SHANKY FINANCIAL SERVICES

The term bill discounting refers to receiving the amount of the bill or the invoice by exchanging the same at a preferred or partner lender of the beneficiary of the invoice but not at the full amount of the invoice. The banks charge a percentage of fees for such benefit which essentially means that the bill is discounted at a particular rate. The banks or lenders earn a percentage of fees for such service provided to the beneficiary and the beneficiary receives the dues of the bill immediately without having to wait till the end of the credit period.

The invoices discounted under this practice are known as bills of exchange. Bill discounting is a form of loan that is available to the beneficiary of the invoices and has to be repaid if the bank or the lender does not realize the amount of the bill when presented to the buyer at the time of maturity or at the end of the credit period.

Invoice/Bills Presenting Methods

The bills are presented to the buyer by the bank or the lender at the time of maturity of the bill or at the end of the credit period available to the buyer. At this time such bill can be presented to the buyer in either of the following two forms or methods.

With Recourse

Under this method, the onus of checking all the documents relating to the transaction and the terms of the discount is on the seller’s bank. After thorough examination, such bills are presented to the buyer’s bank for clearance. The buyer’s bank does not go through the process of rechecking and has the right for refund of the amounts cleared in case of any issues with the documents presented.

Without Recourse

This method is in contrast to the above method where the seller bank does not perform any checks on the documents relating to the bill or the terms of the discount offered and the bill is presented for payment. The onus of checking and verifying the documents and the terms of discount is with the buyer’s bank. This practice is usually in place where both the buyer and seller banks have tie-ups in place for payments, acceptance or in cases where the buyer bank has already accepted the terms of payment and there is no need for due checks on part of the seller’s bank.

Procedure for Bill Discounting

The practice of bill discounting is very common in the business world and is part of the day to day activities or transactions in any business organizations. Therefore the process of bill discounting is simple and quick to ensure immediate release of funds to the seller without any unnecessary delays.

The steps involved in the bill discounting process are detailed below,

• The seller and the buyer enter into a contract for sale of goods or services.
• The seller raises the invoice upon the buyer for the goods sold.
• The buyer accepts the invoice raised, which entails the acceptance of payment of the dues mentioned in the invoice.
• The seller will then approach the partner bank or lender for bill discounting.
• The lender upon assuring the authenticity of the transaction and the creditworthiness of the buyer will release the funds to the seller after deducting the agreed margin, fees and discount.
• At the time of maturity of the bill, the lender or the seller’s bank will duly present the bill and collect the dues from the buyer.

As per the agreement between the seller and his/her bank or lender, the authority or responsibility to collect the dues from the buyer will lie with the seller or the banker as the case may be. In case, the dues are to be collected by the seller they have to be duly paid back to the seller bank upon receipt. This makes it essentially a type of loan which has to be repaid at the end of the credit period.

Features of Bill Discounting Model

The various features of the bill discounting model are discussed below.

• Evaluation of creditworthiness

The bankers or financial institutions involved will look into the credit worthiness of the buyer and well as the authenticity of the seller before entering into the bill discounting transaction with both the parties. This ensures that the risk of bad debt or fraud is greatly reduced.

• Preferred Banking Partner

The banking parties involved in the bill discounting transactions are usually bigger or reputed and known names in the banking industry. This ensures the viability of the transaction at the time of maturity of the invoice or the reliability of the paying party.

Also a bank having a long standing relationship with the buyer is preferred as this ensures the credit worthiness of the buyer.

• Inter Bank Dealing

The bill discounting model involves interbank dealings. The discounting terms are discussed and agreed upon by the buyer and seller’s bank without their immediate involvement.

Usance Bill

The period of validity within the date of time permitted by customs for bill date and the payment date viability is usually known as the usance period. It essentially means that the bill has to be viable at the time of maturity or payment date.

The various features of the bill discounting model are discussed below.

Evaluation of creditworthiness

The bankers or financial institutions involved will look into the credit worthiness of the buyer and well as the authenticity of the seller before entering into the bill discounting transaction with both the parties. This ensures that the risk of bad debt or fraud is greatly reduced.

Preferred Banking Partner

The banking parties involved in the bill discounting transactions are usually bigger or reputed and known names in the banking industry. This ensures the viability of the transaction at the time of maturity of the invoice or the reliability of the paying party.

Also a bank having a long standing relationship with the buyer is preferred as this ensures the credit worthiness of the buyer.

Inter Bank Dealing

The bill discounting model involves interbank dealings. The discounting terms are discussed and agreed upon by the buyer and seller’s bank without their immediate involvement.

Usance Bill

The period of validity within the date of time permitted by customs for bill date and the payment date viability is usually known as the usance period. It essentially means that the bill has to be viable at the time of maturity or payment date.

