I am getting lot of orders (both domestic and exports) but my bank limit is insufficient to finance these. My bank is taking time to enhance the limits. What routes are available to borrow to execute these orders?
You may consider factoring. It is akin to bill discounting and can be taken over and above the bank sanctioned limited. Whatever orders are discounted through factoring should not be included in current assets while computing DP for bank. In others words, you cannot take double financing. Generally factoring is costlier than bank financing. On the face of it, it looks similar but correct calculation of all the charges of factoring, reveal that factoring cost could be significantly higher than bank interest cost.
