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Frequently Asked Questions (FAQs)

These FAQs address your common questions about procuring steel on credit from Tata nexarc

What are you looking for?

Q. My supplier gives me credit, why formalise?

Credit

A. Informal credit is a favour. When your business grows, their limit may not. Formal credit scales with you – your limit grows, and you never have to ask twice.

Why Formal Credit is Better:

  • Scalable limits: Grows with your business needs
  • No awkward requests: Pre-approved credit lines
  • Predictable terms: Clear repayment schedules
  • Professional relationship: Business-focused, not personal favours

Q. Informal credit is easier – no paperwork.

Credit

A. True, but no paperwork means no track record. A little documentation today builds long-term trust and eligibility. One-time effort, lifetime value.

Documentation Benefits:

  • Credit history: Builds your business credit profile
  • Future opportunities: Opens doors to larger credit facilities
  • Better terms: Proven track record gets you better rates
  • Business growth: Essential for scaling operations

Q. I save money because I don't pay interest?

Interest Rate

A. Interest is often hidden in supplier prices. Our rates are transparent and separated from product pricing – giving you better negotiation power.

Hidden Costs in Supplier Credit

  • • Inflated product prices
  • • No transparency on actual cost
  • • Limited negotiation power
  • • Bundled pricing structure

Transparent Formal Credit

  • • Clear interest rates
  • • Separate product & credit pricing
  • • Better negotiation leverage
  • • Competitive market rates

Q. I don't want to damage my CIBIL score?

CIBIL Score Credit

A. We guide you to manage your CIBIL proactively. With discipline, it becomes your growth passport – helping unlock better rates and limits.

CIBIL as Your Growth Tool:

  • Expert guidance: We help you build and maintain good credit
  • Better opportunities: Good CIBIL opens doors to larger facilities
  • Lower rates: Strong credit history gets you better terms
  • Business credibility: Professional credit profile builds trust

Our Support: Dedicated team to help you maintain healthy credit practices.

Q. I get credit faster from my supplier?

Credit

A. It may be fast, but it's capped. Formal credit gives you a system that scales as your orders grow – no need for awkward follow-ups.

Supplier Credit Limitations

  • • Fixed, limited amounts
  • • Requires constant requests
  • • Personal relationship dependent
  • • No growth potential

Formal Credit Advantages

  • • Scalable credit limits
  • • Pre-approved facilities
  • • Professional process
  • • Grows with your business

Q. Suppliers don't ask for documents – why should I give them to you?

Documentation Credit CIBIL Score

A. No documents mean no formal record. A credit profile opens doors to bigger limits, better deals, and long-term financial credibility.

Why Documentation Matters:

  • Credit profile building: Creates your business financial identity
  • Bigger credit limits: Documented history enables larger facilities
  • Better deal terms: Proven track record gets you competitive rates
  • Long-term credibility: Professional standing in financial markets

Investment in Future: Small documentation effort today unlocks significant opportunities tomorrow.

Q. Informal credit feels safer – no penalties?

Credit

A. It may feel safer, but it's fragile. Supplier credit can be withdrawn anytime. Our credit is governed, transparent, and built to last.

Informal Credit Risks

  • • Can be withdrawn without notice
  • • No legal protection
  • • Relationship dependent
  • • Unpredictable terms

Formal Credit Security

  • • Governed by clear agreements
  • • Transparent terms & conditions
  • • Built for long-term stability
  • • Professional relationship

Q. I'm too small for formal credit.

CIBIL Score Credit

A. That's exactly why you should start early. Even small limits build your CIBIL and ensure you're ready when big opportunities come.

Why Start Small & Early:

  • CIBIL building: Small transactions create credit history
  • Future readiness: Prepared for larger opportunities
  • Growth foundation: Establishes financial credibility
  • Learning curve: Understand formal credit processes

Remember: Every big business started small. Your credit journey should too!

Q. I'll figure out credit later?

Credit

A. Delaying credit planning can slow down your growth! Building your credit profile today prepares you for big orders tomorrow – don't let them slip by unprepared.

