Credit advisory is the core operation of Credit Café arising from our existing tie-ups with banks and NBFC’s. Credit is either advised with a single lending entity or syndicated across multiple lenders. In the SME/MME space, we look at advising the following structured products to our commercial clients:
Credit Café independently analyzes the client and its requirement to then be able to negotiate the best possible structure and pricing of credit facilities with financial institutions. We provide advisory for reaching the right lender, assistance for credit underwriting and sanction of credit facilities, credit disbursal and post-disbursal engagement on optimum usage of credit facilities
Financing is done for capital expansion, either greenfield or brownfield. The end use is towards capital formation and is basis projections over the period of the project, considering the fixed asset as primary collateral. These term requirements may arise either at business inception or during growth and may be in conjunction with working capital facilities. Funding can be raised through Indian lenders in INR or through ECB route.
These are provided for raw material purchases, augmenting credit collection cycle, and for other direct /indirect expenses. Domestic working capital is typically secured against the current assets of the borrower and are in the form of 12m overdrafts/ cash credit lines and as short term demand loans for shorter tenors
Banks which are unable to offer structured finance products may issue letter of intents or standby letters of credit to other banks and block limits with the borrower. The borrower may use the letter of intent to arrange structured trade from alternate lenders which have limits with the primary bank.
We advise on foreign currency transactions of clients over the spot, forward and derivatives markets. Pre-Settlement risk is underwritten by banks over contracted and forecasted exposures to reduce your currency risk across tenors.
These are working capital facilities with targeted end use. Some examples are:
-Pre-shipment and post-shipment finance in Re and Foreign Currency
-Buyers credit in foreign currency for import of raw material or capital goods
-Channel finance basis lender’s relationship with borrower’s principal
-Factoring and bill discounting basis lender’s relationship with end buyers
-Trade services like LC, BG and credit bill negotiation/ LC discounting
Strategic advisory will be in the form of preparing business plans and presentation templates for fund raising by companies. These could be through equity - angel/VC/PE funding, private placements, Share financing, IPO subscription or through debt - FCCBs and other convertible/ non-convertible debt instruments
Funding is done against the underlying transaction documents of export collections or import payments. Exporters / Importers are allowed to get finance in Foreign currency with interest rates linked to LIBOR. These are typically clubbed with Forex limits for a strategic plan on monitoring and funding FX flows
Multiple banking and consortium funding are advised based on the growing needs of the enterprise. An assessment is made basis the bank’s risk profile on sectors and on specific business performance.