The new product û Receivables Xpress û will enable SMEs, particularly those unable to pledge collateral but with good receivables, to gain access to financing by converting their receivables to cash more quickly.
HSBC says that the new scheme will provide SMEs with a quick turnaround time, with in-principle approval within five working days. The bank says the application process will be ôhassle-freeö and will not require the submission of physical invoices. In addition, the scheme offers higher loans, which compare favourably with pricing for unsecured overdrafts or short-term loans.
ôThere is increasing awareness among SMEs of the benefits of asset-based financing, such as receivable financing, as it offers a more flexible financing structure and less onerous security documentation. More and more companies are thus adopting it as a more effective and viable alternative to traditional financing options,ö says Tan Siew Meng, HSBCÆs head of commercial banking.
The scheme also allows SMEs to outsource their sales ledger management and collection to HSBC and to mitigate buyerÆs credit default risk through a credit protection option.
ôBy doing so, SMEs can redirect their resources towards growing sales and achieving operational efficiencies, instead of having to worry about the potential buyersÆ default risk, chasing overdue debt owing from buyers and reconciling accounts receivables,ö Tan adds.