Trade Receivables Discounting System

Turn an unpaid invoice into cash today.

You raised a buyer-approved invoice and now you're waiting out the credit period. Enter your numbers to see exactly what lands in your account, the true cost, and whether it beats your overdraft.

Collateral-free Cash in T+1 / T+2 Without recourse RBI-regulated
Over ₹7 lakh crore of invoices financed on TReDS — across five RBI-authorised platforms
RXILM1xchangeInvoicemartC2tredsDTX ★
TReDS Calculator
₹rupees
% p.a.
days
60 days
% of invoice
Invoice amount₹10,00,000
Discount charge− ₹13,973
Platform fee− ₹1,000
In your account, within 24–48 hours
₹9,85,027

instead of waiting 60 days — without recourse.

Effective annualised cost9.25%
What is TReDS

An invoice becomes working capital

TReDS is regulated by the Reserve Bank of India (RBI) — an online marketplace where you sell a buyer-approved invoice to banks and NBFCs at a small discount and get paid within a day or two, instead of waiting out the credit period. In short: an invoice becomes working capital, priced on the buyer's credit, not the supplier's.

Collateral-free

Nothing pledged — approval rests on your buyer's strength, not on you.

Cash in T+1 / T+2

Funds hit your account a day or two after you accept a financier's bid.

Without recourse

No liability for you if the buyer later fails to pay. That risk sits with the financier.

The problem it solves

You did the work. Now you wait.

You ship goods, raise an invoice, then wait weeks to be paid — while you still have to buy materials, run the plant and pay wages.

A bank overdraft needs collateral, costs more, and leans on your own credit. The law says buyers must pay within 45 days, but delays are the norm.

TReDS closes the gap: the invoice itself becomes the funding.

30–90 days
you wait to be paid — without TReDS
24–48 hrs
to get paid — with TReDS
Who's involved

Three participants, one platform

Every financed invoice needs all three, registered on the same platform. Here's who does what.

An MSME supplier at work — the sellerThat's you
A corporate, PSU or government buyer
A bank or NBFC financier
Seller

You — the MSME supplier

You upload buyer-approved invoices and take the early payment. Approval rests on your buyer's credit, not yours — and nothing is pledged.

  • Upload the invoice
  • Pick the winning bid
  • Paid in T+1 / T+2
Buyer

Your buyer

A large corporate, PSU / CPSE or government department. They confirm the invoice is genuine and settle the full amount on the original due date.

  • Approves the invoice
  • No cost to enable
  • Settles on the due date
Financier

Banks & NBFCs

Multiple financiers compete in a live auction to discount your invoice and fund the early payment — without recourse, so the default risk is theirs.

  • Bid competitively
  • Lowest rate wins
  • Carry the default risk

Both you and your buyer must be registered on the same platform for an invoice to be financed.

How a transaction works

Six steps, and you're paid at step five

1

Supply & invoice

You deliver goods and raise an invoice on 30–90 day credit.

2

Upload

You upload that invoice to a TReDS platform.

3

Buyer approves

The buyer confirms it's genuine and will pay on the due date.

4

Multiple banks bid

Banks & NBFCs compete — the lowest discount rate wins.

5

You pick & get paid

You select the best rate; the financier pays you at once, less the discount (T+1 / T+2).

6

Buyer settles

On the due date the buyer pays the full invoice to the financier.

You're already paid at step 5 — and carry no liability if the buyer defaults.
Why it works — and why it's safe

You borrow at your buyer's strength

Why banks are comfortable

The financing decision rests mainly on your buyer's creditworthiness — not on yours. So even a small supplier gets funded, at the strength and rate of a large buyer.

Why it's safe for you

It is without recourse: if the buyer defaults later, that's the financier's risk. Their exposure is to the buyer; you keep the cash, with no repayment obligation.

Good to know

TReDS covers domestic trade — it works when your buyer is Indian. Export invoices aren't included yet.

What you gain as an MSME

Why sellers use it

Fast cash

A 60-day receivable becomes cash in T+1 / T+2.

Collateral-free

No property, security or personal guarantee.

Without recourse

No liability if the buyer later defaults.

Buyer's-credit pricing

Borrow at your blue-chip buyer's rate — far cheaper.

Competitive bidding

Many financiers compete; you pick the best rate.

Off the balance sheet

It's a sale of receivables, not a loan, so leverage ratios stay clean.

Healthier buyer relations

You stop chasing dues, and payment discipline improves across the chain.

Fast cash

A 60-day receivable becomes cash in T+1 / T+2.

Collateral-free

No property, security or personal guarantee.

Without recourse

No liability if the buyer later defaults.

Buyer's-credit pricing

Borrow at your blue-chip buyer's rate — far cheaper.

Competitive bidding

Many financiers compete; you pick the best rate.

Off the balance sheet

It's a sale of receivables, not a loan, so leverage ratios stay clean.

Healthier buyer relations

You stop chasing dues, and payment discipline improves across the chain.

It isn't only you who gains

Why buyers and financiers take part

TReDS keeps growing because all three sides win — which is what makes the financing reliably available to you.

For the buyer

  • Keeps its supply chain liquid and its vendors solvent.
  • Meets the MSME 45-day payment rule and the TReDS onboarding mandate.
  • Can negotiate better terms in exchange for prompt, digital settlement.

For the financier

  • Access to short-tenor, self-liquidating assets backed by strong buyers.
  • Low risk: financing rests on the buyer's credit, not the small supplier's.
  • Steady, RBI-regulated deal flow that helps meet priority-sector / MSME lending targets.
First — is your buyer on TReDS?

It only works if your buyer approves

TReDS only works if your buyer is registered on it and approves your invoice. Not every buyer is on TReDS — confirm your buyer will accept invoices on it before you count on the financing.