Benefits of Bill Discounting

• The main benefit of the bill discounting model is the immediate availability of funds to the seller. This keeps the wheels of the business churning without any liquidity issues.
• Bill discounting essentially takes the colour of a short term loan available to the sellers which helps them with their working capital requirements.
• The availability of lender banking options is huge for the seller to choose from which ensures reduced margins and fees for the seller. Some lenders even assume the risk of bad debts although the cost for such discounting will go higher due to increased risk.
• The process of bill discounting ensures easy, prompt and hassle free disbursal of funds to the seller.
• Interest or fees are charged by the banks only on the amount utilized or availed by the seller making it less costly as compared to traditional loan.

Our Vision

To be the world’s fastest operating system for supply chain finance.

Our mission

Making fiancé quick, reliable and transparent.

Dealer Finance solution is designed to help businesses access financing options for inventory and equipment purchases. Our partnerships with dealers and manufacturers ensure you have access to the best financing options available. Whether you’re looking to purchase new equipment or expand your inventory, we can help you secure the financing you need to grow your business.

We offer Dealer Finance to all dealers having a proven track with a well performing Anchor corporate and registered as Proprietorship, Partnership, Private Limited, Limited Liability Partnership and Public Limited Companies. You have an excellent track record of several years with the Anchor Corporate. Having realized an increasing demand pattern for the goods, you would like to buy a larger quantity of goods. You will be able to sell the stock to end customers and realize receivables after a certain period. However, the Corporate would like to get its money on Day 1. We help you pay the Anchor Corporate on Day 1 basis your excellent track record and vintage with the Anchor. We have built a seamless process with inter-connected systems across the Anchor Corporate and Lender. You will pay us at the end of the agreed credit period.

Features

• Unsecured Line of Credit Facility offered to Vendors having good track record with well performing Corporates.
• Loan agreement signed between the Vendor and Financier.
• Enables qualifying Vendors to discount confirmed invoices.
• Flexible repayment terms.

Benefits of Vendor Finance

• Access to new and profitable lending opportunities with little or no investment
• Funding of a confirmed end-purpose.
• Digital and standardized underwriting process.
• Highly automated and hence scalable model.

Sales Invoice Finance solution allows businesses to access immediate funding through financers who provides credit for confirmed invoices. This allows you to improve your cash flow without needing traditional bank loans. Our flexible financing options are tailored to meet the unique needs of your business, so you can focus on growing your business instead of worrying about cash flow. Invoice finance is the practice of using company’s unpaid invoices to raise working capital & fulfil its financial needs. Financial institutions including banks and NBFCs provide discounting services for businesses. We offer Invoice Financing to all vendors – MSMEs and Non MSMEs – across multiple sectors. Businesses registered as Proprietorship, Partnership, Private Limited, Limited Liability Partnership and Public Limited Companies. The financing disbursement is done by the Lender to the designated Bank account of the respective Vendor within 24 hours, as per the process agreed. Repayment is made by the Vendor to the respective Lender anytime before the end of the credit period. The credit period for each invoice ranges between 30 to 60 days, as per terms agreed with the Vendor. The interest is charged only for the actual period for which credit was used. There is usually no additional collateral required, we fund a business on the basis of the health of the business cash flows and track record of prior loan repayments. However, in some case lenders may request for collateral based on their assessment of the risks involved.You have supplied goods or services to your customers as per agreed timelines and quality standards. The customers will, however, pay you only after a certain credit period and you cannot wait to get funds to pay for the raw material, services you purchased or for the labour you mobilized. We help you raise locked-in receivables early basis genuine invoices and improve your cash cycle.

Features:

• Unsecured Line of Credit offered to Vendors having good track record .
• Enables qualifying Vendors to discount Invoices.
• Flexible repayment terms.

Benefits of Sales Invoice Finance

• Access to new and profitable lending opportunities with little or no investment.
• Digital and standardized underwriting process.
• Highly automated and hence scalable model.

Domestic factoring will allow you to assign to the bank receivables arising from the supply of goods or services to domestic customers. By assignment changes the creditor.

Factoring is recommended for manufacturing and trading companies with high turnaround that need to provide short-term supplier credit and require a large amount of working capital.

Export Factoring is one of the fastest and easiest ways to secure working capital if you want to grow your exports business without going through the hassle of securing a loan from a bank.

Our export factoring solution is designed so that exporters never have to worry about buyer payments and can immediately get paid on shipment of goods, just like any other domestic transaction. Exporters can then utilize these funds at any stage of the business lifecycle, to pay for inventory, raw materials, employees, or any other short-term needs.

As we all know that Delhi is a home to a large number of businesses, so it’s not wonder that many financial institutions are present here. There are many finance companies in Delhi which are providing the best services and high quality work to their clients. Finance India Trust is one of the leading finance companies in Delhi. We are dynamic professionals which fulfil client’s requirements completely. We have an experienced team of professional experts who are handling array of our financial services effectively. While recruiting our professionals, we ensure that they are able to handle the queries of our clients.

We are among the most popular finance companies in Delhi because of our salient features such as simple and easy procedure, less documentation, effective and prompt response, offer loan approvals speedily etc. It is our aim and priority to satisfy our client with our prompt and accurate financial services. We give prompt replies to the queries of our clients. We also try to give the effective and best solution to our client’s queries . We maintain regular communication with our clients to sort out their problems.