Companies hold inventory of raw materials and finished good as part of their production cycle. Adequate inventories ensure that customers can be serviced even if demand suddenly increases.
However, this inventory blocks the capital of the company. Inventory finance allows companies to raise capital against these inventories.
On the other hand, for investors, it enables them to earn lucrative returns in a short tenure.
Partner Curation and Due Diligence
Financial
Analysis of annual reports and MIS for previous 24-36 months. Identification of any red flags in financials, key contracts, existing lender documents, pending litigations, history of defaults, regulatory concerns, etc.
Asset Quality Review
Ensuring that the asset financed is 'mission critical' or 'core-to-business' and undertaking verification of assets and manufacturer/ vendor
Business Performance
Assessment of partner’s track record, founders/promoters, management team (CXOs), investors, prior or ongoing litigation. Also undertake reference checks with key investors or shareholders, industry peers & competitors, and key customers
How to Invest?
- Inventory finance offers a secure investment opportunity, as it is an asset-backed investment. This can reduce the overall risk for investors.
- Inventory financing is a non-market-linked investment option that can help investors beat market volatility woes. Additionally, it can allow for a great diversification opportunity
- These are typically short-term, with repayment periods ranging from 1 to 6 months. This makes it an attractive option for investors looking for quicker returns.
- Inventory finance often provides competitive returns of up to 12% pre-tax yield compared to other investment options, making it an appealing choice for investors.
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Frequently Asked Questions
Can I get information on other partners in the SPV?
Are investors allowed to see Lease agreement?
What are the reporting standards and disclosures?
Do you offer any guarantee on returns?
How do I exit my Investment?
