Working capital solution for Bangladesh mills

Singapore-based invoice financing marketplace Incomlend is enabling fabric manufacturers and suppliers in Bangladesh to better manage their cash flow.

Sadat Apparels, for example, a Bangladesh garment manufacturer with customers in the USA, Europe and South America, is greatly benefiting from the Incomlend invoice financing programme.

The working capital solution allows the company to finance and increase production volumes and stock up on garments that are in season and demand.

One key customer for Sadat, a US-based clothing wholesaler, is looking to stock up on its products in preparation for the increased seasonal demand for sweaters during Autumn-Winter, providing new revenue streams for the company.

Typically, it takes Sadat up to 120 days to cash in an invoice. However, the extended credit terms can potentially impair cash flow and impede the company’s ability to boost its manufacturing output and source merchandise to meet demand upticks.

Incomlend connects such small and medium enterprises (SMEs), with communities of investors, enabling them to buy and sell individual invoices in an invoice exchange platform.

The quick turnaround facility provided by Incomlend enables such companies to cash in an invoice as early as three days after its goods are shipped to the buyer. As a result, they have the working capital to cover their operational expenses and meet new orders coming from the US.

The invoice financing programme also provides the financial agility to pursue new growth opportunities as the appetite for garments from Bangladesh continues to soar globally.

Based on Bangladesh Export Promotion Bureau data, the country’s exports saw a sharp increase of 112% in May 2021, compared to 2020. The growth is primarily due to the rebound in demand for ready-made garments as major markets worldwide reopen their economies. According to McKinsey, the RMG sector accounts for 84% of Bangladesh’s exports.

“With the Incomlend invoice financing programme, we can retain our customer by offering competitive payment terms and free up our working capital,” said Sadat Apparels MD Rezaul Karim Jahid. “We now have access to a steady cash flow to pump back into the production cycle and increase turnover and profit, contributing significantly to our business growth.”

“Bangladesh is home to many apparel manufacturing SMEs and is an emerging export powerhouse in South Asia,” added Morgan Terigi, Incomlend CEO. “As a company with proven experience in the garment industry, Incomlend strongly supports these SMEs in capitalising on positive market conditions with our quick turnaround financing facility. We are enabling manufacturers like Sadat Apparels to scale their business and expand their footprint overseas by providing them with competitive and alternative non-recourse working capital solutions.”