Largest Supplier on Leading E-Commerce Platform in India

Deployed a ‘fixed rate’ early payment program for suppliers designed to auto-accelerate all invoices for immediate payment once approved by client; Offered in partnership with a leading MNC bank.

Case Overview:

• CredAble’s Early Payment Program for Suppliers digitally enables post-invoice vendor financing. Our focus is to make it easy for large enterprises to facilitate on-demand working capital for their suppliers using our trade finance expertise, user friendly technology platform and partnerships with 3rd party capital.
• CredAble’s post-invoice early payment platform provides all suppliers to get early payments against their invoices in exchange for a discount. It saves the enterprise client from the hassle of 1-on-1 negotiations with individual suppliers with its rate discovery tool. We are looking to unlock capital and create opportunities within an enterprise’s trade payables.

About the Client:

• A leading e-commerce investee company and largest seller on a leading e-commerce company with a diverse and unorganized vendor base. Focused on apparel, accessories, electronics, and food among other products
• Vendors experience credit periods of 45-60 days from invoice date with effective credit period of 40-55 days available for acceleration. 5 days are noted for operational delays at the bank or Client end
• Client interested in enabling early payment leveraging third party capital

CredAble Solution:

• CredAble partnered with an MNC bank to enable third party financing on the early payment program
• Funding was off-balance sheet for vendors and did not change the trade payable nature of an invoice for the Client
• Given the sheer volume of monthly invoices encountered by vendors, individual invoice level bidding was tedious and time-consuming. Hence, CredAble provided a hassle-free solution offering ‘fixed rate and full turnover’ program to vendors
• CredAble’s team negotiated fixed annual rates with suppliers for automatic acceleration for immediate payment for all their invoices presented within a 12-month period
• CredAble’s risk model in consultations with client sets a minimum target discount rate threshold for each supplier to ensure maximum rate optimization
• All approved invoices are automatically accelerated for immediate payment. Based on mutually negotiated rates and tenor
• Transaction level documentation digitally generated and distributed through platform

Impact Created:

• Entire available credit period is auto accelerated. Vendors paid within 72 hours of invoice listing onto the platform
• Vendors discount rate ranges for suppliers in this industry range from 13%-17%
• Provided the client with a haircut financing structure to accommodate high frequency of customer returns
• Influenced the Client to streamline its invoice approval process thereby enabling purchase order financing for its vendors  

CredAble understands supplier nuances within the E-commerce sector. We can engage with vendors at scale thereby creating process efficiencies for the Enterprise client and vendors.

For more information on the program, or to learn more about CredAble, please visit https://www.credable.biz/credable-home/credable-solutions/early-working-capital/