Written by

Boosting MSME Growth with CashFlo’s TReDS Solution

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in economic growth but often struggle with cash flow due to delayed payments. The Trade Receivables Discounting System (TReDS) is an RBI-regulated digital platform that addresses this challenge by enabling MSMEs to convert outstanding invoices into immediate working capital.

How Does TReDS Work?

MSME Suppliers Upload Invoices: MSMEs upload unpaid, GST-compliant invoices on the TReDS platform for buyer approval.
Corporate Buyers Approve Invoices: Buyers verify and approve invoices, ensuring authenticity and enabling financing.
Financiers Bid for Invoice Discounting: Banks and NBFCs compete to offer the best discount rates, reducing MSME financing costs.
MSMEs Receive Funds in 24 Hours: The selected financier disburses funds within 24 hours, while buyers get extended credit periods.

Why Do MSMEs Struggle with Payment Delays?

1. Dependence on Traditional Financing with High Interest Rates

Many MSMEs rely on bank loans, overdrafts, or informal credit sources, which often come with high interest rates and strict eligibility criteria.
The cost of borrowing increases financial strain, making it difficult for MSMEs to manage day-to-day operations.

2. Long Credit Cycles Affect Cash Flow

Buyers often demand long payment terms—sometimes 60 to 90 days—causing liquidity issues. With CashFlo’s TReDS solution, MSMEs can access faster payments and bridge these gaps.
This delay in receivables creates liquidity gaps, restricting MSMEs from paying suppliers, purchasing inventory, or investing in business growth.

3. Unpredictable Payment Schedules from Large Buyers

Even with agreed credit terms, payments are often delayed due to buyer cash flow issues or administrative inefficiencies.
These irregularities make it difficult for MSMEs to plan their finances, leading to missed opportunities and operational disruptions.

The Impact of Faster Invoice Discounting

1. Enables MSMEs to Reinvest in Business Growth

Quick access to funds allows MSMEs to allocate capital towards inventory, expansion, and operational improvements.
Instead of waiting for long payment cycles, businesses can seize new opportunities, fulfill larger orders, and improve productivity.‍

2. Reduces Dependency on High-Cost Loans

Faster invoice discounting provides an affordable alternative to bank loans and informal credit, which often have high interest rates.
By accessing funds directly from receivables, MSMEs avoid debt burdens and maintain financial stability.‍

3. Strengthens Buyer-Supplier Relationships by Ensuring Liquidity

Timely payments improve cash flow for suppliers, allowing them to maintain a steady supply chain.
Buyers benefit by extending their payables without negatively impacting supplier operations, fostering long-term business relationships.

How CashFlo Enhances TReDS for MSME Growth

CashFlo, India’s leading supply chain finance marketplace, enhances TReDS by offering a seamless, tech-driven approach to invoice discounting:

Instant Access to Working Capital

MSMEs receive payments within 24 hours, ensuring smooth operations.
Buyers can extend payables up to 180 days without impacting supplier cash flow.

AI-Driven Risk Assessment

Advanced analytics match MSMEs with the best financing options.
Ensures competitive bidding from financiers, lowering costs.

Multiple Financing Options

MSMEs can access funds from banks, NBFCs, TReDS platforms, or internal treasury lines.
Guaranteed cost savings with a built-in 2% subvention on early payment rates.

Who Can Benefit from CashFlo’s TReDS Solution?

MSMEs Facing Payment Delays

Small and medium businesses often struggle with late payments, impacting their cash flow.
With CashFlo’s TReDS solution, MSMEs can convert unpaid invoices into immediate liquidity, reducing their reliance on expensive short-term loans.

Large Enterprises

Corporates can ensure their suppliers receive timely payments without straining their own cash reserves.
The platform allows them to extend their credit cycles while maintaining strong supplier relationships and compliance with MSME payment regulations.

Financial Institutions

Banks, NBFCs, and other financiers can access a pool of verified MSME invoices, providing them with secure and risk-assessed investment opportunities.
Competitive bidding ensures attractive returns while supporting MSME financing needs.

Why Choose CashFlo for MSME Financing?

Proven Industry Expertise

CashFlo has established itself as a leader in MSME financing, with over 1,500 enterprises onboarded.
The platform supports 300,000+ suppliers, ensuring widespread access to working capital.
With over ₹24,000 crore worth of invoices processed, CashFlo brings deep expertise in invoice discounting and supply chain financing.

Secure & Compliant Digital Platform

CashFlo operates under RBI regulations, ensuring complete compliance with MSME mandates.
Its AI-powered risk assessment mechanism enhances transaction security and minimizes financial risks for businesses and financiers.

Dedicated Vendor Engagement & Support

CashFlo’s dedicated PMO team drives seamless supplier onboarding, ensuring every vendor can access financing.
Enterprises benefit from structured vendor engagement, enabling smoother transactions and stronger supplier relationships.

Conclusion

CashFlo’s TReDS solution is a game-changer for MSMEs, offering instant liquidity, reduced financing costs, and improved financial stability. By addressing challenges like delayed payments, long credit cycles, and high borrowing costs, CashFlo empowers businesses to reinvest in growth without financial strain. Large enterprises benefit from extended credit periods while ensuring timely supplier payments, and financial institutions gain secure investment opportunities. With its proven expertise, RBI-compliant platform, and AI-driven risk assessment, CashFlo is revolutionizing MSME financing in India. For businesses looking to enhance cash flow and strengthen their financial ecosystem, CashFlo provides the ideal digital-first solution.