Supply Chain Finance in India
In India, the development of business has seen a speedy growth in recent times due to the integration of various socio-economical & financial factors.
A business, no matter whether it is small or large, is always in need of working capital which is the financing requirement to fund everyday expenses other than fixed assets. Businesses take Small Medium Enterprises or MSME loans from several banks and financial institutions to fund the need for working capital.
Supply chain finance is short-term finance for working capital that can be used by suppliers or dealers having a positive relationship with enterprise to enhance the need of working capital.
Benefits of Supply Chain Finance
Supplier
Manufacturer
Dealer
Increase cash flow
Reduce investment in working capital
Provide working capital for the purchase of inventory
Offer post-shipment financing
Minimize the cost of goods sold
Low cost of funding rather than other products of working capital
Decrease the cost of capital
Reduce total cost of borrowing
Automatically decreases the administration cost
Advance payment reduces financial dependence on buyers
Automation reduces
Improve financial discipline
Documents required for Supply Chain Finance in India
- Identity and address proof of owner as well as business.
- Latest bank statements
- Details of sales ledger for vendor
- Invoice for the previous three months
- Recent GST or VAT documents
