Logistics Financing – Invoice Discounting
The Logistics industry plays a major role in the Economic Development of a country and in India alone, the industry is expected to grow at a CAGR of 8.6% between 2015 and 2020. However, the industry remains fragmented and under-developed with a serious lack of proper infrastructure, tax structures, fluctuating fuel costs, etc affecting the industry while the availability of funds and working capital remains the biggest challenge. This is further exacerbated by delays in invoice payments which further affects these logistics businesses.
With the increasing delays in invoice payments coupled with a serious dearth of working capital, new alternative means of financing have gained popularity owing to their ease, access and availability when compared with traditional options offered by banks and other financial institutions.
Invoice Discounting is one such alternative finance solution for businesses that helps them avail working capital simply using unpaid invoices. In essence, it means you can sell your invoice at a discount and use that money for the smooth functioning of your business operations.
Invoice Discounting in the Logistics Industry:
Invoice discounting can help fund the Logistics & Transportation industry by freeing up cash tied up in unpaid invoices. The dependency on unpredictable and fluctuating factors makes it all the more necessary for organisations to have a strong cash flow system. Factors like increased competition, tighter margins, longer & delayed payment cycle, payment defaults only add on to the many challenges that logistics businesses face.
Benefits Of Invoice Discounting
- Release cash tied up immediately rather than wait for the completion of invoice credit periods
- Have steady cash flow to pay for important expenses like wages, fuel & operations
- Help organisations focus on the business and its day-to-day activities
- This funding facility will help businesses focus on growth rather than move more into debt by O/D or loan options
- Businesses can get more customers on board by granting credit terms and not feel the pinch of slow-paying Invoices
How Can KredX Help:
- Liquidity – Businesses get upfront access to capital rather than waiting for 30-120 days for the payments from large corporate
- Scalability – The amount of funding is dependent upon the creditworthiness of the business and therefore can grow with the business
- Flexibility – No contractual obligation to use KredX for all/any financing needs. Businesses can come and go as they like
- Transparency – No hidden or opaque fee structure. Simple fee structure which is pre-determined at the time of funding
- Control – Businesses will have complete control of managing their relationships with their client
- Less Documentation – Once the registration is completed, further documentation requirement is very minimal. No collateral or bank guarantees are required
- Accountability – Businesses have the ability to maintain control of their financing options
- Low Cost – The cost of borrowing is generally lower than other funding mechanisms
- Fast Processing – Funds may be released within 3 days of the request
- Non-Disclosure – Businesses debtor facility may be kept confidential
- Data Security – All data is secured and is not shared inappropriately
- Convenience – Easy and seamless process from onboarding to funding to payments
- Customer Service – Dedicated relationship managers for all your concerns.