Purchase Bill Discounting

Welcome to a great way of managing your working capital gap and getting the best deals from your suppliers. Now you can discount your suppliers’ bills immediately and offer payment within a day or two. This helps you bargain for a better pricing and commercial terms. SME MaXX has tied up with reputed financial institutions that offer this innovative facility.

Purchase bill discounting is a cash-flow acceleration tool, which can be structured as per the requirements of your customers/ dealers.

How does it work?

Purchase bill discounting is simple and efficient. The following diagram depicts the way your seller can receive payments within a couple of days of the sale.

Benefits of this facility:

  • It is a steady, hassle-free and cheaper source of working capital financing

  • Optimisation of working capital cycle

  • Extended credit facility increases purchasing power

  • Faster payments leading to better commercial terms from Seller

  • Simplified documentation and approval procedures

Eligibility Criteria:

  • Any proprietorship/ Partnership/ Private Limited Companies and Public Limited Companies

  • Company Turnover of Rs 100 Crores and above

  • Company must be in business for 5 years

  • Credit Rating should be of Stable grade

  • Preferred sectors – Pharma, FMCG, Manufacturing and trading concerns

  • This facility is currently available only to companies in southern and western India

The following is the process flow:

Sales Bill Discounting

SMEs' financial health depends greatly upon the swift realisation of receivables. Many financial institutions have come up with various schemes to ease the receivable problems of SME sector and enhance their liquidity.

 

The discounting of Sales Bills facility offers financing by discounting vendors' sales bills. It helps lessen the problem of late payments to SMEs as regard to their credit sales by making available to them, finance against bills of exchange or invoices as a result of such sales.

This arrangement covers the discounting of bills arising from sale of original accessories/ components/intermediates by a unit of SME.

 

Limits are authorized to:

 

  • Small and medium enterprises (SMEs) engaged in manufacturing or job works that has to do with sales of components to large and medium scale Units.

  • Big organizations acquiring raw materials from SMEs. These sales bills /invoices are discounted by financial institutions/ banks within the sanctioned limit and payment effected to the working capital account of the SME supplier/ service provider. On the due date, the Purchaser makes payment to lender. These limits are renewed yearly.

           

Advantages of this financing solution are:

 

  • Fast receivables realisation into cash

  • Helps build solid relationships with channel partners and vendors

  • Assures working capital finance at competitive credit cost

  • Through higher purchasing ability, it enhances sales

  • Leads to cash discount from vendors

  • Efficient management of cash

  • Faster Turn Around Time (TAT) and easy procedures

It take less than a minute to apply!
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