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Union Channel Finance

Union Channel Finance is a fully automated Supply Chain finance product for Dealers and Vendors of large Anchor Entities. This unique facility streamlines the cash of Channel Partners towards enhanced efficiency.

Sr No


Scheme Guidelines *


Eligibility of Anchor Company

  1. a. Any Company engaged in manufacturing/processing of widely acceptable product or Involved in distribution of widely acceptable products such as retail chain etc.
  3. b. Should have been in the field for a minimum period of 5 years with minimum turnover of Rs.100 crore during the immediately preceding years.
  5. c. Shall have positive Net worth and satisfactory leverage


Eligibility of Dealer / Vendor

  1. a. Any business unit engaged in supply of inputs/raw materials to Anchor Company or engaged in distribution / sale of finished products manufactured by Anchor Companies.
  3. b. Should have been in the field for a minimum period of 3 years and earned Operating profit during the immediately preceding 2 years.


Nature of Facility

The facility includes

  1. a. Dealer Finance- Dealer Finance enables dealers to procure goods from Anchor Corporates. Under this scheme, Bank offers short term finance at competitive interest rate to pay off Anchor Corporates on upfront basis. The finance is repaid by Dealers on due date as per agreed tenure.
  3. b. Vendor Finance- Under vendor Finance, Bank makes payment on behalf of the Anchor Corporate to their Vendors for supplies made against bills/invoices (to unlock working capital for vendors). The funding is liquidated by the Anchor Company on due date as per agreed tenure / terms.

  1. c. Purchase Order (PO)Based Dealer Finance - A liberalized variant of Dealer Finance to reputed AAA & AA  rated Anchor Companies.   Financing is done basis the Purchase Order of Dealer that is confirmed by Anchor. The financed amount is repaid by Dealers on due date as per agreed tenure from the date of the Purchase Order(PO).

  1. d. Payable Finance – A liberalized scheme of Vendor finance to reputed AAA & AA  rated Anchor Companies.Payables liability of Anchor are paid by Bank based on declaration from Anchor company. The funding is liquidated by the Anchor Company on due date (maximum 90 days) as per agreed tenure / terms.


Quantum of Finance


Vendor /Dealer





Rs.5 Crore

Rs.1000 crore 

Rs. 10 Lakh

Rs. 100 crores (With Recourse) 

Rs. 25 Crores (Without Recourse to Anchor)

Minimum & Maximum Umbrella Limit for Anchor “Without Recourse”, shall be as under:

Type of Anchors

Minimum Quantum

Maximum Quantum

AAA Rated

Rs. 5.00 crore

Rs. 1000.00 Crore*

AA Rated

Rs. 500.00 Crore*

A Rated

Rs. 250.00 Crore*

*Collateral free limit to be allocated to the dealers/vendors of the Anchor Company shall not exceed 20% of the total sanctioned umbrella limit.





No primary and collateral securities need be taken when the Limits are provided on “With Recourse” basis. However, for financing BBB rated Anchor and their Dealers 100 % collateral need to be obtained.


Primary Security:


Dealer Finance

Vendor Finance

Dealers of A/AA/AAA rated Anchor 

Hypothecation of Stock Not mandatory

Not mandatory

    Dealers of “BBB” rated Anchor

Hypothecation of Stock*

*Periodicity of submission of stock statement, insurance coverage shall be as per extant guidelines for advances against stock and Book debts.

Collateral Security:

On a case to case basis depending upon the rating of Anchor/Dealer and business volume.



Individual bill/invoice shall be repaid within due date subject to maximum of 180 days from the date of financing of the bill/invoice(90 days maximum in case of Payable Finance).


Rate of Interest

Attractive interest rates as per rating of Anchor, Dealer/ Vendor.


Benefits for Anchor Companies

Dealer Finance & Purchase Order (PO) based Dealer Finance

  • Accelerated Cash Flows.
  • Improved operating ratios by Conversion of debtors into cash.
  • Uninterrupted production & Increase in sales.
  • Strengthens partnership with dealers.
  • Reduced inventory.

Vendor Finance & Payable Finance

  • Enables the Corporate to consolidate their payment process across all vendors.
  • Timely supply of raw materials from Vendors.
  • Efficient management of working capital.
  • Strengthens partnership with vendors.


Benefits to Dealers

  • Easy Financing option on automated portal.
  • Choice of inventory and consequently higher sales.
  • Online portal for uploading invoice details any time.
  • Lowest turnaround time for funding.


Benefits to Vendors

  • Timely receipt of payments
  • Accelerates cash flows for uninterrupted production

* Conditions apply, for further details, please visit our nearest CAPS Branch.