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

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