Managing your finances is an essential part of running a successful business, and invoice discounting can be an invaluable tool to achieve it.
In India, there are plenty of investment opportunities available right now, but investing in invoice discounts has grown in popularity among everyday investors due to its numerous advantages.
What is Invoice Discounting?
Invoice discounting is when a business can sell an unpaid invoice for part of its value. Before the business gets the money, the lender checks its risk based on various factors, but mostly on how trustworthy the companies are that owe money for the invoices.
After the assessment, the finance provider will offer terms that state how much money the business will get and the fee for providing the discounting service.
The market is saturated with companies that offer invoice discounting, giving business owners a platform to sell and retail investors the opportunity to purchase invoices created by reliable businesses. With this, businesses can get access to working capital through unpaid invoices that have been issued to creditworthy companies.
Further, the cost associated with it is reasonable, and investors can immediately receive a return on investment when they purchase the outstanding invoices at a set rate of interest. In India, invoice discounting has become a popular financing option for businesses as it can provide immediate cash flow compared to a traditional bank loan.
Therefore, I have researched a list of the 12 best invoice discounting platform to help you choose one as per your requirements. Let’s take a look at them one by one.
If you’re searching for a low-risk, high-reward financial opportunity that can be accomplished within one to three months, KredX is worth exploring.
Not only does it provide an entirely online experience, but it also enables you to diversify your investments across various sectors with unpaid invoices from different industries.
- Low-risk, high-returns for investors.
- Minimum return of 12 – 20% annually.
- Quick investment cycle – 30 to 90 days.
- Effortlessly add, withdraw and manage your finances with ease.
Looking for a reliable solution to address the impediments of working capital that MSMEs face? Invoicemart has got your back. It’s an electronic Trade Receivables Discounting System (TReDS) platform jointly established by Axis Bank and mjunction services, providing hassle-free access to financing channels to save time, money, and energy.
Invoicemart has been operational since July 2017, providing MSMEs with an online platform to discount their receivables. It is only accessible by Banks, NBFCs, HUFs, Sole Proprietorships and Public or Private Limited Companies. Unfortunately, retail investors are not able to access the service as this portal was developed specifically for the use of MSME’s – no one else!
- You can receive the payment within 24 hours of selling an invoice.
- Access to a variety of lenders for reasonable funding costs
- Receive payment for receivables and not incur any debt on your books.
- Secure origination and settlement procedures based on technology.
- Best-in-class intuitive UI.
RXIL, a joint venture between SIDBI and NSE to facilitate financing for MSMEs in India, launched TReDs- an RBI-regulated platform. This was the first institution to be approved by RBI to operate such a system that has revolutionized financing for Banks, NBFCs, corporate, private limited companies, as well as other businesses authorized by RBI.
- Compliance with the 2006 MSMED Act.
- Profitable management of financial flow.
- Reduced expenses and paperwork.
- Higher transparency.
- Best discount rate as a result of multiple financiers participating in the auction.
- Effective capital allocation.
- Timely payment receipt.
- Beneficial for business expansion because of increased liquidity.
M1xchange is a marketplace where you can sell unpaid sales invoices to banks and other financial institutions. Not only does this provide a convenient platform for sellers, but also gives them access to secure and reliable financing options.
The Settlement and Payment Act of 2007 established the revolutionary portal, M1xchange. This platform enables traders across India’s small and medium-scale enterprises to sell bills and discount invoices. Major participants on this exchange include various micro, small & medium enterprises (MSMEs), corporations, public sector units, government agencies, banks as well as Non-Banking Financial Corporations (NBFCs).
- Comprehensive online platform to facilitate trade receivables discounting.
- Real-time invoice discounting with risk assessment and credit evaluation process.
- Instant cash payment.
- No collateral required.
Priority Vendor is a revolutionary cloud-based platform that utilizes Artificial Intelligence to cut costs and bills. This exclusive system can only be accessed through an invitation sent directly from Priority Vendor for businesses who have met their qualifications.
Priority Vendor has formed partnerships with renowned companies, such as Godrej Consumer goods, TVS, Dabur, and Whirlpool – just to name a few!
- Automated bill management system.
- Easy integration with existing business processes.
- Multi-factor authentication for secure transactions.
- Low processing time and cost-effective financing solutions.
- Option to choose from various lenders for the best interest rates.
- Comprehensive credit evaluation process.
The Falcon Group in India is a prominent P2P invoice discounting platform, linking investors to reliable companies for loans with no default risk.
By eliminating the need for intermediaries, such as commercial banks and depository institutions, they provide higher returns than traditional banking methods while still providing necessary liquidity.
This ensures investors can access borrowers without any hassle or worry of potential defaults.
