Why TReDS
Why TReDS?
TReDS offers numerous benefits to MSMEs, making it an attractive financing option. Here are some reasons why TReDS, specifically Bunny Bucks TReDS, is a preferred choice:
Reduced Bad Debts: TReDS minimizes the risk of bad debts, as the platform verifies the authenticity of invoices and ensures timely payment.
Improved Cash Flow: TReDS enables MSMEs to receive immediate payment against their invoices, improving their cash flow and reducing liquidity challenges.
Increased Efficiency: TReDS provides a digital marketplace for MSMEs to sell their invoices, reducing the need for physical documentation and increasing efficiency.
Easy Access to Financing: TReDS provides MSMEs with easy access to financing, helping them to overcome financial constraints and achieve business growth.
Transparent and Secure: TReDS ensures transparent and secure transactions, providing MSMEs with a reliable and trustworthy financing option.
To access Bunny Bucks TReDS, MSMEs can register online through the M1 TReDS portal, complete the TReDS registration process, and log in to the platform. With Bunny Bucks TReDS, MSMEs can unlock the potential of their trade receivables and achieve financial stability.
Business Transactions Boosted
In the process of bill discounting, MSMEs (Supplier) can upload their invoices on any Trade Receivable Exchange of their choice. The invoice is then verified and approved by the Corporate (Buyer). After the invoice is approved, the Financiers (NBFC/Banks) bid against the uploaded invoice. This unique bidding mechanism gives the supplier an option to select the most suitable bid. The exchange calculates the final transaction amount and funds get transferred from Financier's bank account to the Supplier’s account. The amount is later paid to the financier by the buyer on the mutually agreed terms. Since TReDS works in a digital ecosystem, the registration process involves one-time documentation only. All the data is stored in a secure digital format, thus the discounting process involves no paperwork on Bunny Bucks.
Coming to the overall benefit of this system. Suppliers enjoy collateral-free without recourse financing at a rate much lower than a bank loan. The corporate buyers, on the other hand, get an extension on days payable helping them better manage their working capital. Since the corporates are enabling their MSME supplier to get paid in a matter of a few days, they are in a comfortable position to negotiate on the overall cost of procurement. Financiers can build quality PSL Asset portfolio in MSME space with reduced risk of default.
TReDS
Why Bunny Bucks TReDS?
Faq’s
Frequently Asked Questions
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Q1. What is TReDS?
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Q2. How does TReDS benefit MSMEs?
- Ans. TReDS, especially platforms like Bunny Bucks TReDS, offers significant benefits to MSMEs:
Improved Cash Flow:
By discounting their unpaid invoices on the TReDS platform, MSMEs can access immediate cash, easing their working capital constraints.Faster Payment Cycles:
TReDS streamlines the payment process, reducing the time it takes for MSMEs to receive payments from their buyers.Reduced Financing Costs:
TReDS often offers more affordable financing options compared to traditional lending sources, helping MSMEs save on interest costs.Enhanced Financial Discipline:
TReDS encourages timely payments by buyers, promoting financial discipline and transparency in the supply chain.Access to a Wider Market:
TReDS platforms in India like Bunny Bucks connect MSMEs with a larger pool of financiers, increasing their access to credit and growth opportunities.- By utilising TReDS, MSMEs can overcome financial challenges, grow their businesses, and contribute to the overall economic growth of the country.
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Q3. Who can use TReDS?
- Ans. TReDS is designed to benefit a wide range of businesses, particularly MSMEs. Here's who can use TReDS:
MSME Sellers:
Businesses that sell goods or services on credit can use TReDS to accelerate their payment cycles by discounting their unpaid invoices.Large Corporates:
Large corporates can leverage TReDS to streamline their payment processes, improve supplier relationships, and enhance their financial efficiency.Financial Institutions:
Banks and NBFCs can use TReDS to acquire high-quality loan assets and expand their lending portfolios.- To use TReDS, businesses need to register on a TReDS platform like M1xchange TReDS. Once registered, they can log in to their account and start using the platform's various features.
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Q4. What are the requirements for registration on TReDS?
Ans. To register on TReDS platforms in India, such as M1xchange TReDS, businesses must meet specific eligibility criteria. MSMEs, corporate buyers, and financiers can initiate their TReDS registration online by providing valid business documents, PAN, GST registration, and bank account details. Through the TReDS portal, users can complete the process with a secure TReDS login. Once verified, they can access the TReDS platform to upload invoices, approve payments, or bid for discounting. The seamless TReDS registration ensures businesses can efficiently manage trade receivables and enhance liquidity.
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Q5. What is the process of invoice discounting on TReDS?
- 1. Ans. Invoice discounting on TReDS platforms in India, like M1xchange TReDS, is a seamless digital process.
- TReDS Registration Online: MSMEs, corporate buyers, and financiers register on the TReDS portal using valid business documents.
- Invoice Upload: MSMEs log in via their TReDS login and upload invoices for delivered goods or services.
- Invoice Approval: Corporate buyers verify and approve the invoices on the TReDS platform.
- Bidding by Financiers: Multiple financiers bid to offer competitive discounting rates.
- Payment to MSME: The MSME selects the best bid and receives upfront payment for the invoice.
- Settlement by Buyer: On the invoice's due date, the corporate buyer pays the full invoice amount to the financier.