4 Credit lenders that MSMEs can rely on for resuming Business

Faced with lockdowns across most states and key businesses, India's banks are bracing for a decline in collections and increased demand for capital from borrowers. With the increase in the number of COVID-19 cases across states, there has been a sharp drop in business across a number of industries.

Due to the drop in business, there will be a need to make the lending process totally digital and will push lenders to prioritize digital lending. With digitalization, organizations that are offering services that were never thought would be required before will gradually become the need of the hour.

To overcome the loss due to pandemic, every industry will need to re-start their business and would require working capital for the same. Banks and some of the non-banking finance companies (NBFCs) might shy away from lending to small-scale businesses.

Trade Factoring companies such as Drip Capital, Prima Dollar, Blend Finance, etc are eyeing the next big game: lending for the SMEs/exporters. With rapid digitization of payments, companies that process these transactions will catch the pulse of the business. On the basis of cash flow, these companies are open to lending small amounts to restart with and then expanding the scope of operations consistently.

Below are some of the Credit lenders that will gain extreme relevance as soon as the lockdown is over-

PrimaDollar

Recently launched in India, PrimaDollar provides low-cost trade finance to importers and exporters around the world. With clients already in over 30 countries, PrimaDollar’s trade finance product is striving to become a mainstream option for mid- and large-cap companies, allowing exporters to ship promptly and importers to pay later and bridge the timing gap involved in international trade.

Drip Capital

Drip Capital offers working capital from USD 100 thousand to USD 2.5 million, depending on the exporter’s size and requirement basis the invoice raised by the exporter. The quick credibility assessment of the buyer and exporter is done via an automated analytical tool developed by the company.

The financing is unsecured and offered without any collateral. Exporters can apply to Drip by completing a 10-minute online application, requiring minimal paperwork. Drip uses electronic data and an automated risk assessment platform, thereby ensuring a quick turnaround of 48 to 72 hours.

Indifi

Indifi is a digital lending platform created to provide capital loans to small businesses that are neglected by traditional institutions such as banks due to a lack of collateral or finance data to apply for loans. Launched in 2015, this fintech startup analyses the risk capacity through their business data and provides tailored loans to businesses creating the opportunity for them to grow.

The approach undertaken by them is hassle-free with less documentation and low costs. Backed by investors such as Accel Partners, Omidyar Network and Elevar Equity, Indifi is bridging the gap in the SME financing segment with flexible repayment options for SMEs.

Blend Finance

Blend Finance is one of the leading providers of bespoke trade finance solutions to its global clients, enabling them to maximize their global business opportunities. Customized trade solutions structured by Blend’s team of trade specialists help clients optimize their trade lines all the while, resulting in increased competitiveness, optimized working capital, and reduced credit risk.

They have strategic partnerships with the leading global banks, trade funds, and large non-bank investors to provide clients with the required comprehensive solutions.