Surviving The Economic Downturn The KredX Way
The Covid-19 outbreak in early 2020 kicked off a series of global events that culminated in one of the worst economic downturns in recent history, the impact of which continues till date. The impact was felt up and down the supply chain, with working capital deficits felt across industries. As cash flows are the life blood of a business, any deficits threaten the very survival of the business. Small businesses were especially vulnerable and one such endeavour was Kadambaas Hospitality.
A Small Business In Bangalore Weathers The Covid-19 Storm
Where many businesses struggled to find appropriate financing to rework their growth trajectory, Kadambaas Hospitality, a corporate catering business in Bangalore, turned to KredX to find a solution. Getting access to working capital by converting tied-up invoices into cash to run day-to-day operations was one of the most accessible solutions to reset the supply chain. Many more businesses like Kadambaas Hospitality were also sitting on money, awaiting to liquidate their receivables. But with the help of KredX, they realised they could unlock the cash tied up within their supply chain.
Kadambaas Hospitality was founded in 2015 in Whitefield, where they started to make 10,000 packets a day to serve IT, ITES, and E-commerce companies. Soon after five years, they were able to build an empire, making 5X their company’s growth. Their association with KredX began just as the pandemic hit, which helped them resolve the financial crisis they faced during COVID-19, as they had already exhausted the OD facility provided by their bank. With the help of KredX’s invoice discounting services, Kadambaas Hospitality secured working capital through the sale of their unpaid invoices and secured their business operations with instant working capital.
How KredX Helped To Build An Empire
Shanmughananth Ramchandra, Managing Director of Kadambaas Hospitality, pointed out that food catering operates on fragile margins. Hence, financial discipline and financing tools are very crucial to increase profitability. Thus, when they purchase from their vendors on credit for a month or so, KredX helps them with the financing and plays a significant role in gaining a profit margin for the business. He also added that with the credit limit of INR 35 lakh on KredX for their business, they have closed multiple deals and discounted more than a couple of crores through the platform. It was an achievement for them to have had a turnover of more than eight crores when other businesses struggled to sustain themselves in the market during the pandemic. Kadambaas Hospitality now has a turnover of INR 14 crore and expects to cross the INR 20 crore mark in a couple of months.
Transparency, The Game-Changing Feature
When we asked Mr Ramchandran about what worked best for his business with KredX by their side, he stressed the ease of using the platform and the freedom to avail financing when and where required. He also expressed that transparency within the platform, starting from discounting the invoices to the visibility of the interest rates, every feature made him realise how trustworthy KredX as a brand is. Nevertheless, the availability of liquidity within a day’s time has been quintessential.
Bottom Line
KredX, unlike other financing alternatives, identified the quick wins to balancing the working capital, delivering tangible cash flow advantages and releasing the pressure on small businesses. In hindsight, KredX helped multiple MSMEs with a working capital strategy that turned their tied-up valuable cash into assets within 24 hours. Additionally, it allowed customers and their suppliers to benefit from flexible repayment periods, making smaller receivables or shorter payables.
