How A Major Hotel Chain is increasing their DPO through innovative vendor financing?

Challenge

• CredAble’s Client- A SME Logistics company is one of the privately held providers of Logistics services in Hyderabad
• They service very large blue-chip corporates who use their services on a daily basis
• They have a 90-day receivable cycle while they have to pay their drivers and vendors on a weekly basis
• Being an “asset-light” business, they have no collateral or tangible security to offer formal lenders to raise working capital lines to meet their cash-flow gap of close to 3Crs
• This significantly impacts their ability to grow and service large accounts

Key Goals

• Raise flexible on-demand and un-collateralized working capital to the tune of 3 Crs
• Ensure reliable and long-term supply of funding given their dependence on this capital to service their customers and vendor partners

Game plan

• They approached CredAble to fulfil this working capital gap
• CredAble immediately set up a working capital line of 3 Crs for them basis their history of receivables from their blue-chip customers
• CredAble setup their proprietary billing solution for them to enable them to efficiently manage their Accounts receivables, Accounts Payables and Invoicing
• Over a period of 3 months, CredAble enhanced their credit facilities to 7 Crs and eventually to 15 Crs today without any collateral or security to enable them to keep pace with their growth

Outcomes

• They could raise significant working capital instantly from CredAble to meet their cash flow requirements
• Over the last 12 months, they have more than doubled their revenues. Enhanced Profit margins and profitability given access to CredAble’s working capital solutions.
  Now they are no longer small suppliers to their customers, rather one of the top 3 logistics providers and this has enabled them to win new contracts