Credit Collateral


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Monitoring retail trade collateral can present several challenges for lenders. Some of the challenges are:


Physical Location of Collateral/Primary

Retail businesses may have multiple locations, which can make it challenging for lenders to track and monitor collateral/primary security.


Collateral Control

Retail businesses may have multiple creditors with claims on the same stocks, which can create disputes over the same and lead to legal challenges.


Monitoring Compliance

Retail businesses may be subject to a range of regulatory requirements, such as environmental regulations, which can impact the value of asset. Lenders may need to monitor compliance with these regulations to protect the value of the asset.


Inventory Management

Retail businesses may have complex inventory management systems that can make it difficult for lenders to monitor changes in inventory levels and track the movement of inventory. Investments need to remain in the business and should not get diverted for other purposes. Lenders therefore are keen to ensure that the vehicles financed by them are available in stock, else in the form of Receivables/Bank balance


Technological Disruption

The retail industry is undergoing significant technological disruption, which can impact the value of the security. For example, changes in consumer behavior can lead to rapid obsolescence of inventory, making it difficult for lenders to assess its value.

To address these challenges, lenders may need to invest in specialized expertise in retail trade financing, including inventory valuation, develop new technologies to monitor the security more efficiently and accurately, such as real-time inventory tracking systems and have strong partners who can carry out country wide physical verification on their behalf.

All these challenges require a partner who can manage multiple locations, gather resources in a flexible manner and at short notice, a good domain knowledge on how to execute these projects, based on the asset category, and most importantly finish the work in optimum time and competitive costs.

Matrix Business Services brings you a Pan India coverage, with deep domain expertise and over 20 years of experience to provide you with a digitally driven, cutting edge, customised service to enable you to run your business in an efficient, productive, and risk-mitigated manner.

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