Best Financing Solution for all EXIM Needs

InstaMoney

A complete financial answer to all of your working capital problems is TDB InstaMoney. It's a specially designed enabler that makes sure you never lose out on an export opportunity because you are short on funds. Better still, it mitigates the risks associated with foreign buyer defaults and payment delays, thereby warranting tension-free exports.

Furthermore, it is not complicated in any way. TDB InstaMoney is a straightforward yet comprehensive suite of services meant to assist you in reaching new heights in international trade. InstaMoney handles every facet of export financing, from vetting buyers for creditworthiness to managing and collecting accounts receivable, from assuming credit risk to providing 100% write-off protection.

Benefits of InstaMoney Offers

Enhances liquidity: With InstaMoney, you can release money that's held in reserve for unpaid bills. Up to 80 – 90% of the invoice value may be paid upfront, which will strengthen the working capital position of your company. Enhanced liquidity also shortens the operating cycle of the company, which boosts output, revenue, and profit
No collateral needed: You shouldn't worry about getting collateral arranged. Since funding is based on the invoice value and the standing of the foreign buyer, collateral is not required to obtain financing.
Low interest rates: The cost of financing obtained through InstaMoney is generally less than the cost of funds associated with traditional financing options because the discount/interest rate is correlated with the London Interbank Offered Rate, or LIBOR. Even if you're not having trouble with cash flow, InstaMoney can be an affordable way to cut expenses.
Flexible Open Account Terms: Buyers are not interested in a deal that places the financial burden on them [as has been the case with traditional financing options like Letter of Credit (LC)] in the fast-paced world of international trade today. Exporters can provide buyers with more favorable D/P (Documents Against Payment), D/A (Documents Against Acceptance), and Open Account (O/A) payment terms by using InstaMoney. They may be able to attract more customers and boost their export revenue as a result.
Currency selection: Offers the ability to obtain funding in EUR, USD, GBP, or INR. The ability to select the currency makes dealings with overseas buyers easier and most likely less costly.
Credit protection against buyer defaults: Unlike the majority of traditional financing options, which lack credit protection against payment defaults, InstaMoney gives you the peace of mind you need to concentrate on growing your business.
MIS report access: InstaMoney is an off-balance sheet financing method. Therefore, it does not encumber assets or result in a liability on the balance sheet. You can therefore keep enjoying your "debt-free" business status.
Increases negotiating power: An exporter's ability to negotiate higher business volumes is enhanced by InstaMoney's open account terms.

The Process

Exporter registers with TDB InstaMoney
TDB shares details with its Factor Partner
Factor Partner evaluates and verifies details
Factor buys invoices and releases payment
Shrug off all your financial worries and start
exporting fearlessly with TDB INSTAMONEY.

Apply Now

Industry Speak

Here’s what Industry experts tell TDB Magazine about factoring.

TUSHAR BUCH

MD & CEO, SBI GLOBAL FACTORS LIMITED.

Contrary to perception, the simplicity of the process and the time and cost effectiveness that it offers are the biggest advantages of factoring. Alongside, export factoring offers additional advantages compared to exporting under an ECGC policy as the exporter benefits from the knowing about the buyer’s credit assessment too.

AMIT KAUL

SENIOR VICE PRESIDENT – IT, INTERNATIONAL FACTORING & HR, IFCI FACTORS LTD.

With factoring, exporters will get funding immediately on their post-shipment sales. If we factor the export receivables of a company in India, the import factor guarantees payment even when the buyer fails to make the payment. So, the exporters have the comfort that all their proceeds are credit covered and credit guaranteed. The next advantage is that the export bills are instantaneously converted into liquid cash.

VAIBHAVI THAKKAR

CO-FOUNDER & CEO, BLEND FINANCIAL SERVICES LTD.

In factoring, transaction history does play a significant role. Hence, the observation is largely correct as far as witnessing regular orders is concerned. However, the requirement of the order being large does not hold much water. If the factor is confident of the buyer (importer), depending on the factor's specific product structure, factoring can be availed by startups with limited vintage and small order sizes as well.

V. DHARMARAJAN

EXECUTIVE DIRECTOR, ECGC LTD.

Thanks to non-recourse export factoring, exporters can have immediate cash-flow access of up to 85% of the value of debtor invoices, which can be used as working capital without requirements of collateral. Our current factoring scheme is basically intended for the MSME sector. Once the requisite documents and fee are submitted, client assessment and buyer assessment is done.

VIKAS JHA

SR. VP & HEAD – PRODUCT MANAGEMENT (TRADE & SUPPLY CHAIN), DBS BANK LTD.

Factoring can be equally used by both large as well as MSME exporters. From an MSME perspective, this would help them in getting cash faster and making working capital management more efficient. Given that factors finance on the basis the underlying transaction, due diligence on past track record with respect to receivables is key. Further, factoring is operationally more intensive than a short-term loan.

LEE KHENG LEONG

ASIA CHAPTER DIRECTOR, FACTORS CHAIN INTERNATIONAL (FCI).

Export factoring comes primarily from SME exporters who need export factors to mitigate the risk of non-payment, finance working capital requirement, as well as need a method to collect receivables. Typically, in most of the countries, the export factors educate the exporters on the need to sell on open accounts to secure sales.

ASIT OBEROI

GROUP PRESIDENT & GLOBAL HEAD, TRANSACTION BANKING GROUP, YES BANK.

There is an increasing trend towards catering to MSMEs with banks offering factoring, which was earlier offered by NBFC factors. Factoring, as a product, meets the requirements of an exporter to avail open account financing and combines credit risk protection and collection services. Factoring is best suited to clients who offer open account payment terms to their buyers as it provides an alternate source of borrowing.

KAILASHKUMAR VARODIA

CFO, RECEIVABLES EXCHANGE OF INDIA LIMITED (RXIL).

The interest rate for export factoring range from LIBOR plus 200 basis points to 500 basis points, which is cheaper compared to rupee funding. Export factoring is post-shipment finance which will give three types of services: finance, cover and follow-up (management of receivable) by the factor. So, export factoring is more suitable for the continuous business relationship of buyer and seller on open account terms.

RAVI VALECHA

HEAD OF BUSINESS, PRODUCT & FI NETWORK, INDIA FACTORING & FINANCE SOLUTIONS.

Usually, exporters depend on banks for export finance, which comes with a recourse facility. However, when it comes to export factoring, its main advantage is that it offers a total product suite that provides multiple benefits – the main being a non-recourse facility on an unsecured product. Also, factoring offers credit protection in the buyer’s country. So, there are many advantages of factoring.