We got talking to an Expert in Logistics industry and got an insider’s view on the do’s & don’t. Below are his views on the industry & how it works.
Cash is the ‘King’. The time delay between payment to suppliers and employees and collection from vendors and customers is the major problem and the only solution is cash flow management which is actually very complex to manage.
According to the International Finance Corporation, the total financing gap in the SME space is Rs. 2.93 trillion. One reason could be that financial institutions mostly cater to the demand of traditional collateral-based lending, leaving out many SMEs without funds and dry. SMEs hence turn to alternative finance solution like Invoice financing, asset-backed contributions, letter of credit and others for their capital requirements. Out of these, Invoice Financing is their first choice.