Company: ABC Security Services Pvt. Ltd.
Line of Business: Providing Manpower services
Customer Turnover: 90 Cr
Customer’s Requirement: The customer had won a bid in a tender worth 40 Cr. This was over and above his regular business. As per terms of the tender, the customer needed to provide the manpower to a certain location within 20 days of the tender being awarded. This required an infusion of 5-6 Cr on an immediate basis for arranging the manpower.
Problem Area: The customer had no free collateral available. All his properties were mortgaged to his existing bankers against his existing working capital limits. Secondly, even if a property was mortgaged, the legal and technical checks of the property would take time, which would result in him missing his deadline as per the tender. Thirdly, he was not too keen on taking a long term property loan as this requirement was only for the specific tender, and he would not require the funds for more than 2 to 2 and a half years.
Solution: We provided the customer with a short term unsecured bridge loan to the extent of 6.50 Cr. As this funding was unsecured, there was no legal and technical checks to be done and no mortgage to be provided, thus allowing us to provide a disbursement to the customer the amount within 2 weeks. Also, this was a short term loan provided for a tenure of 24 months, fitting the tenure of the tender. Even though this type of funding is at a much higher rate than property backed funding, it was the ideal solution for the customer since his margin on the tender was way more than the cost of finance, and hence losing the tender for lack of funds would have been a big loss to the company.
