Vendor Finance

Vendor finance offers flexible funding to help you start or expand a vendor business. It covers initial costs like setup, equipment, and permits. With strong income potential, you can manage repayments easily while running a mobile, cost-effective business model.

Vendor financing is a model where the seller offers credit to vendors and traders to assist them in fulfilling the cost of products, inventory, and property. It is a short-term loan facility to ease the financial pressure on vendors. 

The buyer repays the amount over a set period, either through debt or equity. This method builds stronger vendor-buyer relationships and keeps traditional loans available for other business needs. Businesses often use vendor financing when banks or financial institutions decline to offer credit. 

It also enables businesses to access essential goods or equipment without immediate capital outlay. This financial offering can be a good option when a business loan may not be the best choice.

Vendor finance empowers small business owners to meet short-term capital needs without disrupting daily operations. Some of its key features include:

• Credit facility offered to vendors
• Great short-term working capital
• Credit disbursed based on the specific needs of the business
• Quick capital sanction
• Minimal documentation
• Hassle-free lending process
• Dedicated guidance through the lending process

Vendor finance carries innumerable benefits, making it a preferred choice among traders. Some of the most notable benefits of getting the type of finance include:

• A considerable increase in sales as customers are likely to make more purchases
• The buyer does not have to worry about funds when purchasing inventory

• Easy processing and less documentation
• Flexible repayment options
• Vendor finance can strengthen the borrower’s negotiating power with suppliers and customers
• Equity vendor financing enables deferred payments, with vendors receiving company shares instead of interest
• Lenders sanction vendor finance easily to borrowers who have a good credit score

There are two primary types of vendor financing:

• Debt Financing: The borrower will pay interest on the borrowed sum to the vendor

• Equity Financing: The vendor provides stock or equipment in exchange for equity in the borrower’s company

Apart from the financing structure, you can opt for no-deposit vendor finance or rent-to-own vendor finance. Here is an overview of the two:

• No-deposit: Acquire equipment without an upfront payment. However, this may result in higher monthly instalments and increased interest rates.

• Rent-to-own: Use the equipment while gradually paying the purchase price. This option is suitable for businesses with limited or poor credit history.

Let us assume that Raj wants to purchase business inventory from Rakesh. The value of the inventory is ₹10 Lakhs. However, Raj has only ₹4 Lakhs to offer and must borrow the remaining funds. 

In this case, Rakesh will enter a financing arrangement with Raj and a financial institution willing to lend the remaining ₹6 Lakhs. The financial institution will lend ₹6 Lakhs and charge 10% interest on the borrowed sum. The total sum must be repaid within the next 12 months.

Raj must surrender the inventory against the borrowed credit in case of default.

Apply for vendor financing online via Bajaj Markets and access the capital you need to support your business. Here is a list of loan options offered by lenders, for you to compare and choose from:

Disclaimer: The above-mentioned details are subject to change at the lender’s discretion.

Here are the key requirements for securing vendor financing on Bajaj Markets:

• You must be at least 21 years old

• Your business must operate for at least 1 to 3 years

• You must be an Indian citizen

• Your business must be a registered partnership, LLP, or private limited company

• Your business must have a minimum turnover of ₹1 Lakh

When applying for vendor finance on Bajaj Markets, you must submit the following documents:

Follow these easy steps to apply for vendor financing on Bajaj Markets:

1. Click on the ‘Apply For Loan’ button on this page

2. Select your profession, mobile number, and pincode

3. Verify the contact number with the OTP sent to your phone

4. Accept the terms and conditions after reading them carefully

5. Click on ‘CHECK YOUR OFFER’ and wait for the next steps

Reference to all T&C necessarily refers to the terms of the Partners as regards pre-approved offers and loan processing time, amongst other conditions.