Credit Caf'e: Bank funding and Credit Advisory Services

CIO Vendor It was 2014 when Credit Café came into being, a time when the economy was at its nadir with GDP reacting to 500 bps fall mirroring the 2008 crash. Lending portfolios were weak which caused banks to become more averse to lending, even more so in the SME segment. Resultantly, credit underwriting became a lot more stringent, borrowing costs got higher and credit structures became the most rigid in modern times. This crisis of funds for SMEs called for a gap to be filled in by experts who could take up the role of advisor for both, the client and the lending institution.

As a banker working in the commercial banking division of an MNC bank, Srinivas Bala was associated with the TS Mahalingam group and its Chairman, Mr. K. Mahalingam (fondly called Mali). Mali, a futurist by nature, found a fit to build a modern, professional and focused capital advisory with Srini, debt being the core to start off.

“His invaluable experience, business acumen and touch points across levels of established banks was coupled with my SME banking experience, understanding of business sourcing, credit and client relations gave us a thirst for creating a superior advisory brand. Today, we have built a 250 crore portfolio of advised assets, of growing companies in niche spaces across industries,” speaks Srinivas Bala, CEO, Credit Café.

Emerging Businesses need efficient banking solutions which include effective lending rates, customized and structured products, reduced trade and transaction costs and Forex advisory. It is very difficult for different banking departments which individually specialize in these, to focus on each individual customer. Credit Cafe works with multiple divisions within banks to commit to the customer the most optimum structure and pricing of credit facilities as core, in addition to associated trade and forex requirements. Throwing more light on this, Srinivas explains, “The awareness among SMEs about various structured facilities ranges from low to fair; mainly due to information asymmetry between banks’ varied departments and the client. This is where our expertise comes in. The ingredients are market intelligence for references, tie-ups with top banks, understanding of bank credit underwriting and domain experience from ex-bankers and reputed business tycoons. In this combination, we brew up the best possible solution that our clients can relax and sip on, delivered by the professionals at Credit Café!”

An Array of Services

Credit Structuring and Syndication for small and emerging corporate remains their core offering.
Credit Café is known to provide advisory for reaching the right lender, assistance for credit underwriting and sanction of credit facilities, credit disbursal and post-disbursal engagement on optimum usage of credit facilities. The company analyzes the current funding arrangement with banks and execute superior debt advisory which are a combination of newer structures (like Credit syndication, Multiple Banking Arrangements, Project funding, Door opener facilities, Parallel funding), newer products (Trade finance, Foreign currency term loans, export and import finance, working capital demand loans, Inter-bank credit limits, trade services like LC and BG, Supplier finance, Factoring, FCNR loans, Forward limits), optimum quantum, reduced unsecured funding), more efficient collateral covers and the best possible pricing. “Our niche lies in the in-depth analysis, where we dig deep into the nucleus of the company’s funding with a short and medium term purpose of defining and executing a balanced funding structure, as well as substantial costs saves on banking and finance costs. Typically our clients save 20-30 percent of their finance costs through our solutions,” he avers.

Credit Cafe works with multiple divisions within banks to commit to the customer the most optimum structure and pricing.

The company proposes a unique and precise financial structuring solution to cut banking and financing costs in the short term and fuel business expansion in the medium term, without having to compromise between the two. “We provide useful one-of-a-kind advisory which gives our clients financial control in addition to core funding advisory. We call it Precision Finance,” he adds. The solutions Credit Café offers are futuristic with a view of the next 3-5 years in sight. The revenue model is closely linked to tangible values brought to the client in terms of the structure and/or cost savings.

What gives Credit Café a competitive advantage over others is the culture of their competent team that resonates with clients, relationships built over the years with banks, and exeution of value added services for clients. Credit Café’s intellectual capital (giving rise to futuristic credit structures), banking tie-ups (giving rise to negotiated pricing), its professional style, ease of transaction, intrinsic value of the advisory, long term commitments adds value to its credibility.

The Road Ahead

Evolving and adapting is what team Credit Café envisages in the coming times. Elaborating on this, Srinivas concludes, “With each funding transaction handled at Credit café, we learn and unlearn. It is this liquid state of adaptability that is going to give us a solid footing in changing local and national economics. Our strength lies in what we have learned from our past experiences, mixed with in-depth understanding of current market trend. We intend to build upon these strengths to widen our scope of offerings (over and above debt advisory) and broaden our horizon to various geographies and capital structures.”