Collateral free working capital
Fund your exports growth using your foreign trade receivables.
Receivables Factoring Solutions for Suppliers in India
Find out what Receivable Factoring is, How Much Does it Cost & Solutions by Drip Capital
What is Receivables Factoring?
Account receivables factoring, or simply receivables factoring is a type of financial service that allows businesses to turn their outstanding accounts receivables into immediate cash as working capital solution. This capital can be used for business operations, to work on the next order or even for capital expenditure. A receivable, or a trade receivable is an outstanding payment that a seller or supplier is yet to receive from the buyer. A commercial trade invoice mentions the due date of payment against any particular receivable, which means the receivables are an asset. This means the seller is in possession of an asset that can either be sold or be pledged as a collateral for securing additional financing, just like any other asset (a house or a vehicle). In case of factoring, it is an outright sale of the trade receivable and is hence also referred to as receivables purchase - implying the purchase of a receivable by the factoring company.
Why do Companies Use Receivables Factoring Services?
Here are a few reasons why one should choose accounts receivable factoring as opposed to other traditional trade financing techniques. For one, it is much faster - since it is technically the sale of an asst, factoring companies can do away with lenghty compliance and documentation that is generally associated with a loan. Secondly, it is a facility that is offerred over and above the banking limits in India. For growing trading houses and exporters in India, this feature is quite beneficial as it allows them to access much needed capital to fuel business growth. Lastly, if the buyer or the importer defaults on this accounts payable, the factoring company assumes full responsibility and the supplier can focus on growing the business. These benefits make A/R factoring quite lucrative for domestic businesses and exporters alike
An Example of Accounts Receivable Factoring
Say Hindustan Construction Hardwares Private Limited sells agrees to sell Hardware worth ₹1,000,000 to Interglobal Hardware Retailers in Belguim. A commercial invoice is drawn that mentions the ₹200,000 will be paid upfront and the rest will be paid 30 days after shipment. Based on this agreement, Hindustan Construction Hardware finishes the production of the goods and ships them out. As per the invoice, Hindustan Construction Hardwares is now in possession of an asset valued at ₹800,000 - the trade receivable - that can be sold to an accounts receivable factoring company in return for a small fee.
Grow your business without worrying about cash flow
Take on new projects quicker with improved cash flow
Get a line of export credit over and above your bank’s credit facility
Reduce your dependence on bank loans
Maintain positive cash-flow
Pay your suppliers on time
How Does Receivables Factoring Work?
Submit invoice digitally on Drip's Portal
Get 80% invoice value in advance
Buyers pays 100% to Drip capital
We pay you remaining 20% less our charges
Why Choose Drip Capital?
We are a fintech company focused on solving the working capital problem for emerging market SME exporters by leveraging data and technology. We are re-building core parts of international trade finance infrastructure to level the playing field for small businesses
Credit limit up to $2.5 Million
Get post-shipment export credit line up to $2.5 million.
Competitive pricing
Cost of export financing can be as low as 0.7% per month basis credit evaluation.
Paperless, swift, transparent
Use Portal by Drip Capital for faster fulfilment and end-to-end service
Why Choose Drip Capital's Receivable Factoring Service?
Drip Capital makes receivable factoring possible by financing up to 80% of the invoice value on the day of your export shipment (After submission of the shipping BL), while the remaining 20% minus the factoring charges is paid once the buyer makes full payment to Drip Capital.
We are a fintech company focused on solving the working capital problem for emerging market SME exporters by leveraging data and technology.
Quick facts on Drip Capital
$5 Billion+
Trade Financed
6,000
Buyers & Suppliers
100+
Countries
100,000
Cross-Border Transactions
Our Partners
Growth Stories
Learn about how we’ve 10xed exporters
Tatva Enterprise LLP
Exporter of Plastic products from Maharashtra
7x Increase in Turnover USD millions
We started factoring our export invoices with Drip in FY17-18 and by 18-19 we were getting almost 25% of our invoices financed by them. With the boost in working capital and increased competitiveness in foreign markets because of better terms of sale, our turnover has shown a substantial increase.
7x Increase in Turnover USD millions
Al Sami Agro Products
Exporter of frozen foods from Andhra Pradesh
3x increase in Turnover USD millions
As an exporter you may have a great offering, but without easy access to short-term finance, you face challenges in scaling and have to let go of many opportunities. Drip Capital’s easy and efficient export finance solution has helped us ensure there is continuous cash flow in our business. Now we can convert possibilities which we otherwise would have passed on. The result has been a 220% jump in sales in FY19.
3x increase in Turnover USD millions
Satya Impex
Exporter of Red chillies from Andhra Pradesh
50% wallet share USD millions
When we started our business in 2017, traditional lending institutes could not keep up with the increasing orders from our buyers. With Drip capital fulfilling our working capital requirement, in FY 19 our business reported massive growth as compared to the previous year, over 50% of those export invoices were financed by Drip.
50% wallet share USD millions
Pari Agro Exports
Exporter of Basmati Rice from Punjab
4x increase in Turnover USD millions
Drip’s factoring service has ensured that our liquidity doesn’t remain tied up in invoices for a long time. Since the start of our collaboration, we have been able to cater to more buyers and our export turnover has increased 4x between FY17-18 and FY18-19.
4x increase in Turnover USD millions