Gurugram, May 21 (KNN) Trade finance firm Drip Capital apprised the SME exporters in Gurugram about the alternative working capital solutions like invoice factoring process.

They had organized a seminar on ‘Interactive sessions on Export Factoring: Easy access to unsecured finance for SME Exporters’, in association with the Engineering Export Promotion Council (EEPC).


According to Drip Capital release “SMEs account for 40% of India’s total export volumes but are some of the most underserved when it comes to working capital provisions. With Demands for collateral, long processing times, heavy paperwork burden, and other such factors contribute towards making working capital highly inaccessible for SMEs. Institutions like factoring firms and NBFCs offer alternative financing solutions.”


However, it said that many SME exporters are unaware of these offerings and need to be educated about the same. One of the easiest such alternative methods is invoice factoring.


Presented by Vikas Yadav, Senior Business Development Manager, Drip Capital, the event was graced by Pradeep Agarwal, Deputy Chairman of EEPC as well as small and medium-sized enterprise (SME) exporters from the region.


Explaining invoice factoring process, Yadav said “At its most basic, invoice factoring is a process of procuring finance by selling the invoices of your transactions to a third party known as the factor. Based on your transaction history and other parameters, the factor gives the seller (the exporter) a credit line which they can then use to finance further transactions to other buyers (importers).”


He asserted that in most cases, the seller gets 80% of their invoice value upfront from the factor (often without the need for collateral), and the remaining 20% minus the factor’s fees and interest -- after the buyer transfers the value of the invoice to the factor.


He said “Gurugram has evolved into a major industrial and financial center of Haryana in the last two decades.”


Gurugram has also developed into a robust textile center in Haryana. Readymade garments of cotton are one of the major exports of the state, with their export reaching US$887.64 million in FY18 and US$607.52 million between April 2018 and February 2019, he added.


Besides this, he stated that Haryana is now among the top five states of the country in exports, registering outbound shipments worth US$2,401 million in the first two months of the current financial year.


The state houses seven operational SEZs and an additional 23 formally approved SEZ. Being at proximity with the Capital, Gurugram is a key facilitator of the state’s exports, and the city’s exporters play an important role in this economic growth.


He said “There are many small and medium industrial units in and around Gurugram. However, many of these SMEs face severe issues with managing their working capital because of a lack of adequate financing options.


In order to solve this problem, Drip Capital provides collateral-free post-shipment finance to Indian exporters with instant approvals and minimal documentation.


Drip Capital is a US-based trade finance firm, providing collateral-free post-shipment finance to SME exporters with instant approvals and minimal documentation.


Drip Capital has financed over $300 million worth of invoices till date, and currently works with over 300 exporters across various product categories and geographies across India and Mexico, Yadav added.


He said “A lot of Drip’s growth has been fueled by increasing demand from SME- dominated sectors, such as apparel, logistics, etc. These sectors are also represented strongly in Gurugram, and Drip is keen on helping the city’s exporters grow their business as much as possible.”


As part of a partnership with EEPC, Drip Capital has undertaken a series of seminars aimed at educating exporters about the great potential offered by invoice factoring and other trade finance services. The Gurugram seminar was the latest in this series.


Published On : 21-05-2019


Source : Knn India

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