TIME VALUE FOR MONEY:
An NBFC-Factor undertakes a transaction based on the quality of the receivables, unlike banks which take credit decisions based on a customer's financial history/strength, cash flow and collateral.
Empirically, once a relationship has been established, Factoring companies are able to turn around a funding proposal within days as compared with weeks taken by banks in general.
CAN SELL ON OPEN ACCOUNT TERMS:
Factoring facilitates sales on open account terms and makes funds available to the seller against sales in domestic and international markets. The buyer is saved from the cumbersome process of opening LCs and seller is saved from the cost of LCs (which buyer generally passes on to him under LC transaction).
IMPROVED CASH FLOW:
SBIGFL's services enable its clients (the Seller) to receive the funds almost immediately after shipment instead of waiting until the payment dates agreed with the buyer.
EXPANSION OF CLIENTELE:
Increased liquidity enables the Seller to increase his client base.
COMPETITIVE AND FLEXIBLE INTEREST RATES:
Generally, Medium Enterprises with weak financial ratings are not able to bargain for better interest rates from Banks / FIs. If a Small & Medium Enterprise (SME) is supplying to Big corporates / Mid Corporates, SBIGFL considers the ratings of these corporates and can offer finer interest rates to these SMEs.
A unique feature of SBIGFL's services is its ability to quote differential pricing for different debtors based on the risk profiles of each debtor.
MINIMUM SECURITY /COLLATERAL:
SBIGFL's facility is flexible and directly linked to client's sales and the quality of the buyer.
COLLECTION AND FOLLOW UP:
SBIGFL provides follow up services for collection of receivables due to its clients. Clients benefit by quicker collection of factored invoices.
MIS:
SBIGFL provides its clients a variety of MIS reports on their account position as and when required. Clients also have online access to their accounts via a web based solution provided by SBIGFL.
COMPLEMENTARY TO WORKING CAPITAL LIMITS:
SBIGFL's facilities do not affect the existing banking relationship of the client. SBIGFL complements and does not compete with the working capital bankers. Proceeds of all factored invoices are credited to client's cash credit account with principal working capital bank.
CHOICE OF CURRENCY:
SBIGFL gives the option to its export factoring clients to avail funding either in EURO, USD, GBP or INR.
BETTER NEGOTIATING POWER:
Factoring with its flexible payment option places the seller on a strong footing to negotiate increased business volumes.