Cost of Delaying Credit:

  • Missed opportunities: Big orders require immediate credit access
  • Slower growth: Limited by cash flow constraints
  • Competitive disadvantage: Others with credit move faster
  • Emergency situations: No backup when cash is tight

Act Now: Start building your credit profile today so you're ready when opportunities knock!

Q. CIBIL sounds scary – I don't want problems?

CIBIL Score

A. CIBIL isn't a threat – it's your business's financial resume. We help you manage it well, so it works in your favour.

CIBIL as Your Financial Resume:

  • Professional credibility: Shows your payment discipline
  • Better opportunities: Opens doors to larger credit facilities
  • Competitive advantage: Good score gets you better terms
  • Business growth tool: Essential for scaling operations

Our Support: We guide you through every step to ensure your CIBIL works for you, not against you.

Q. What if I'm reported? Won't my score drop?

CIBIL Score

A. Reporting small delays (SMA-0) doesn't damage your score. We offer structured grace periods – the system is built to help, not punish.

Understanding CIBIL Reporting:

  • SMA-0 reporting: Small delays don't hurt your score
  • Grace periods: Structured 60+30 day payment terms
  • System design: Built to support, not penalize businesses
  • Recovery support: Help available if issues arise

Our Approach: We work with you to maintain healthy credit practices and provide guidance when needed.

Q. CIBIL is a trap for small businesses?

CIBIL Score

A. It's actually your biggest enabler. Think of it like a resume: every payment builds credibility for future funding.

CIBIL as Your Business Resume:

  • Payment history: Every transaction builds your credibility
  • Future funding: Opens doors to larger credit facilities
  • Business enabler: Tool for growth, not a trap
  • Competitive advantage: Good score gives you better opportunities

Reality Check: CIBIL is your pathway to financial freedom, not a limitation!

Q. I'd rather stay off the radar?

Credit

A. Staying invisible limits your growth. Without a credit profile, you'll miss bigger deals. Let's make you visible to the right people.

Staying Off the Radar

  • • Limited growth opportunities
  • • Missing bigger deals
  • • No financial credibility
  • • Stuck with small orders

Being Visible (Right Way)

  • • Access to larger opportunities
  • • Professional credibility
  • • Better business relationships
  • • Scalable growth potential

Q. I'm worried my score will drop?

CIBIL Score

A. A few delays don't ruin your CIBIL. We help you structure repayments, so small hiccups don't become problems. It's the pattern that matters.

Understanding CIBIL Patterns:

  • Pattern over perfection: Consistent behavior matters more than occasional delays
  • Structured repayments: We help you plan manageable payment schedules
  • Small hiccups: Minor delays don't create major problems
  • Recovery support: Guidance available to prevent issues

Our Promise: We work with you to maintain healthy credit patterns, not perfect records.

Q. If my score drops, I'm done?

CIBIL Score

A. Not true. You can bounce back. Timely repayment rebuilds scores – we'll guide you through recovery if needed.

CIBIL Recovery Process:

  • Bounce back possible: Scores can be rebuilt with consistent payments
  • Timely repayments: Regular payments gradually improve your score
  • Recovery guidance: Step-by-step support through the process
  • Not permanent: Credit scores are dynamic, not fixed

Support Available: Our team helps you navigate recovery and rebuild your credit profile.

Q. CIBIL means I need to be perfect?

CIBIL Score

A. No one is perfect. CIBIL values consistency over perfection. One-off delays are fine – just stay steady overall.

CIBIL Reality Check:

  • Consistency over perfection: Regular patterns matter more than perfect records
  • One-off delays acceptable: Occasional delays don't ruin your score
  • Overall steadiness: Focus on maintaining general payment discipline
  • Human understanding: System recognizes business realities

Key Message: Be consistent, not perfect. CIBIL understands business cycles!

Q. Why should lenders track my data?

CIBIL Score

A. Because it earns you better terms. A good CIBIL gets you lower rates, longer durations, and larger limits. No data = no leverage.