Few PSU buyers on TReDS
NTPC
Indian Oil
BPCL
ONGC
Power Grid
HAL
Engineers India
SAIL
GAIL
HPCL
Coal India
BHEL
BEL
NHPC
CONCOR
NMDC
Check your eligibility

Quick fit check

Three quick questions to see whether your invoice can be financed on TReDS.

Are you a registered MSME (Udyam)?
Is your buyer a large corporate, PSU or CPSE?
Will your buyer approve invoices on a TReDS platform?
Answer all three to see whether TReDS fits your invoice.
Getting started

What you need, and what happens next

To register

  • Udyam (MSME) registration
  • GST certificate + PAN
  • KYC of the authorised signatory
  • Board resolution / authorisation letter

Then, for every invoice

  • Register on the platform your buyer is on
  • Upload the buyer-approved invoice
  • Financiers bid — you accept the best rate
  • Cash reaches you in T+1 / T+2
The rules — and the latest moves

Where the policy is heading

The 2026 Master Direction is pulling TReDS into the mainstream of MSME finance — wider mandates, credit-guarantee cover, and simpler onboarding.

New · 2026 Effective 30 June 2026

RBI TReDS Master Direction, 2026

All operational central PSEs must now route MSME invoice settlements through an RBI-authorised TReDS platform. Onboarding is simpler — the mandatory seller due-diligence step is gone, financiers can take credit-guarantee cover, and insurance premiums can't be charged to you. It isn't compulsory discounting: take early financing, or let the invoice settle on its due date.

Read it on rbi.org.in Download PDF
  • Who must joinCompanies with turnover above ₹250 crore and all Central Public Sector Enterprises (CPSEs) must onboard a TReDS platform.
  • CGTMSE guaranteeInvoice discounting is being brought under CGTMSE credit-guarantee cover — lower risk for lenders, better rates for MSMEs.
  • GeM–TReDS integrationThe Government e-Marketplace is being linked to TReDS, giving financiers real-time visibility of government purchases.
  • Statutory-auditor sign-offCPSEs routing MSME settlements through TReDS must have their statutory auditors certify compliance each year.
The platforms

Pick the one your buyer is already on

Five RBI-authorised operators. MSME counts are approximate. An invoice can be financed only if both you and your buyer are registered on the same platform.

PlatformBackingMSMEsGood to know
RXILSIDBI & NSE44,000+Largest by volume; strong for PSU / CPSE buyers.
M1xchangeMynd Solutions50,000+Zero MSME registration fee; technology-led, deep-tier financing; GeM integration.
InvoicemartA.TReDS — Axis & mjunction28,000+User-friendly; broad corporate & financier base.
C2tredsC2FO Factoring89,000+Global working-capital-finance network; ERP integrations.
DTX newestKredX—Fifth operator; final RBI nod in 2025; rolling out.

Rates are set by live auction — roughly 8–18% p.a., driven by your buyer's credit, not a flat fee.

Government resources

Official portals worth bookmarking

Direct links to the RBI and Government of India portals behind TReDS and MSME finance. Swipe for more.

Swipe for more resources

External government & regulator sites — opened in a new tab. We link to them for reference only and don't reproduce their content.

FAQ

Frequently asked questions

TReDS — the Trade Receivables Discounting System — is an RBI-regulated online marketplace where an MSME seller sells a buyer-approved invoice to banks and NBFCs at a small discount and is paid within a day or two, instead of waiting out the credit period. An invoice becomes working capital, priced on the buyer's credit, not yours.

Once you accept the winning bid, funds reach your account in T+1 / T+2 — a day or two. Nothing is pledged: it's collateral-free and without recourse, so if the buyer defaults later, that's the financier's risk, not yours.

You pay a discount at the winning bid rate — set by live auction, typically 8–18% p.a. depending on your buyer's credit — plus any platform fee (many charge sellers ₹0). The number that matters is the effective annualised cost; use the calculator above to compare it against your overdraft or cash-credit rate.

Your buyer must be registered on the same platform and must approve the invoice. Financing rests on the buyer's credit, so large corporates, PSUs and CPSEs work best — and companies with turnover above ₹250 crore plus all CPSEs are required to onboard. Confirm your buyer's platform before you count on the financing.

Pick the one your buyer is already on — that's the only way an invoice gets financed. There are five RBI-authorised operators: RXIL, M1xchange, Invoicemart, C2treds and DTX (KredX). See the platforms table above for what each is good at.

The RBI's TReDS Master Direction, 2026 made onboarding simpler for sellers — the mandatory due-diligence step is gone, financiers can take CGTMSE credit-guarantee cover, and insurance premiums can't be charged to you. From 30 June 2026, all operational central PSEs must route MSME invoice settlements through a TReDS platform. Download the Master Direction (PDF).

Discount = Invoice × Rate% × Days ÷ 365 Platform = Invoice × Fee% Cost = Discount + Platform Net = Invoice − Cost Eff. cost = Cost ÷ Net × 365 ÷ Days × 100

The live bid rate depends on the buyer's rating and market appetite, so treat the rate as an estimate. Fee structures differ by platform and by who bears them. TReDS covers domestic receivables only — export invoices aren't included yet. Always confirm the day-count and the actual bid before relying on the number.

What to do next

Put a TReDS invoice through this week

1

Check whether your key buyers are already on a TReDS platform — or can onboard.

2

Register with Udyam, GST, PAN and KYC. It's collateral-free and without recourse.

3

Upload approved invoices, let financiers bid, and take the best rate.

4

Every time, compare the effective annualised cost against your overdraft — using the calculator.

Run your numbers Learn how it works