Bill Discounting
What is Bill Discounting?
Bill Discounting is a short-term financing solution that allows businesses to convert their unpaid invoices into immediate working capital. In this process, a supplier sells their invoice or bill raised against a buyer to a financier (such as a bank or NBFC) at a discounted value before the payment due date. The financier pays the supplier upfront, and in return, collects the invoice amount from the buyer on the due date. This mechanism improves cash flow, reduces working capital cycles, and supports uninterrupted business operations.
Bunny Bucks Bill Discounting offers this solution digitally through the TReDS platform, an RBI-licensed digital marketplace that facilitates transparent and secure invoice discounting for MSMEs, large corporates, and financiers. TReDS (Trade Receivables Discounting System) enables MSMEs to access timely funds without pledging collateral, helping them meet operational needs and scale faster.
On the Bunny Bucks TReDS Platform, bill discounting is executed in a seamless and paperless manner, where buyers, sellers, and financiers interact on a single platform. With RBI regulated guidelines and competitive bidding, MSMEs get the best possible financing terms, while buyers and financiers benefit from improved vendor relationships and credit assessment data.
Bill Discounting on Bunny Bucks is a key enabler of liquidity and financial inclusion across supply chains, especially for MSMEs operating in India’s diverse economic landscape.
MSME Cash Flow Challenges
Solved by TReDS Bill Discounting
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.
01.
STEP 1
MSMEs invoice large corporates/PSUs for goods and services. Credit periods varies, allowing payment settlement within negotiated timeframe, spanning days to weeks
02.
STEP 2
To avoid the delays and reduce the risk in collections, they can bring theirinvoices for discounting on Mlxchange TReDS and manage cash flow smoothly
03.
STEP 3
These invoices are converted into cash within 24 hours and transferred to MSMEs account at a very cost effective discounting rate
04.
STEP 4
On the due date, the corporate buyer settles the full invoice amount to the financier through the Mlxchange TReDS platform.
Features of Bill Discounting
Bill discounting can be a great way to help manage cash flow and get ahead on bills, but there are some essential features to look out for when choosing a bill discounting service. Here are some of the most important ones:
- Bill discounting is a short-term lending product that allows you to pay off your bills in advance.
- You can use this service to discount your bills and have better cashflow
- The benefit of paying off your bills early is that you will save money on interest rates and prevent late fees from accruing.
Advantages of Bill Discounting
Bill discounting is advantageous to businesses, banks, finance companies, and investors. Businesses benefit by rejuvenating their cash-flow in-turn helping them stabilize growth and fund business expenditure.
01.
No impact on the balance sheet
Bill discounting service offered by Bunny Bucks does not impact the balance sheet of the business as it is an off-the-book process.
02.
Instant access to cash
Bill discounting is a more efficient, faster way of assessing working capital as it is hassle-free and does not involve the lengthy documentation procedure. With Bunny Bucks, businesses can secure financial assistance within 24 hours.
03.
Cash flow
Businesses being dependent on the cash flow to sustain their business can easily rely on this quick financial aid to access speedy funds and continue to flourish. This process quickens money inflow— profiting the organization in expanding deals, seeking after development, securing hardware, etc.
04.
No debt incurred
Bill discounting helps in saving tax liability. The chances of a company suffering any loss or damage are almost nonexistent when compared to conventional financing frameworks.
04.
No collateral involved on TReDS
here is no requirement to keep any asset as security as the unpaid invoice is considered as the collateral itself.
Business loan
- Collateral required
- Long processing period
- Availed for long-term financial assistance
- Lengthy documentation process
- Stringent eligibility requirements
- Impacts the business balance sheet and is considered as a debt
Bill Discounting
- Collateral-free finance
- Quick processing (Usually in a couple of days)
- Availed for short-term financial aid
- Digital process
- Hassle-free documentation process
- Simple eligibility criteria
- No impact on the business balance sheet
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.