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Invoice Financing vs Factoring: What’s the Difference?

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Invoice Financing vs Factoring: What’s the Difference? Delayed payments are a common problem. Businesses of every size face this challenge. A manufacturer might wait months for bulk payments. A service provider might struggle with 60-day credit terms. These unpaid invoices put pressure on cash flow . Growth slows down when money is stuck. To solve this, businesses use receivable-based solutions . Invoice financing and factoring are the most common tools. Both unlock money tied up in invoices. Both improve working capital. But they work in very different ways. Choosing the right one depends on customer relationships, financial planning, and business goals. What Is Invoice Financing? Invoice financing is a loan against unpaid invoices. Businesses submit invoices to a financing partner. The lender advances most of the invoice value. Usually, 80–90% is released. Once the customer pays, the business clears the loan with fees. In this model, the business keeps control of collections....
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How to Choose the Right Bill Discounting Platform in 2025

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How to Choose the Right Bill Discounting Platform in 2025 For micro, small and medium enterprises (MSMEs), accessing working capital promptly is a top priority, especially in such a financial landscape. Traditional lending avenues might hinder their process here, as they’re often slow, document-heavy and dependent on collateral. This is where bill discounting and invoice discounting platforms can be resourceful, they offer efficient, digital alternatives to unlock liquidity using unpaid invoices.    Plus, being in such an evolving landscape, businesses must choose the right platform/partner for discounting bills of exchange or invoices. And with the rise of multiple fintech players and digital marketers in the industry, MSMEs must evaluate keenly, not just the rates and processes, but also security, compliance, and ecosystem support.    Here’s a comprehensive guide to help you choose the right bill discounting or invoice discounting platform that aligns with your bus...
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Top Benefits of Registering on a TReDS Platform in India

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Top Benefits of Registering on a TReDS Platform in India Micro, Small, and Medium Enterprises (MSMEs) are the enterprises that mainly form the backbone of India’s economy. However, even when they make a significant contribution to employment and the country’s GDP, they face a constant challenge, which is timely access to working capital. The Trade Receivables Discounting System (TReDS) was introduced by the Reserve Bank of India (RBI) to address this particular issue.  TReDS is an institutional mechanism for financing trade receivables of MSMEs from corporate buyers through invoice discounting. Among the three TReDS platforms that are approved by the RBI, M1xchange, which is set up by Mynd Solutions Pvt Ltd, has emerged as a trusted and efficient digital marketplace for TReDS bill discounting .  So, what are the benefits of registering on a TReDS platform in India? Let’s find out, and let’s also uncover why M1xchange is an ideal choice for MSMEs, buyers, and financiers alike....
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TReDS vs Traditional invoice financing: What’s better for your business?

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  TReDS vs Traditional invoice financing: What’s better for your business? A sustaining business is not just about making sales. It is also about getting paid on time. But as many MSMEs know, payments can take 30,60, even 90 days to come in. This is the reason why many businesses turn to invoice financing. It helps them access money tied up in unpaid invoices. But today, there is more than one way to do it. The traditional route through banks still exists, but there is a faster, more transparent option now - TReDS. Let us break down and help you figure out what works best for your business. What is Traditional Invoice Financing? In the traditional setup, you approach a bank or NBFC with your unpaid invoices. They give you most of the amount in advance, keeping a small portion as a fee. You get the rest once your customer pays. Sounds simple, but there are some drawbacks: You often deal with just one lender The process involves paperwork and follow-up The interest rat...
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Why Bill Discounting Is the Smartest Way to Improve Cash Flow in 2025?

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Why Bill Discounting Is the Smartest Way to Improve Cash Flow in 2025? Imagine running a successful business and providing the best products or services to the customers and accepting lots of profits. All of this sounds really great. But the issue is that most of the targeted customers make the payment in 30 or even 60 days. Meanwhile, businesses have to pay their suppliers and employees and also need to provide money for other variable costs. Even though they look profitable on paper, they might not have enough actual cash in their bank account to cover these expenses. This is the "cash flow struggle" – it's a universal headache for businesses of all sizes. Many profitable businesses have sadly gone under, not because they weren't making any money. The reason behind this is that they ran out of liquid cash that is required for business operations on a daily basis. This is where bill discounting can be useful. Bill discounting is the process where a company sells bil...
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Top 7 Benefits of Factoring Finance for Small and Medium Enterprises

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Top 7 Benefits of Factoring Finance for Small and Medium Enterprises  Businesses need cash to survive, but slow-paying customers can make this hard, especially for small businesses. Factoring finance offers a way to get cash for those invoices quickly. To understand appreciate factoring, it helps to know what is corporate finance . It is the field of finance that is concerned with how businesses optimise shareholder value through capital structure, investment choices, and funding sources.   Factoring is an integral part of this corporate finance. There are various types of factoring, including reverse factorin g , recourse factoring , and non-recourse factoring. Below are the top 7 benefits of factoring finance for micro, small and medium enterprises : 1. Better and Faster Cash Flow Given that their clients take a long time (30, 60, or even 90+ days) to pay invoices, small and medium-sized businesses (SMEs) frequently face difficulties. This leads to a financial issue...
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The Benefits of Factoring Finance for Business Growth and Stability

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  The Benefits of Factoring Finance for Business Growth andStability Consistent cash flow is essential for stability and success in the fast-paced world of business. Waiting 30, 60, or even 90 days for client payments, however, can pose serious challenges that impede plans for growth and have an effect on day-to-day operations of businesses, especially small and medium enterprises. One effective way to turn unpaid bills into instant operating capital is through factoring finance . Before discussing it, it is crucial to know what is corporate finance . The study of how businesses handle capital structure, accounting, investment choices, and funding sources is known as corporate finance. Factoring finance is an integral part of corporate finance. By selling their accounts receivable (unpaid invoices) to a third-party financial institution known as a factor, businesses can obtain quick cash through the financial technique known as factoring. Without having to wait for clients to p...
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