Expanding Horizons

Explore the success journey of a yarn manufacturer, guided by Sriya Enterprise’s expertise in Trade Finance and Export Factoring. Witness the transformative power of Export Factoring in mitigating payment risks and unlocking global growth opportunities. Discover how our tailored financial solution provides enhanced credit protection, flexible credit periods, and mitigation of buyer default risks, empowering businesses, especially MSMEs, to confidently expand into international markets.

Sriya Enterprise, a comprehensive advisory firm specializing in Trade Finance Advisory, FEMA, Banking Regulation, and Export Factoring, recently facilitated a success story in the realm of export finance. This case study sheds light on how Sriya Enterprise played a pivotal role in assisting a yarn manufacturer in navigating the challenges of expanding into the overseas market by implementing an export factoring solution.

The client, a well-established yarn manufacturer, held a significant share in the domestic market. However, despite recognizing the potential in the export market, they were hesitant to explore it due to concerns about payment security. The company had adopted a cautious approach, conducting business only with clients willing to transact under a Letter of Credit (LC), specifically a Sight Letter of Credit.

The stringent payment terms, coupled with the hassle of dealing with document discrepancies even under LC, resulted in the company losing out on potential overseas business opportunities. Competitors in the market were offering open credit terms, which was becoming a norm and a competitive advantage.

Sriya Enterprise stepped in to understand the client’s apprehensions and challenges. Recognizing the need for a secure expansion strategy, Sriya Enterprise recommended Export Factoring. This financial solution involved conducting credit checks on buyers as soon as orders were received. Upon receiving a compliant credit check and credit limit availability from the factoring company’s credit insurer, the client could confirm the order and proceed with the shipment.

Greater Credit Protection

Export Factoring provided the yarn manufacturer with enhanced credit protection, mitigating the risk of non-payment. This security allowed the client to explore new markets and attract customers without compromising on payment security.

Flexible Credit Periods

The solution also offered the flexibility of extended credit periods, enabling the client to attract new customers and secure larger orders from existing ones. This flexibility was a crucial factor in gaining a competitive edge in the market.

Mitigation of Buyer Default Risk

Export Factoring effectively protected the manufacturer against the risk of buyer default, a common concern when venturing into international markets. This assurance empowered the client, particularly MSMEs, to expand their territories with confidence.

By addressing the client’s concerns about overseas expansion and providing a robust financial solution, Sriya Enterprise played a key role in unlocking growth opportunities. As Export factoring continues to be recognized globally as a vital tool for small and medium-sized businesses, this case study serves as a testament to its efficacy in fostering financial stability and facilitating international trade. For businesses seeking to explore similar avenues, Sriya Enterprise stands ready to provide expertise and support in navigating the world of Trade finance.