Cash flow issue is a common problem faced by eCommerce sellers in India. Sellers often require loans from banks and lenders to meet the working capital requirements. Late payments are the most common reason for cash flow problems in eCommerce as Marketplaces release the payments post 7 days of order delivery.
But thank god Flipkart has given a thought about it and has launched a program for daily fund release. Under this program, your upcoming payments will be credited to you within 1 day on every day of the week, with an option to withdraw additional funds from a pre-approved line of credit.
Learn all about Flipkart's Early Settlement and Line of Credit Program
What is an Early Settlement PLUS (ESPLUS) Facility?
Flipkart sellers receive their order payments after a certain credit period – 7/10/15 days for Gold/Silver/Bronze tier sellers respectively. An ESPLUS facility allows the seller to receive upto 80% of their upcoming Flipkart payments instantaneously without having to wait for the actual credit period. Along with this, the sellers also get a pre approved line of credit to withdraw additional funds instantly.
The upcoming Flipkart payment details are available on the “Payments Overview” page under the “Payments” tab on Flipkart seller portal.
Are there any charges to avail this?
- Free Sign-up – 0% Processing Fee
- Every advance payment made will have a nominal transaction charge based on the tier of the sellers – 0.05% per day for Gold, 0.055% per day for Silver and 0.064% per day for Bronze
- The option to withdraw additional funds from the pre-approved line of credit will have regular loan interest charges associated with it from the first day itself
How will it work?
- You would first need to complete the onboarding journey by clicking on the URL provided – its a quick 2 min completely digital onboarding process with minimum documentation – GST, KYC docs and canceled cheque
2. The lender will assign an ESPLUS line limit for every onboarded seller
A) 1.5-2.7 times of the seller’s average monthly payout of last 6 months for Gold tier sellers – upto a max cap of 50 lac
B) 1.25-2.3 times of the seller’s average monthly payout of last 6 months for Silver tier sellers – upto a max cap of 50 lac
C) 1-1.8 times of the seller’s average monthly payout of last 6 months for Bronze tier sellers – upto a max cap of 50 lac
3. A part of this limit would be assigned for the advances of upto 80% of the seller’s upcoming payments (ES limit) –
- Last 6 months average daily payout value * 10 for gold
- Last 6 months average daily payout value * 13 for silver
- Last 6 months average daily payout value * 17 for bronze
4. Once an order starts reflecting under “upcoming payments” on the “Payments overview” page of the seller portal, Flipkart will inform the lender. Lender will then disburse upto 80% of the upcoming payments everyday subject to a maximum cap of the ES limit assigned. These advances will be paid to the seller automatically on a daily basis
5. The difference between the ESPLUS and ES limits will be available to the seller as a line of credit to withdraw additional funds from anytime. Disbursals against this line of credit facility can be availed through a single click self serve request option on the lender’s dashboard. Sellers can also put in separate requests over emails to Flipkart or the lender
6. Sellers also have the flexibility to utilize a part of the ES limit to withdraw funds as a line of credit
How will the repayments happen?
Repayments will happen via an escrow account. For every seller who is onboarded to this program, all future payments from Flipkart will happen into an escrow account under the control of the lender. The lender will adjust these payments based on the outstanding amount due against the respective seller.
Sellers can also repay
- Using auto debit facility/ using ACH
- Using Net banking/ UPI
- Through cheques
How can I check details around the line limits assigned and how much money has been provided as an advance under the ES limit or how much funds have been availed from the line of credit facility and their respective repayment details?
- You will be informed of your respective ESPLUS and ES line limits at the time of onboarding.
- You will get daily mails containing the disbursement details for the day. There will also be a lender dashboard which will provide all the required details for you around the advances made, funds withdrawn from line of credit (if any) and their respective statements of debit/credits.
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Sunil Kumar Sah @DigitalSunilSah
Sunil is an E-commerce Seller, Blogger, YouTuber and Digital Marketer. He is a digital enthusiast and passionate about Online Selling. He loves sharing his knowledge and experiences on eCommerce in this blog and on his Hindi YouTube Channel “Ecommerce with Sunil” and the English Channel “Ecomsprint“