Use Case
Tailored Program
for Air Coolers
Enable seamless access to working capital for all partners in the system, empowering their financial capabilities.
Supercharge business growth with channel financing.
It accelerates the cash flow for businesses and offers credit flexibility to distributors, partners, and retailers.
Background
The company, globally recognized and a vital part of India's top business conglomerate, boasts a diverse portfolio encompassing consumer products, lighting, and power transmission. As a leader in the consumer electronics industry, the anchor company has consistently delivered excellence. However, it confronted specific challenges in its Air Cooler Business segment, primarily stemming from the industry's cyclical nature, where sales predominantly occur from March to August.
In this context, the existing channel finance products featuring credit periods of 30–90 days were ill-suited for the distributors. This mismatch hampered their capacity to finance air cooler purchases, leading to constrained sales opportunities and creating a pressing need for a more tailored financial solution.
In this context, the existing channel finance products featuring credit periods of 30–90 days were ill-suited for the distributors. This mismatch hampered their capacity to finance air cooler purchases, leading to constrained sales opportunities and creating a pressing need for a more tailored financial solution.
Challenge
Challenges surfaced due to the incompatibility of existing finance products, designed with standard credit periods, which did not align with air cooler sales primarily occurring from March to August.
Additionally, the company's initiatives offering discounts to distributors before the peak season were hindered, as distributors couldn't make purchases without accessing credit, impeding the potential for sales growth.
Additionally, the company's initiatives offering discounts to distributors before the peak season were hindered, as distributors couldn't make purchases without accessing credit, impeding the potential for sales growth.
Approach
Cashinvoice’s customized solution, was meticulously crafted to address the distinct challenges faced by both the anchor company and air cooler distributors. To mitigate the risk of delayed payments, interest was collected upfront from the disbursement date until April 1st. Distributors benefited from a moratorium period until April, relieving them from repaying the principal amount during the non-sales period.
The repayment structure featured six equal monthly instalments, encompassing the principal amount and the interest for the period from April to August. This instalment plan significantly enhanced distributors' cash flow management capabilities, creating a conducive environment for seamless business operations and sustainable growth.
The repayment structure featured six equal monthly instalments, encompassing the principal amount and the interest for the period from April to August. This instalment plan significantly enhanced distributors' cash flow management capabilities, creating a conducive environment for seamless business operations and sustainable growth.
Result
- Financing options boosted sales potential, potentially increasing market share by 20%.
- Structured financing facilitated effective sales planning aligned with the peak season.
- Credit options enabled distributors to buy stock before the peak season, securing discounts.
- Quick access to unsecured credit eliminated delays in air cooler purchases.
- Equal monthly instalments helped distributors manage cash flows effectively.
