Are you struggling to get a business loan? Borrow instantly now with Razorpay’s “Cash Advance” line of credit
Updated: 08.09.2020 14:58 IS
Bengaluru (Karnataka) [India], September 8 (ANI / NewsVoir): The pandemic has not only reduced the MSME’s income, it has also disrupted their hopes for survival.
To save MSMEs and improve their cash flows, Razorpay, the leader in full-stack financial solutions, today launched a corporate security-free line of credit called Cash Advance. Cash Advance allows MSMEs to borrow working capital with a credit limit of 50,000 to 10 lakh within 10 seconds via the Razorpay dashboard, depending on the company’s credit history.
Global analytics firm CRISIL found that during these downturns, micro and small businesses were unable to cope with working capital challenges as easily as their large and medium-sized competitors. India has more than 63 million MSMEs, 40 percent of MSMEs have borrowed from formal channels such as banks and credit institutions, while 60 percent do not have easy access to working capital loans.
While the government continues to offer programs that benefit MSMEs, most of them have only partially benefited, largely because access to such services is based on the company’s collateral, size, year of birth, and credit history. In addition, companies must qualify as MSMEs under government programs, as strictly defined by the government, in order to draw on bank loans.
After speaking with MSMEs, Razorpay found that small manufacturers, e-commerce sellers, and service providers needed cash for ongoing expenses even before they received payments from customers and vendors. E-commerce sellers, for example, need short-term working capital loans in order to be able to resell themselves as needed. Even suppliers struggled to deliver critical components to manufacturers, disrupting the manufacturing process, resulting in increasing losses.
Razorpay’s cash advance brings relief by providing collateral free credit before the sale and payment, which ideally takes 5-15 days for small businesses.
Cash Advance uses the merchant’s payment history (not just credit history) to approve a loan offer within hours, or in some cases instantly. Once approved, companies can withdraw and repay extra money at any time. The payout is instant and companies receive money within a few seconds. Companies will activate the cash advance feature with an extension every 6 months or 12 months along with simple automatic repayment options.
“A number of companies are now facing for weeks, if not months, lost revenue due to insufficient funds, which is putting unexpected pressure on liquidity. Most business expenses are still processed in cash on a daily basis. Companies are in urgent need of cash, often using personal connections with other vendors or borrowing cash through informal channels. With Razorpay ‘Cash Advance’, a short-term line of credit, we want to improve the cash flows of our partner companies. The unpredictable funding process is exceptionally simple, instant, and less stressful. We understand their problems and therefore our solution is designed so that businesses don’t need to have high creditworthiness or other unrealistic requirements to get short term loans. We hope to be able to support and assist as many businesses as possible with up to 100 crores credit by the end of this year, “said Shashank Kumar, CTO and Co-Founder of Razorpay, while introducing an Instant Worki ng capital solution for businesses with urgent needs Cash requirements.
With the introduction of “Cash Advance”, the company aims to support and stimulate capital-hungry SMEs with its technology-based services, improve their cash flow over time and make well-founded decisions.
Razorpay, a full-stack financial services company, supports Indian companies with comprehensive and innovative solutions built on robust technology to cover the full length and breadth of the payment and banking journey for any business. Founded in 2014, the company offers technological payment solutions to more than 8 million companies.
Founded by IIT Roorkee alumni, Shashank Kumar and Harshil Mathur, Razorpay is the second Indian company to be part of Y Combinator, the largest tech accelerator in Silicon Valley. Marquee investors such as Tiger Global, Sequoia India, Ribbit Capital, Matrix Partners, Y Combinator and MasterCard have invested a total of USD 106.5 million through Series A, B and C financings. Around 33 angel investors have invested in Razorpay’s mission to simplify payments and banking, and redefine the way finance works in India.
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