HSBC to offer factoring services to SMEs
Chennai, Aug 31 (UNI) The Hongkong and Shanghai Banking Corporation Limited (HSBC) today announced widening of its product suite for Small and Medium Enterprises (SMEs) in India by offering factoring services to enhance their cash flows and compete on open account terms in the export market.
Factoring was a structured working capital finance solution that included finance against receivables of the SME company, collection of receivables on due date, credit protection agaisnt bad debts and credit advisory services.
Speaking about the solution, HSBC India Senior Vice-President and Head-Factoring Bhriguraj Singh told reporters here today the factoring services would be available in Mumbai, New Delhi, Kolkata, Pune, Bangalore and Chennai.
Factoring enables the SMEs to raise cash against invoices instantly, besides optimising the cash flows. HSBC would pay up to 90 per cent of the invoice value within a day of submission of the invoice and delivery documents without any collateral security, he said.
''The factoring services allow SMEs to concentrae on their core business while collections are handled by the factor. It also allows them to compete effectively in the domestic and global markets by offering buyers open account credit terms and protects them against bad debts by providing sales ledger management, even allowing them to trade with customers they have never dealt with before, at a lower cost and risk, with little fear of any payment default,'' he added.
Asserting HSBC was quite bullish and optimsitic about marketing this unique and innovative product, Mr Singh said the criteria for getting the services was the SMEs should be profit making with a turnover of above Rs five crore and should not have any defaults.
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