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Cherry Agencies raised 3x their loan requirement at lower interest rates through Yubi Credit Market

The result
banner 01 Cherry Agencies raised 3x their loan requirement at lower interest rates through Yubi Credit Market

Rajesh Agarwal

Managing Director

“Connecting with different lenders and meeting their requirements has become challenging. We needed a platform that would let us connect with multiple lenders at once and also raise debt for the company as needed. Yubi Credit Market solved all these challenges for us and helped us raise way more than we had come for and at unbelievable rates.”

About the Company

Founded in mid-1991, with automotive tyres and tubes as the mainstay, Cherry Agencies today is one of the biggest tyre distributors in the country, having the largest network of Tyre dealers.

Cherry deals in almost all leading brands in various categories covering two and three-wheelers, passenger cars, commercial vehicles, farm vehicles, and trucks, and operates its distribution  business through  9 offices in Bangalore, Mysore, Hubli, Mangalore, Goa, Salem, Chennai, Hyderabad, and Navi Mumbai.

In 2007, with the aim of connecting with the end consumer directly, the company launched Tyre  Park, the retail arm of Cherry. Tyre Park has 40+ strategically located, well-equipped retail showrooms and caters to 10,000 consumers monthly.

The Govt of Karnataka has awarded Cherry Agencies a contract under the state’s Samrudhhi program, a welfare initiative, as the only government-recognised tyre franchisee company to be able to open several smart and cost-effective tyre stores in tier 2 & 3 towns as a franchisor with a 100% subsidy from the Government. 

Business Requirements

The company was looking for a single platform where they could not just manage their existing lenders but also connect with more lenders to raise a debt of INR 12 Cr through purchase bill discounting. 

  1. They had 3 existing lenders, each with a different documentation requirement for giving loans. They needed a platform to consolidate their business information and reach out to lenders seamlessly. 
  2. The company was paying high-interest rates for its existing loans and was looking to refinance them. 
  3. Additionally, they needed to raise INR 12 Cr through purchase bill discounting for improved cash flow on new projects. 

The Challenge

The primary challenge of the company was access to lenders who could offer credit on terms that were suitable for the business. 

  1. The company had limited drawing power and needed to raise more credit than its books allowed. 
  2. They need the funds within 2 months, which is less than the average disbursement TAT of most lenders.
  3. They were looking for better interest rates than their existing loans but were unable to negotiate a deal that fit their business needs. 

The Solution

Cherry Agencies needed a one-stop, automated solution enabling them to connect with multiple lenders and negotiate terms. After onboarding on Yubi Credit Market, and once the deal was created, the following happened:

  1. The company received 12 expressions of interest from lenders like IndusInd, Federal, ICICI, Kotak, HDFC, and more, of which the company shortlisted 10 lenders.
  2. With Invoice Discounting being the choice of credit instrument, the company ensured cash flow by receiving capital quickly.
  3. In addition to fresh credit of INR 12 Cr, they could get INR 15 Cr of the existing loans refinanced and an enhancement of INR 10 Cr. 
  4. The new lenders on Yubi platform offered the company refinancing at up to 1.5% lower interest rates than the existing lenders, helping them lower the overall cost and a loan that had the right structure for them.
  5. The Yubi Credit Market team acted as advisors, advising the team at Cherry Agencies on communication at all stages of the loan process and selecting the deal that best suited their needs. 

The Results

Cherry Agencies onboarded on Yubi Credit Market with a requirement of INR 12 Cr but secured INR 37 Cr at a reduced cost of borrowing. As a result, the company was able to accelerate its business plans. 

  1. Reduced cost of borrowing: 1.5% less than the current interest rate
  2. Quick TAT of deal closure: 2 months for the first loan of 12 Crs. Another loan of INR 25 Crs was disbursed within a few weeks.
  3. Deal Value: INR 37 Cr (INR 12 Cr. Fresh Debt + INR 15 Cr. refinance + INR 10 Cr. enhancement)
  4. No. of Expressions of Interest: 12, No. of Accepted Interests: 10