Export Factoring For Automotive Industries
Today, India is the fourth largest producer of automobiles and automobile parts in the world after China with nearly 22 million vehicles manufactured in FY22. Making the country a major exporter of automobiles worldwide that exports 24% of the total vehicles produced in FY22. Read more
Total value of automobiles and automobile parts exported by India stood at approximately US$ 23 billion in FY22. Moreover, just in the period of April-July FY23, the country's exporters traded approximately US$ 8.9 billion worth of automobile and automotive parts.
What is Export Factoring
Export Factoring a post shipment financing option where an institutional or independent financier buys s an exporter’s receivables invoice against goods provided to international buyers. This type of financing enables the exporter to get immediate liquidity to explore new growth opportunities.
It is best suited for:
- Exporters who are established in the industry
- Exporters wanting to provide more flexible open account terms to their buyers
- Exporters looking to mitigate the risk of payment defaults
- Exporters who need immediate liquidity for rapid growth.
How Export Factoring Can Help Automotive Exporters
There are many long-term and short-term benefits of Export Factoring as an trade export finance for Automotive Trader -
As the financier buys the pending invoice receivables the exporter can avoid waiting the usual 60-90 day period to get liquidity. And, instead receive funds immediately in to their working capital.
Smoother Cash Flow Cycle
Since the exporter is receiving funds immediately on their invoices they can maintain a healthy cash flow and invest towards expansion.
As the financier purchases the pending invoices from the exporter they inherently take the responsibility of collecting the receivables. This leaves the exporter to focus on their business objectives.
Most Export Factoring options finance up to 80-90% of the pending receivable immediately to the exporter, drastically reducing the risk of payment defaults they might have faced.
Advantage Over Competitors
The Automobiles Export industry can be a competitive market. So, businesses that have higher working capital at their disposal to leverage new opportunities will have the upper hand over their competitors.
Why Choose KredX GTX For Your Automotive Export Business?
KredX GTX (KredX’s Global Trade Finance Exchange), is an innovative and fully digital platform that enables Automobiles Exporters to find post-shipment financing at competitive rates.
Transparent Bidding System:
Discover multiple flexible trade financing options with competitive rates.
Performance Based Financing:
Find non-recourse collateral-free post shipment financing.
Large Pool of Financiers:
Get access to a selection of domestic and international financiers.