- Achieve returns in a span of one to four months.
- Invest a minimum of 1.5 lacs in trustworthy and reliable borrowers who have been thoroughly vetted.
- Generate monthly revenue without any additional fees or costs.
TradeCred is a marketplace where regular investors can invest in invoice discounting. The mechanism enables businesses to raise short-term financing from investors in a straightforward manner. It provides a better rate of return than stocks and FDs while being less risky. The site includes an easy-to-use layout, and only a Google form is required to create an account.
TradeCred employs stringent security procedures and verifies whether the organization placing the order is creditworthy or not. There is also less risk because it is available to all individual investors. As a result, it’s a great option for anyone looking to participate in the invoice discounting sector.
- Easy to use mobile app.
- Anytime access to your money.
- Start investing with as little as INR 1 lakh
- Multiple ways to generate income, including Blue chip invoicing, Leasing, AA debt, and sovereign bonds
FlexiLoans takes the role of a lender rather than a facilitator. With their lending product, Flexi Vendor Financing, SMEs can easily get discounted bills. This platform provides quick working capital solutions with an approval process that takes less than 72 hours.
To decrease its risks, the company requires that applicants have been in business for a minimum of one year, with annual revenue amounting to INR 20 lakh and profits totaling more than INR 5 lakh. Furthermore, companies must also be registered as suppliers of blue-chip corporations.
- Vendor earns interest on the borrowed amount. This rate exceeds all others.
- Vendor receives shares from the borrowing firm.
- Purchases become more enticing, lessening price sensitivity.
- The borrowing company’s acquisition is smooth because it doesn’t need a lender.
- Leasing options let borrowers avoid full repayment, helping cash-strapped businesses.
Invoice Trades is a tech-enabled platform that aims to increase cash flow for operational needs, speed up expansions, and maintain the highest level of secrecy.
At Invoice Trades, they are committed to increasing the value of your portfolio at better rates via offering a range of convenient invoice discounting advantages and invoice financing options with a low amount of risk.
- Real-time access to working capital
- Immediate loans against pending invoices
- Quick and secure transactions
- User-friendly platform with an automated document viewing system
- Automated compliance checks
Clear Invoice Discounting is an intuitive and powerful platform that helps businesses manage their cash flow more effectively. By leveraging the latest advances in AI and Machine Learning technology, enterprises can easily apply for discounts when invoicing their suppliers, resulting in faster payments and improved inventory control.
When it comes to obtaining early payments from suppliers, buyers can now upload invoices directly onto any TReDs marketplace backed by the Clear Invoice Discounting platform instead of utilizing their surplus cash or applying for a line of credit from banks. This ensures buyers have full control over the payment decisions and higher liquidity at reduced costs.
- Gain 2–5 times more money while incurring no costs.
- Manage vendors digitally. Increase involvement by three times.
- Take advantage of flexible financing alternatives for early bill payment.
- Using the shortest ERP integration, go online in days.
- Treasury, TReDS, Banks, and NBFCs are your options for platform-based funding.
UpScale by CredAble is an advanced AI and tech platform that matches you with trustworthy lenders, ensuring you receive competitive interest rates.
With one simple application process that requires no paperwork, you can apply for an impressive 30+ lenders – all without having to leave your seat! What’s more?
You’ll also benefit from their fast approval and disbursement times (within two business days)!
- Advanced AI and tech platform.
- Competitive interest rates.
- Fast approval and disbursement.
- Wide lender network.
- No paperwork required.
Finworks360, a Northern Lights Ventures Private Limited unit, is among India’s top online business finance solutions providers.
Finworks360 facilitates contact between sellers and investors and offers credit appraisals and checks for businesses operating in the country. It stands apart from any other receivables marketplace available as it provides more comprehensive services that lend reliability to your venture.
Finworks360 is an ISO-certified platform that has successfully earned both ISO 9001:2015 (Quality Management System) and ISO 27001:2013 (Information Security Management System).
To distinguish itself from other receivables marketplaces, finworks360.com focuses on the recovery of accounts receivables along with structuring programs. Furthermore, they give investors- Individuals/Corporations/Banks/NBFCs- a unique option to exit early through its secondary marketplace module.
- Invoice finance without mortgages or shares.
- Funding up to 95% of the invoice amount for your business. Procedures are swift, and the payment is released within 24 to 72 hours.
- The credit management team at Finworks 360 manages invoices and collections for the business.
Invoice discounting is an effective tool for companies to access working capital and increase liquidity.
With the help of invoice discounting, businesses can easily manage their cash flow without having to worry about long wait times.
I hope this guide has helped you better understand invoice discounting and the various solutions that can help you make the most out of it.