How A Major Hotel Chain is increasing their DPO through innovative vendor financing?
May 30, 2018
CredAble’s Client- A SME Logistics company is one of the privately held providers of Logistics services in Hyderabad
They service very large blue-chip corporates who use their services on a daily basis
They have a 90-day receivable cycle while they have to pay their drivers and vendors on a weekly basis
Being an “asset-light” business, they have no collateral or tangible security to offer formal lenders to raise working capital lines to meet their cash-flow gap of close to 3Crs
This significantly impacts their ability to grow and service large accounts
Raise flexible on-demand and un-collateralized working capital to the tune of 3 Crs
Ensure reliable and long-term supply of funding given their dependence on this capital to service their customers and vendor partners
They approached CredAble to fulfil this working capital gap
CredAble immediately set up a working capital line of 3 Crs for them basis their history of receivables from their blue-chip customers
CredAble setup their proprietary billing solution for them to enable them to efficiently manage their Accounts receivables, Accounts Payables and Invoicing
Over a period of 3 months, CredAble enhanced their credit facilities to 7 Crs and eventually to 15 Crs today without any collateral or security to enable them to keep pace with their growth
They could raise significant working capital instantly from CredAble to meet their cash flow requirements
Over the last 12 months, they have more than doubled their revenues. Enhanced Profit margins and profitability given access to CredAble’s working capital solutions.
Now they are no longer small suppliers to their customers, rather one of the top 3 logistics providers and this has enabled them to win new contracts
CredAble will use its NBFC status to provide short-term working capital solutions to suppliers. The company takes pride in its ability to offer bespoke funding programs for corporate supply chains. CredAble’s new status as an NBFC will enable proprietary lending within corporate supply chains and enhance the Company’s value proposition to supply chain participants.