgage any asset and get to exercise full control over the same. Additionally, approaching reputed lenders also ensures that individuals enjoy the benefit of an attractive rate of interest and extended loan repayment tenor.

  • Easy-to-meet eligibility criteria

Potential borrowers applying for supply chain finance options need to fulfill the following eligibility criteria –

  • He/she needs to be in the age bracket of 25 to 55 years of age
  • The business in question must be at least 3 years old.
  • ●       The trade must file IT returns for a minimum of at least 1 year.
  • Flexi Loan facilities

Borrowers can opt to pay interest on the withdrawn loan amount and repay in interest-only EMIs at a tenor convenient to them. It is especially beneficial considering the flexibility of repayment for seed entrepreneurs as it ensures that there is unnecessary stress on the budget. Thus, Flexi Loan is an ideal way to meet your working capital needs considering its convenient repayment structure.

  • Pre-approved offers

Bajaj Finserv also brings you pre-approved offers for existing borrowers on several financial products that include both unsecured advances like business loans, personal loans, etc. and secured credits like home loans. These offers ease the application process to avail financial aid. You can take a look at your pre-approved offer by providing a couple of details like your name and contact number.

  • Nominal paperwork

Prospective borrowers of this financial aid need to furnish the following documents to avail a credit –

  • Certificate of business existence with a business proof
  • Bank account statement of the previous month
  • KYC documents
  • Passport size photographs
  • Other relevant financial documents

Considering such easy eligibility criteria and nominal list of documents, availing the requested loan amount under supply chain finance involves a hassle-free loan processing, followed by quick disbursal of the sanctioned sum.