Factoring for SMEs
HSBC launches factoring for SMEs in India
The Hongkong and Shanghai Bank Corporation Limited (HSBC) today (30.08.06) launched its factoring services for small and medium-sized enterprises (SMEs) in the country.
The services have been made available in Mumbai, New Delhi, Kolkata, Pune, Bangalore and Chennai. Factoring is an ideal source of working capital finance for SMEs that account for 40 per cent of the country's manufacturing output and 49 per cent of its exports.
Briefing the media here today, senior vice president and head, factoring, India, Bhriguraj Singh said, ''In factoring we will provide three services products which include financing, credit protection and collection.'' While the factor advances a certain percentage of each invoice to the seller or client in the first category, it provides protection to the clients from the risk of bad debts due to debtor insolvency/default. Similarly, it takes the responsibility of managing the client's receivable ledger, generating debtor statements, monitoring dues and collecting debts from the individual debtors.
Talking about the features of factoring services of his bank, Mr Singh said that HSBC was the only provider of export factoring that can provide cover through three distinct channels which include various factoring offices of the bank, it being the member of the Factors chain International and above all, credit insurance as the bank has got entirely a separate wing for the factoring services.
The wing comprises nearly 60 staff of the bank that have been especially trained for the job. Though there are quite a few organisations into the field like SBI Factors and CanBank Factors, but, it is not sufficient to tap the huge potential the factoring had in the country.
Without disclosing the advances his bank had with its SME customers, the country head-commercial banking of the bank, Subir Mehra said, ''We've got nearly 40,000 SMEs with us in the country.
But we are targeting those SMEs that are having their annual turnovers up to Rs 50 crore.'' Later talking to UNI he said that more than 90 per cent of our clients in UK are from the SME sector and it encouraged us to create awareness about the benefits of the factoring services of our bank in India too.
Timely finance sans collateral security and elimination of hidden costs of collections are what that have made the factoring services an essential tool for the SMEs of the country aspiring to fuel theiuur business growth.
For more detailswww.hsbc.co.in
REGENCY factors
Regency factors was established in 1990 by Maurice and Hilary Craft. They set out to provide factoring facilities for small, fast-expanding businesses whose needs demand a level of flexibility and customer service beyond that offered by mainstream factoring companies and trade finance facilities for fast-expanding mid-sized companies whose growth is hampered by peak period funding shortages.
In line with the ethos of the company Regency factors have constructed their facilities so that the better their service, the more profit they make. This is in sharp contrast with their mainstream rivals who largely depend upon their rigid contract to retain clients.
In November 2001 Regency factors was admitted to the Factors' and Discounters' Association (F.D.A.). They are the trade body of the factoring and trade finance industries and they set down strict rules and regulations that members are expected to abide by. In case a member and their client falls into dispute the F.D.A. operates an arbitration scheme.
In December 2002 Regency factors were awarded the Investors in People marque which is the recognition that a certain level of training and staff development standard has been achieved.
Regency factors have continued to expand over the years by growing with their clients as a financial backbone supporting the client's progress and expansion as well as welcoming new clients aboard.
For more detailswww.regencyfactors.co.uk
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