India’s Top 10 Invoice Discounting Platforms

India’s Top 10 Invoice Discounting Platforms

In India, several alternative investment alternatives exist, but invoice discount investing is at present gaining favor with regular investors.

Although it has historically always been possible until a few years ago, there was no mechanism for regular investors to make an investment in these.

“In India, the idea of invoice discounting is not new. Traditionally, banks handled it, but recently, the door has been opened for retail investors to join in. The credibility of the entity making the ultimate payment at a later time is one of the main factors that the investor must consider “, according to Vijay Kuppa, co-founder of wealth and investment management fintech startup Orowealth.


A corporation can secure funding through the use of invoice discounting. This facility serves like an alternative to short-term loans and bank overdrafts.

A business can finance approximately 70% to 100% of unpaid sales invoices. This aids the applicant company in maintaining Cash Flow so they can finance the next initiatives or settle debts.

We’ll talk about the best-discounted sites in India in this article. Also have a look at Free Invoice Generator

The article we’re writing today lists India’s top 10 main invoice discounting systems. We would like to briefly define invoice discounting before we begin the list.

A corporation will borrow short-term financing from banks or financial institutions based on its outstanding invoices through the invoice discounting process. This facilitates the business’s ability to gain short-term loans to meet its immediate cash needs.

It is regarded like a substitute for company financing. It allows the company to deliver its unpaid payments to the banks, which will pay up to 90% of the total amount due.
Let’s first learn the subtleties of business payment, and then we may understand what invoice discounting is.

How Are Bills Resolved?

Invoice Discounting and Factoring SaaS Solutions - Cashfac

Instead of instant cash payments, almost 90% of transactions are completed through deferred credit arrangements like bills receivable and similar things. So, in practice, bills of Exchange Vouchers are provided by retailers or vendors for purchases and sales, and they are honored after a certain predetermined period. According to the Negotiable Instruments Act of 1881, this bill of exchange is a negotiable document.

Let’s say you own a paper business, and you sell the paper to a business that makes copies. Therefore, you will present the paper to the business, create a bill, and submit it for review and approval.

Once the company receives the bill, it becomes a bill payable for the other party and a bill receivable for you (the manufacturing company). Now, depending on the payment terms, you may receive your money in as little as 30 days or as much as 90 days. This payment schedule varies from business to business.

What Is Discounting on Invoices?

After a predetermined period, the vendors’ or merchants’ approved invoices receivable that they receive from their customers are honored.

As a result, there is a delay between when items are supplied and when they are paid for. Vendors can resolve this by going to any participating bank or financial institution and selling the bill mentioned above receivable at a discount for up-front cash.

The method known as “invoice discounting” allows companies to use their accounts receivable to get financing for pressing needs. For the services or items delivered, small and medium-sized businesses send bills to large companies (blue-chip enterprises).

To avoid delay, they bring their invoices to their preferred platforms for invoice discounting services, where they are converted into funds and transferred to businesses within 1-2 days at a discount rate that is determined by the risk assessment, market acceptability, and tenure (usually ranging from 30-120 days), according to Anurag Jain, founder, and executive director at KredX, an invoice discounting platform.

Let’s imagine, for example, that you owe Rs. 1 lakh to a copy-producing company for the paper you provided. After 90 days, they will honor the invoice following their policy. Therefore, the Rs. 1 lakh that is a payment receivable in your account is frozen for 90 days.

You go to the bank and provide them with this bill for, say, Rs 90,000 in immediate cash. After 90 days, the bank would then demand Rs 1 lakh from the paper manufacturing company. By doing this, you will receive payment right away for the services you provided, and the bank will make Rs 10,000 off of this transaction.

“Consider the existence of an online marketplace that allows thousands of sellers to sell their products. Payment to the platform is made instantly whenever someone purchases something from it, although the company often gives sellers a 90-day credit term before paying them.

The vendor’s working capital is thus restricted for 90 days; if he needs money to finance his firm, he may turn to finance. Since these Vendors usually operate on a smaller scale, bank financing is not a favored alternative because it takes a long time and requires a lot of paperwork. These sellers instead turn to invoice discounting, “Kuppa adds.