No Data = No Leverage

  • • Higher interest rates
  • • Shorter repayment terms
  • • Limited credit amounts
  • • No negotiation power

Good CIBIL = Better Terms

  • • Lower interest rates
  • • Longer repayment durations
  • • Larger credit limits
  • • Strong negotiation position

Your Data Works For You: Credit history becomes your bargaining chip for better deals!

Q. I'm not ready for this kind of risk.

Credit

A. Not building a credit profile is the real risk. Without it, you stay stuck with small orders and informal deals.

The Real Risk: Staying Small

  • Limited growth: Stuck with small order sizes
  • Informal dependency: Reliant on personal relationships
  • Missed opportunities: Can't take on bigger projects
  • Competitive disadvantage: Others with credit move ahead

Smart Risk: Building credit profile is an investment in your business future, not a gamble!

Q. CIBIL is only for big companies?

CIBIL Score

A. Not at all. CIBIL is for any business that wants to grow. Start small, build credibility, and unlock larger opportunities.

CIBIL for Every Business Size:

  • Start small: Begin with manageable credit amounts
  • Build credibility: Every payment strengthens your profile
  • Unlock opportunities: Good history opens bigger doors
  • Growth pathway: Scale from small to large systematically

Truth: Every big company started small. CIBIL helps you follow the same growth path!

Q. Missed a payment by 2-4 days – will that ruin my CIBIL score?

CIBIL Score Penalty

A. Short delays may not immediately affect your CIBIL score but will attract penal interest. Frequent delays can reduce your credit score and affect future loan eligibility.

Short Delays (2-4 days)

  • • May not immediately impact CIBIL
  • • Penal interest will apply
  • • Isolated incidents are manageable
  • • Focus on overall payment pattern

Frequent Delays

  • • Will reduce credit score
  • • Affects future loan eligibility
  • • Creates negative payment history
  • • Harder to get better terms

Key Takeaway: Consistency matters more than perfection. Avoid making delays a pattern.

Q. Once my limit is approved, how long is it valid for?

Credit

A. You get 12 months. After that, renewals are simple – just repay on time and update your financials.

Credit Limit Validity:

  • Duration: 12 months from approval
  • Renewal process: Simple and straightforward
  • Requirements: Timely repayments + updated financials
  • Applies to: Both Channel Finance and Factoring

Pro Tip: Maintain good payment history throughout the year for smooth renewals!

Q. Factoring gives me funds – but how long do I get to repay?

Repayment

A. Repayment timelines range from 30 to 90 days. Depends on your buyer terms, industry practices, and risk assessment.

Factoring Repayment Timeline:

  • Range: 30 to 90 days
  • Buyer terms: Based on your customer's payment cycle
  • Industry practices: Varies by sector standards
  • Risk assessment: Evaluated case by case

Note: Timeline is determined during the approval process based on your specific business situation.

Q. What if my business grows and I need a higher limit?

Credit

A. Yes, you can apply for a credit limit enhancement anytime, based on:

Enhancement Criteria:

  • • Timely repayments
  • • Improved financials
  • • Increased buyer demand
  • • Good credit history

How It Works:

  1. 1. Submit updated financials
  2. 2. Lender reviews your request
  3. 3. Approval, if eligible

Note: A waiting period may apply before reapplying for enhancement.

Q. Does delayed payment under Factoring affect my credit score?

CIBIL Score

A. Yes. Factoring is a formal credit facility, and delays are reported to credit bureaus. Consistent, on-time repayments help build a stronger CIBIL score.

Impact of Delays:

  • Formal reporting: Factoring delays are reported to credit bureaus
  • Credit score impact: Can negatively affect your CIBIL score
  • Future implications: May impact future credit applications

Building Strong CIBIL:

  • Consistent payments: Always pay on time
  • On-time repayments: Build positive credit history
  • Stronger score: Better terms for future facilities

Q. I have heard of 3PL – but what do I really get?

Credit Lenders

A. You get access to two types of credit:

Channel Finance

Working capital support linked to supply chain transactions.

