WCBU records 53% growth

Lanka ORIX Leasing Company Ltd. (LOLC)'s Working Capital Business Unit (WCBU), demonstrated a striking portfolio growth of 53 percent over the first six months of the 2010/2011 financial year, which is indicative of the current trend in interest rates creating an impressive demand for credit.

The WCBU of LOLC, begun in 1992 was Sri Lanka's first factoring company registered under the name of Lanka ORIX Factors Ltd (LOFAC). Over the years, LOFAC diversified to offer total working capital solutions and expanded to offer innovative and personalized products and services specializing in Structured Working Capital Loans, Purchase Order Financing and Cheque Discounting.

LOFAC was later rebranded as the WCBU of LOLC when it merged with the LOLC Group in 2009.

WCBU's involvement in working capital is to assist enterprises to run their day to day businesses through advances against future receivables. Once a credit sale takes place, the client discounts his receivables with the factoring company and receives immediate cash. The factoring company will then follow-up with the debtor(s) and collects the dues on the applicable future date. If the client wishes confidentiality, he may collect post dated cheques from his debtors and forward them to the WCBU in settlement of his borrowings, generally considered as Invoice Discounting.

The WCBU also provides structured loans to existing and new customers for business improvement, capital investment or import/purchase of raw materials. Purchase Order Financing for existing factoring clients are arranged to meet requirements of bulk purchases and seasonal orders.

A popular and fast growing product offered by the WCBU is Cheque Discounting where the client's borrowing is settled either via the deposit of post dated cheques collected/collectible from his individual debtors.