Purchase invoice Discounting
Purchase invoice Discounting
Purchase Invoice Discounting is a short-term working capital facility that enables businesses to pay their suppliers upfront without using their own funds. The financer pays the supplier immediately by discounting the purchase invoice, while the buyer repays the amount at a later agreed date.
Built For:
- Small and medium businesses with active vendor relationships
- Buyers looking to optimise supplier payment terms
- Enterprises facing seasonal or fluctuating liquidity cycles
How does Purchase Invoice Discounting Work?
Unlock immediate funds by discounting your purchase invoices before their due date.
Bill Discounting by Bunny Bucks is a process guided by RBI to regulate the trade receivables between Corporates, MSMEs and Financiers. Watch the complete video to understand how bill discounting works for all the stakeholders on the TReDS platform.
STEP 1
Buyer procures goods/services and receives an invoice from the supplier
STEP 2
Buyer requests finance for the invoice from Ratnaafin
STEP 3
Financer disburses funds to the supplier on Day 0 (after deducting applicable interest)
STEP 4
On the invoice due date (usance), the buyer repays the financer
Participants
- Borrower: Buyer
- Financer: Ratnaafin
- Supplier: Receives payment (no credit exposure)
Key Benefits
01
For Buyers
- Avail working capital credit without collateral
- Improve supplier relationships through early payments
- Gain cash discounts from vendors for prompt payments
- Manage liquidity more effectively during high-demand periods
- No need to route funds through suppliers – only invoice acceptance required
01
For Suppliers
- Receive instant payment on invoices
- Strengthen long-term buyer relationships
- Improve their own working capital position
Purchase invoice Discounting
Purchase Invoice Discounting is a short-term working capital facility that enables businesses to pay their suppliers upfront without using their own funds. The financer pays the supplier immediately by discounting the purchase invoice, while the buyer repays the amount at a later agreed date.
Documents Required
- KYC documents (PAN, GST, business registration)
- Last 3 years of audited financial statements
- 1 year of bank statements and GST returns
- Sanction letters from existing credit facilities (if any)
- Supplier invoice copy
Eligibility Criteria
- Buyers with valid purchase invoices and business operations
- MSMEs seeking short-term working capital support
- Businesses needing seasonal or cyclical credit
Interest Rate and Charges
Know the applicable interest rates and all associated charges before you apply.
Built For:
| Feature | Detail |
|---|---|
| Interest Rate | Competitive and flexible, based on buyer credit profile |
| Usance Period | Typically 30–90 days |
| Interest Payment | Interest deducted upfront or paid as per arrangement |
| Charges | Transparent processing fees |
| Collateral | Not required |
| Hidden Charges | None |
Glossary
Ans. The discounting process on TReDS platforms in India, such as Bunny Bucks TReDS, works as follows:
- Buyer: The business procuring goods/services and repaying Ratnaafin later
- Supplier: The vendor delivering goods and receiving upfront payment
- Purchase Invoice Discounting: Financing based on a supplier invoice to enable early payment
- Usance Period: The credit period until the buyer repays Ratnaafin (30–90 days)
- Collateral-Free: No assets required to secure the loan
- Interest Deduction: Interest may be subtracted from the upfront amount or paid later
- Working Capital: Funds required for daily operations, improved here through supplier financing
Faq’s
Frequently Asked Questions
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Q1. How does Bill Discounting work?
Bill Discounting is a process where a supplier sells an invoice, raised against a buyer to a financier before the due date to access early payment. On the TReDS Platform, like Bunny Bucks invoice is uploaded digitally and once the buyer accepts the invoice, financiers then bid to discount the invoice, and the supplier receives funds immediately at a discounted rate. The financier later collects the full invoice amount from the buyer on the due date.
Bill Discounting on Bunny Bucks streamlines this process using a secure, transparent digital platform regulated by RBI, making it highly efficient for MSMEs and large corporates.
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Q2. What are the benefits of Bill Discounting?
Bill Discounting helps businesses unlock working capital tied up in receivables. Through the Bunny Bucks TReDS Platform, Bill Discounting enables MSMEs to access instant liquidity without collateral. It reduces dependency on traditional credit, shortens the cash cycle, and supports steady operations. For buyers, it improves supply chain reliability and vendor satisfaction.
The digital nature of Bunny Bucks’s TReDS platform also ensures faster processing, competitive financing rates, and complete transparency for all participants in the transaction.
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Q3. Who can use Bill Discounting?
Bill Discounting on the TReDS Platform is designed for MSME suppliers, large corporate buyers, PSUs, and government departments. Suppliers use it to receive early payments, buyers gain extended credit periods, and financiers earn interest from discounted invoices.
Bill Discounting on Bunny Bucks caters to all these stakeholders by providing a secure, paperless ecosystem for invoice financing. MSMEs benefit from collateral-free funding, while buyers and financiers engage in structured, RBI-regulated transactions. Whether you're a growing business or a large corporation, TReDS offers a reliable solution for managing cash flow efficiently.