Assisted the client enable a reverse factoring program anchored around client offering early payments to suppliers in partnership with banking partner.
CredAble's digitally enabled Early Payment Program for Suppliers post-invoice vendor financing program. Our focus is to make it easy for large enterprises to facilitate on-demand working capital for their suppliers, using our trade finance expertise, user friendly technology platform and partnerships with 3rd party capital. CredAble's post-invoice early payment platform provides all suppliers to get early payments against their invoices in exchange for a discount and saves the enterprise client from the hassle 1-on-1 negotiations with individual suppliers with its rate discovery tool. We are looking to unlock capital and create opportunities within an enterprise's trade payable. This is a live case study with one of CredAble's clients in the Media & Entertainment industry.
About the Client:
- Subsidiary of global media conglomerate with FY18 revenues of ~INR 64bn
- Diverse and fragmented supplier base operating in content development and ancillary services sectors which are largely unorganized
- Contractual credit periods of 60-75 days; Client requires ~50% of this period for invoice processing
- Client interested in enabling early payments to suppliers in partnership with banking partners
- CredAble partnered with a leading Indian private bank to enable early payments
- CredAble’s engagement specialists’ onboard suppliers and provide guidance to the client on optimal target discount rates for each supplier based on a proprietary risk model
- Funding was off-balance sheet for vendors and did not change the trade payable nature of an invoice for the Client
- Fixed rates for short-tail suppliers with specific time periods to drive recurring business and provide rate certainty to suppliers
- Collateral-free financing provided to vendors in an industry where most of the long-tail vendor base is deemed un-bankable
- Transaction level documentation is digitally generated and distributed through platform
- Average invoice acceleration of 30-35 days
- Vendors discount rates range from 13% – 15%
- Average arbitrage savings of ~6% p.a.
- Faster invoice approval process thereby enabling vendors to accelerate payment to dates closer to their invoice dates
CredAble understands supplier nuances within the media sector and can engage with vendors at scale thereby creating program level efficiencies for the Enterprise client and vendors.
For more information on the program, or to learn more about CredAble, please visit https://www.credable.in/credable-home/credable-solutions/early-working-capital/