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MSME > Vendor Finance Program

Vendor Finance, Vendor Finance in India – IDBI Bank Vendor Finance Program


Realization of funds blocked at various points of the value chain is one of the primary concerns of those involved in the business of manufacturing & supplying of various goods, and services to the corporates. Funds are required by the manufacturers/suppliers at two stages of the production viz, manufacturing stage and post-manufacturing stage. IDBI Bank's "Vendor Finance" product is so designed that all the links in the value chain remain adequately funded for smooth functioning of the vendor’s business.

The details are as mentioned in the table below:

Sr. No

Field

Content

1

Eligible Segments 

All Vendors of large Corporates /Original Equipment Manufacturers (OEMs)

2

Nature of Loan Facility

  • Bullet Overdraft / Cash Credit
  • Bullet Letter of Credit, Bill Discounting /Financing against Invoices

3

Purpose

To fund the manufacturing and receivable cycle

4

Pricing

Interest Rate linked to Bank Base Rate

5

Security

For Working Capital: Hypothecation of entire current assets

For Term Loan: First/Specific Charge on Assets created out of Bank finance/entire fixed assets

Bill discounting:  Accepted Bill / invoice by the authorised officials of OEM/Corporate

Personal Guarantee of promoter/directors, as applicable   

6

Processing Fee

As per Bank's extant guidelines



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