Distributor Finance

Distributor Finance is an advance offered by financial Institutions to buyers, OEM dealers or distributors, to procure inventory from manufacturers for further resale.

An instrument that allows distributors to repay financial Institutions post realization of cash from selling the inventory procured, Distributor financing offers working capital aid to fuel growth of businesses.

Process flow

  • Buyer (Distributor) can create a Purchase Order in Veefin SCF. Seller is intimated and can accept or reject the PO
  • Sellers can choose to covert the Purchase Order to an Invoice or create a new invoice in Veefin SCF
  • Buyer can then initiate a financing request in Veefin SCF which would be intimated to the financial Institutions for payment processing. Invoice details are automatically sent to the financial institution if the distributor has agreed for auto-financing
  • Seller receives the full invoice amount and an outstanding is created in the buyer’s account for the sanctioned credit period
  • On the due date, buyer makes good of the total invoice amount plus interest as per agreed terms to the financial institution and the limit is rotated to be drawn again
  • In case of a delay beyond the due date, penal interest charges are levied as per financial institution’s sanction terms to the buyer

Distinctive Features

Limit-Setting

Veefin SCF allows flexibility to sanction and set limits on Manufacturer-Distributor pair or to set limits individually at a manufacturer or distributor level.

Peak-Limits

Seasonal Limits to automatically allow for additional limit availability during peak or festive periods can be built into the system

Customizable Interest parameters

Customized Multi-tier interest rates for regular and peak limits, Interest Sharing and Interest posting intervals aligned to Financial Institution’s sanction terms

Alerts prior to Loan Disbursal

Automated Key triggers to alert in case of unusual disbursal requests such as invoice value being higher than maximum invoice value till date, or disbursal request is higher than monthly average disbursal drawdown to mitigate fraudulent drawdowns

Host-to-Host Integration

Sellers’s ERP systems can be integrated directly to pull invoices against distributers funded directly to the financial institution to automate financing process