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Discover how fintech solves working capital loan challenges in logistics

Image of a person counting few currency notes along with a notepad and laptop to denote working capital loans

What is working capital and how does it affect business growth?

Financial stability is a core component in every business to meet everyday expenses and long-term investments. However, managing working capital is one of the biggest challenges that businesses struggle with in recent years owing to unprecedented seasons that wrecked the economy of almost every country around the world. A firm that does not receive working capital loan will hinder progress to a greater extent and can even lead to massive loss.

How optimising working capital can help grow your business?

Businesses that succeed in optimising working capital result in quicker payment of debts and provide more scope for investments. Most large businesses operating in the logistics sector efficiently manage to receive logistics loans or working capital finance from banks or third-party business capital lenders. But most medium-scale and small logistics firms hardly receive any logistics capital loans owing to the risks associated with credit worthiness.

How fintech solves working capital loan challenges in logistics?

The major challenge with regard to managing working capital in logistics is to optimise invoice payments between parties because traditional invoice payments involve paperwork and other time-consuming processes or insufficient methods of receiving payments. Fintech provides scope for optimising working capital with flexible payment terms, credit management and automation of processes that ensure faster transactions at every stage of the supply, shipping, and delivery demands. Fintech solves the challenges in managing working capital through invoice, asset and supplier-based financing.

  • Invoice-Based Financing: Invoice-based financing is the process of borrowing money from banks or third-party business capital lenders for unpaid invoices to reduce waiting time for payments. Fintech companies like Axlerate offer best capital loans for logistics through invoice financing to logistics firms in order to help them meet their liquidity requirements.
  • Asset-Based Financing: Asset-Based working capital finance is a key contributor to meeting working capital demands in terms of warehouse and vehicle needs that guarantee smooth transportation of goods from suppliers to consumers. Fintech companies use data insights to develop inventory management systems that are easy to use and offer hassle-free working capital loans.
  • Supplier-Based Financing: Credit approval for logistics firms, especially for firms that are relatively new to the industry, is a time-consuming and risk-oriented procedure that needs accurate data and background checks. Fintech companies facilitate big data analysis and automation to issue credit in less time while also ensuring credit worthiness. Thus, supplier-based financing in the form of credit ensures efficient working capital management.

Let’s Wrap Up!

Financial Stability is a key indicator of a successful business. Optimising working capital is of prime importance to logistics firms to ensure the seamless flow of operations within and outside the firm. The integration of fintech in logistics provides scope for faster transactions, flexible payment terms, issuance of credit or logistics loans for operations including supply, shipping and delivery through invoice, asset and supplier-based financing. Ready to integrate fintech with your logistics operations?

Axlerate is a unified platform for Logistics management, payments and services. Our solutions help to simplify tolls, fuel purchases, fleet expenses, loans, insurance, escrow, payments, truck booking, fleet management and the buying and selling of logistics products and services.

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