How Can Small-Scale Investors Invest In Discounting Of Invoices?

Depending on the risks and other criteria, many platforms, like KredX, Orowealth, and TradeCred, have made investments in invoice discounting possible. Each site has a different minimum investment requirement; it may be as little as Rs. 50,000.

“Invoice discounting services link reputable businesses and vendors with investors searching for a profit. Companies use the platform to publish their unpaid invoices to gain working capital. Investors provide these companies with immediate cash and receive a return on their investment within 30 to 90 days.

According to Jain, an investor can be anyone who complies with the fundamental predefined KYC requirements, like having a P.A.N. card and a valid Indian address proof, like an individual resident, a H.U.F. or proprietorship registered in India, institutional investors, banks/N.B.F.C.s/other financial institutions, or N.R.I.s.

Several major platforms provide this service. We shall now discuss these ten main companies that provide India’s greatest invoice discounting.

1- KredX

Company News Q1 FY 2019-20: The Latest From KredX - Blog KredX

One of the top companies for invoice discounting is KredX, which can assist you with your demands for invoice financing. KredX provides a range of invoice discounting services and products to aid consumers, businesses, and other organizations in reaching their financial aims.

Manish Kumar founded KredX, which provides a completely paperless process that helps produce high returns with lower risks. With KredX, you can gain profitable returns in just 30 to 90 days.

KredX, which Manish Kumar established, has played an important role in providing Cash Flow solutions to several corporations, companies, and S.M.E.s in India. They provide entirely paperless options for investing in novel concepts in order to generate great returns at minimum risk. They assist you in taking the profits in a little period of 30 to 90 days.

Additionally, it assists with portfolio diversification, which allows you to spread your risk across a number of industries. You can ensure a return of between 12 and 20 percent per year with KredX. By making investments in accepted bills, KredX helps you reduce the risk.

They assist you in gaining good returns within 30 to 90 days that are now unavailable from other institutions.


2. Invoicemart

Invoicemart | LinkedIn

The automated Trade Receivables Discounting System (TReDS) was instrumental in creating Invoicemart, which assists small, medium, and large businesses in overcoming capital constraints. It is the product of a partnership between junction services and Axis Bank.

Only M.S.M.E.s are allowed to use it. It began operating in 2017 and has since assisted many M.S.M.s in selling their receivables online. It has, however, cooperated with banks, non-bank financial companies, and limited private corporations but not with regular investors.

3. Receivables Exchange of India Ltd.

Receivables Exchange of India Limited :

The Receivables Exchange of India Ltd. is a Joint Venture between the National Stock Exchange (NSE) and the Small Industries Development Bank of India (S.I.D.B.I.) that has had success (R.X.I.L.).

R.X.I.L. operates on all TReDs platforms and adheres to the rules established by the Reserve Bank of India (R.B.I.). It adheres to R.B.I. since it guarantees that companies can expand in a sustainable environment and ensures that the M.S.M.E.s sector expands on all fronts.

4. M1xhange

startups: TReDS platform M1xchange raises Series-A funding from Mayfield and SIDBI Ventures - The Economic Times

The M1xhange is one of the most well-known trade receivables platforms. For M.S.M.E.s that are suppliers, this platform is a lifesaver during lean financial times. Trends has been authorized by the R.B.I. to provide a platform for financing M.S.M.E.s’ trade receivables from various lenders and corporations.

The invoice should be uploaded by the supplier and sent to the customer for approval. Following approval, M1xhange will validate it, at which point the financier may submit a bid. After submitting the bids, the provider can select the highest offer and pick when to pay.

5. Star Vendor

An online cloud-based tool called Priority Vendor makes use of A.I. to assist in bill reduction. However, access to the bills is restricted to companies who have been invited.

Priority Vendor has partnerships with several financial organizations, including T.V.s, Dabur, T.V.S., Godrej Consumer Goods, and Whirlpool. This is fantastic news for vendors connected to these businesses since you qualify and can take advantage of invoice reduction.