Factoring

Receivables-based financing against invoices raised to credit-worthy buyers.

Both options: Designed to support your business growth with flexible financing solutions!

Q. Sounds good, but how much credit can I get?

Credit Lenders

Channel Finance:

  • TCL: Up to ₹1.5 Cr. (Unsecured), ₹2 Cr.-₹20 Cr. (Secured)
  • Mintifi: Up to ₹1 Cr. (Unsecured; Collateral reduces ROI/processing fee)
  • StrideOne: Up to ₹1 Cr. (Unsecured)

Factoring:

  • TCL: ₹1 Cr.-₹5 Cr.
  • ICICI/Kotak: Up to ₹100 Cr. (preferred ₹20 Cr. and above)

Q. These lenders must charge a lot, right?

Credit Lenders

A. Not really. Rates are competitive and vary by lender:

Channel Finance:

  • TCL: 12.20% p.a. (fixed)
  • Mintifi: 12.00%+ (dynamic)
  • StrideOne: 15.50% p.a.

Factoring:

  • TCL: 12.00% p.a.
  • ICICI/Kotak: Case-based, dynamic pricing

Note: All quotations shared by Tata nexarc are inclusive of applicable interest rates.

Q. Are there any processing or stamp duty fees?

Application Fee

A. All charges are clearly communicated upfront – no surprises.

Processing fees:

  • TCL & StrideOne: Nil
  • Mintifi: Up to 1% of sanctioned limit (plus GST)
  • ICICI/Kotak: Case-specific (included in final quote, if applicable)

Stamp duty:

Varies from state to state, as per applicable laws.

Q. I'm confused about when the credit period starts?

Credit

A. For both Channel Finance and Factoring, the credit period starts from the invoice date.

Credit Period Timeline:

  • Start date: Invoice date (not delivery or order date)
  • Applies to: Both Channel Finance and Factoring
  • Clear tracking: Easy to calculate repayment dates
  • Consistent approach: Same rule across all credit types

Q. Not sure where I'll have to make repayments?

Repayment

A. All repayments go directly to the lender's authorised bank account. Easy and traceable.

Repayment Process:

  • Direct payment: To lender's authorised bank account
  • Easy process: Simple bank transfer or online payment
  • Fully traceable: Clear payment records and receipts
  • Secure method: Authorised accounts ensure safety

Q. Will I need to raise the invoice to my customer?

Invoicing

A. No, Tata nexarc raises the invoice, so you can focus on fulfilling the order.

Invoicing Made Simple:

  • Tata nexarc handles: All invoice generation and processing
  • You focus on: Order fulfillment and delivery
  • Streamlined process: Less paperwork, more efficiency
  • Professional handling: Proper documentation and compliance

Benefit: Concentrate on your core business while we handle the administrative work!

Q. Delays can happen – what are the interest and penalties for late payment under Channel Finance?

Penalty

A. Late payments attract penal interest — typically 2%–3% per month over the standard interest rate. Charges vary by lender:

TCL

Any delayed payment will attract charges as per the slabs below:

Delay in Payment Delayed Interest Rate
(over & above sanctioned Interest rate)
Between 0-7 days 12% p.a.
Between 8-30 days 24% p.a.
31 days & above 36% p.a.

Mintifi

Any delayed payment will attract charges as per the slabs below:

Delay in Payment Delayed Interest Rate
(over & above sanctioned Interest rate)
Between 0-7 days 12% p.a.
Between 8-30 days 24% p.a.
31 days & above 36% p.a.

StrideOne

If repayment is not made within the 5-day grace period, delayed charges apply from day 1 on the outstanding principal:

Delay in Payment Delayed Interest Rate
(over & above sanctioned Interest rate)
Between 0-5 days 0%
5 days & above 36% p.a.

Note: These rates are subject to change by the respective lenders and may be notified to the customer. Delayed payments may also negatively impact your CIBIL score and affect future credit eligibility.

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