CORPORATE FUND RAISING
Working capital is a common measure of a company’s liquidity, efficiency, and overall health.Working Capital Includes cash, inventory, accounts receivable, accounts payable, the portion of debt due within one year, and other short-term accounts. Every Corporate/Firm/Entity requires working capital finance to meet the entire range of short-term fund requirements that arise within their day-to-day operational cycle. We are into syndication of working capital limit (Both Fund Base and Non Fund Base) for Indian company both in Indian currency as well as foreign currency. We can also propose anenhancement of Working Capital Limits (Both Fund Base and Non Fund Base) with the optimum utilization of your enhanced facilities. Working capital loans can help company in inventory management, debt management, revenue collection managing internal cash flows,payments to supplierssupporting supply chains, funding production and marketing operations, providing cash supportto business expansion and carrying current assets. There are many types of working capital finance. It is normally in the form of Fund Based Finance and Non Fund Based Finance depending upon the requirement of Industry, Trade and Service Sector.
A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate. The loan carries a fixed or variable interest rate, monthly or quarterly repayment schedule, and a set maturity date. The loan requires collateral and a rigorous approval process to reduce the risk of repayment. A term loan is appropriate for an established small business with sound financial statements and a substantial down payment to minimize payment amounts and total loan cost.Term loan are usually required for a capital expenditure such as constructing a new factory, buying, machinery, purchasing of office or expansion and up gradation of existing factory. Parthiv Capital got expertise in getting loan approved in its preferred mode. we study future cash flow very thoroughly and make sure that the term of loan will be according to that only .We also have special expertise in raising ECB for Indian expenditure and Foreign Term Loan on imports of capital grounds by the route of Suppliers credit credit.
Cash credit is a short-term source of finance. Cash Credit is a facility to withdraw the amount from the business account even though the account may not have enough credit balance. A bank provides this type of funding only after the required security is given to secure the loan. Once a security for repayment has been given, the business that receives the loan can continuously draw from the bank up to a certain specified amount. The limit of the amount that can be withdrawn is sanctioned by the bank based on the business cycle of the client and the working capital gap and the drawing power of the client. This drawing power is determined, based on the stock and book debts statements submitted by the borrower at monthly intervals against the security by hypothecating of stock of commodities and/ or book debts.
Supplier’s Credit relates to credit for imports into India extended by the overseas suppliers or financial institutions outside India.
Usance Bills under Letter of Credit (LC) issued by Indian bank branches on behalf of their importers are discounted by Indian bank overseas branches or Foreign bank. Paying your suppliers at sight against Usance bills under letter of credits.
Suppliers Credit is required as suppliers would ask for sight payment where as you want credit on the transaction.
At times, in capital goods, banks would insist on using term loan instead of buyer’s credit. By this way you can avail cheap LIBOR rate funds and your supplier would also not mind as he is getting funds at sight.
Letter of Credit
A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Letters of credit are often used in international transactions to ensure that payments will bereceived. Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. The bank also acts on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank receives a confirmation that the goods have been shipped.
A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank covers it. A bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down loans, and thereby expand business activity. We assist in arranging Bank Gurantee from banks. This is usually seen when a small company is dealing with much larger entity or even a government across border.
Packing credit is basically a loan provided to exporters or sellers to finance the goods’ procurement before shipment. The bank will make the funds available to a letter of credit issued favoring the seller and a confirmed order for selling the goods or services. The advance is provided to purchase raw materials, process, manufacture, pack, market and transport the required goods and services.
Packing credit limit is a facility sanctioned to an exporter in both Pre-Shipment and Post-shipment stage. This facilitates the exporter to purchase raw materials and manufacture or produce goods according to the requirement of the buyer and get it packed for onward export. Packing Credit limit covers all the working capital needs of the exporter including raw materials, wages, packing costs and all pre-shipment costs. Packing credit limit is available generally for a period of 90 days and the exporter has to pay lower rate of interest compared to Overdraft or Cash Credit facility.
Lease Rental Discounting
Lease rental discounting works like factoring. Lease rentals are considered to be the bills that are owed by other corporations to the lessor. These amounts are considered to be payments that will be received in the future. Hence, banks deduct time value of money from these payments and pay the balance to the lessor if lease rental discounting is availed. This means that a rental which is due just next month will have to take a relatively small loss in value as compared to rentals which are far off in the future. Standard concepts related to time value of money apply to such calculations.
Non Covertable Debentures
Non-convertible debentures are used as tools to raise long-term funds by companies through a public issue. To compensate for this drawback of non-convertibility, lenders are usually given a higher rate of return compared to convertible debentures. Besides, NCDs offer various other benefits to the owner such as high liquidity through stock market listing, tax exemptions at source and safety since they can be issued by companies which have a good credit rating as specified in the norms laid down by RBI for the issue of NCDs.
A bond is a fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debt holders, or creditors, of the issuer.
Foreign Currency Term Loan
Foreign currency loan refers to the loan granted by the bank through the self-raising foreign currency fund, including five types of foreign currency includes USD, EUR, GBP, JPY and HKD. It covers a comprehensive range of usage with main use of meeting customer’s demands for foreign currency financing, including enterprises’ demands for working capital and for fixed asset investment. Compared with foreign government loans and buyer’s credit of foreign banks, Indian bank’s foreign currency loan can be more widely used and help customers purchase equipments and materials from foreign countries.
Project finance is the financing of long-term infrastructure, industrial projects and public services using a non-recourse or limited recourse of financial structure. The debt and equity used to finance the project are paid back from the cash flow generated by the project. Project financing is a loan structure that relies primarily on the project’s cash flow for repayment, with the project’s assets, rights and interests held as secondary collateral financing.