6. Priority Vendor

C2FO acquires India's largest early payment platform, Priority Vendor - C2FO

Priority Vendor R.X.I.L. was established as a joint venture between the National Stock Market (NSE), a receivables exchange for M.S.M.E.s, and the Small Industries Development Bank of India (S.I.D.B.I.).

To ensure that M.S.M.E.s may develop in a sustainable environment, R.X.I.L. complies with R.B.I. requirements and works on all TReDs platforms.

7. Falcon Group

Operation - Falcon Group

In India, the Falcon Group is a well-known P2P invoice discounting platform. They link investors with blue-chip corporations so that they can acquire access to borrowers and obtain loans without any default risk. By doing away with middlemen like commercial banks, depository institutions, etc., Falcon, unlike banks and financial institutions, boosts investor yields.

8. A.T.R.E.D.S. (Invoicemart)

A.T.R.E.D.S. (Invoicemart) is a partnership between MJunction Services and Axis Bank.

For M.S.M.E. suppliers and corporate buyers to interact with financiers, they might use the online platform invoice-mart. This platform helps M.S.M.E.s overcome their capital constraints by factoring in collateral-free finance.

9. Banking systems

Additionally, banks offer invoice discounting services to their most important business clients. Without the assistance of any intermediaries or platforms, the bank serves as a financier to its clients directly in this situation.

Banks provide their clients with specialized lending options. This enables them to immediately meet their working capital needs.

10. Fintech systems

One of the private platforms offering invoice discounting services to its vendors is Clearing. The platform concentrates on speedy vendor onboarding and leverages totally paperless processes.

The website also offers a variety of funding options via banks and invoice discounting marketplaces.

These platforms allow businesses to park their extra cash and earn bigger returns than they would with traditional financial products.

What varieties of invoice discounting are there?

When it comes to ensuring that there is a consistent cash flow and working capital, there are various sorts of invoice discounting that you can select from. But the primary varieties of invoice discounting are described below: –

Whole Turnover Discounting: With this method, money is raised for each invoice a company sends out across the entire Turnover.

Discounting that is conducted in confidence is what the term “confidential” refers to. Before the invoices are paid, neither the suppliers nor the customers will know that the business has raised funds against them.

Selective discounting is the process of selling just one receivable invoice to a third-party provider in order to raise money.

Knowing Which Discounting Company Best Suits Your Needs for Invoices

There are numerous invoicing businesses available, each with unique features and advantages. Some focus on certain business niches, while others provide a more general service.

Different services, including invoice factoring, invoice financing, payment plan discounting, and invoice management, are provided by invoice discounting businesses. This is a practical method for lowering the cost of your invoices and increasing your take-home pay.

It’s a fantastic approach to cutting costs. Removing extraneous paperwork and expenses helps businesses save money on fees. Doing away with the necessity for manual processing also allows them to save time so they can concentrate on their core business operations.

It effectively lowers operating expenses. Because they spend less time on administrative duties like data input and printing, firms are able to drastically reduce operational expenses by lowering their reliance on manual processing.

Sales and earnings rise as a result. This is because it does away with the necessity for manual processing, saving accountants time by allowing someone else on their team who might be more proficient at it to complete the task. You should understand how invoice discounting platforms operate as a business owner and which provider best suits your financial situation and operational needs.

Advantages of Invoice Discounting

Discounting bills offers the following seven benefits:

Obtain money as soon as you can.
Eliminate the need to collect money.
Any purpose is possible for the funds.
Reduce the danger to your business.
Your clients are not required to be informed.
Pay yourself first and more swiftly.
Invest in bad debt insurance.
Potential disadvantages of invoice discounting.

How to choose the best platform for invoice discounting?

Before choosing to use invoice discounting, a business should take the following factor into account:

Invoice discounting costs more, and bankers charge more fees than regular financing.
The corporation is liable for paying the financiers, not the creditors.
Prepayment and other amenities are provided by the financier or the platform.
The business should assess the platform’s usability. Depending on how user-friendly the platform is, it may or may not be accepted.

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