- The Story
Naaz Group, an entrepreneurial venture, was initiated with a vision to carve a niche in the market. Initially, the company sought funds to kick-start its business operations and approached several banks. However, Naaz Group received funds offers from Fintech companies with higher rates, which served its immediate needs but posed limitations for scaling the business.
Phase 1
Initial Funding and Growth: Undeterred, Naaz Group utilized the business loan (without collateral with a higher rate of intrest) to fuel its business growth. Over the next few years, it successfully expanded its operations and garnered a significant clientele. However, as the business flourished, it encountered a pivotal challenge when it secured a large number of clients but lacked the necessary funds to fulfill their needs.
Phase 2
Naaz Group approached several Banks: Seeking funds, Naaz Group turned to a few banks, seeking working capital and term loans for its expansion, but the banks rejected its proposals, asking for collateral security.
Phase 3
 Again it approached the FinTech Companies Exploration of Alternative Financing: Naaz Group received fund offers from FinTech companies and accepted them at higher interest rates. Without realizing that it was repeating its past mistakes, the company kept taking multiple unsecured loans from Fintech companies for many years just to stay in business. After some time, it realized that the cost of funds acquired from the FinTech Companies significantly outweighed its profit margins, intensifying its financial distress. It entered into an EMI trap, making it difficult to pay EMIs on time due to more outflow of cash, and it was about to shut down its business.
Phase 4
Seeking Support from PaisaBiz: With its business teetering on the brink of closure due to recurring financial challenges, Naaz Group’s desperation led it to seek guidance from PaisaBiz, a renowned financial advisory firm. It narrated its tumultuous journey and sought expert advice to salvage its business.
Intervention by PaisaBiz
Understanding Naaz Group’s predicament, PaisaBiz experts conducted a comprehensive analysis of its business and financial landscape. The case study findings are as follows:
Fintech companies have products that suit the needs of SMEs and small businesses, but the short-term cost of funds often erodes the business margin.
The cost of funds of Fintech firms is much higher than that of the traditional banking system. Naaz Group chose funds with higher interest rates.
The traditional banking system requires collateral security for taking loans. .The traditional banking system offers products like working capital and term loans only.
Instant funds are not available from traditional sources at a lower cost.
Outcome
 Empowered by PaisaBiz’s strategic intervention, Naaz Group gained access to a diverse array of financial solutions tailored to its unique business requirements. With their guidance, it successfully navigated through the financial turmoil, securing funds at competitive rates and favorable terms. Armed with renewed confidence and stability, Naaz Group revitalized its business operations, steering it towards sustained growth and profitability.
Conclusion
Naaz Group’s journey underscores the pivotal role of financial advisory services in empowering entrepreneurs to overcome formidable challenges and achieve their business aspirations. By partnering with PaisaBiz, it not only survived the tumultuous ordeal but emerged stronger, equipped with the knowledge and resources to thrive in a dynamic business environment.
Optimized Financial Strategy
We formulated a bespoke financial strategy designed to alleviate Naaz Group’s immediate cash flow constraints while ensuring long-term viability and growth for its business.
Diverse Financing Solutions
Leveraging our extensive network and expertise, we facilitated access to a diverse range of financing options beyond traditional banking, enabling Naaz Group to secure funds at competitive rates and favorable terms.
