TReDS vs Traditional invoice financing: What’s better for your business?
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...