How can MSMEs boost their Cash flows with Invoice financing?

Small and Medium enterprises, constantly, struggle with managing stable cash flow and maintaining cash reserves for emergency needs. The funds that they have to receive, often, get stuck in unpaid invoices and delayed payments – and this obviously impacts their day-to-day business operations. Traditional lending options that need collateral and supporting documentation are not of a quick help either. While Govt schemes like Pradhan Mantri Mudra Yojana (PMMY) for small businesses are a fantastic option, these could be receiving many applications. In recent years, a new financing option is becoming more a viable solution – Invoice Financing.  Let’s see what is Invoice financing, why it is growing, how would it benefit small businesses and how one can access Invoicing financing from ProFinTech.

What is Invoice Financing?

Invoice financing is a credit facility that allows small businesses to borrow money using their unpaid invoices as collateral. It is a short-term borrowing and also is known as ‘Accounts receivable financing’. Instead of waiting for customers to pay their invoices, small businesses can get immediate cash flow by selling their unpaid invoices to a financial institution, at a discount. This way, they can get cash for their daily business requirements like purchasing raw materials, repaying dues, paying salaries to their employees, and more.

Why is Invoice Financing growing in India ?

It is growing because of a combination of factors :

What are big benefits of Invoice Financing? 

For small businesses, Invoice financing is a lot more beneficial than bank credit.  Lets see how –

1. Improved Cash flow : Invoice financing converts unpaid invoices into immediate cash flow. Business owners can access these funds within days, and can use them for their financial emergencies like operational expenses, purchasing raw materials  and others.

2. No Fixed Assets :  Businesses need not provide assets as security for the loan with invoice financing. It is flexible and can be used as a short-term solution. 

3. Better financial operations : As invoice financing facilitates the necessary liquidity, business operations can be continued smoothly without cash flow gaps. This is particularly very useful for businesses with long billing cycles.  

4. Stronger and more Positive Supplier relationships : SMEs and businesses depend on a network of suppliers for raw materials, components and packaging etc. Prompt payments to their suppliers can strengthen relationships, trust and collaborations within the supply chain network. 

How can a small business enterprise receive invoice financing from ProFinTech?

At ProFinTech, we are committed to unlocking the potential of MSMEs through transformative financial solutions. We address the challenge of delayed payments that many small businesses face, regularly. Through our Invoice financing, we help businesses convert their sales invoices into immediate cash. This financial solution helps stabilize cash flows and accelerate operations. And, it also allows businesses to manage daily affairs without the typical wait for payment clearances.

By providing quick access to funds, we help businesses create a virtuous cycle of growth. They can rapidly reinvest their unlocked capital into their operations, driving expansion or increasing economic activity. Therefore, we not only supply quick funds but also empower businesses to achieve self-sustained growth.

What should one do to receive Invoice financing from ProFinTech?

The process actually is very simple with 5 steps as given below (see the diagram also) :

1. Every MSME needs to join our Credit Bazaar platform – We don’t need any documents, bank statements and balance sheets, at this point. Join Credit Bazaar Platform.
2. Every MSME needs to share his/her receivable invoices with us –  We will process them and share our offer with the MSME in 2 days. 
3. Every MSME can track the progress of his/her request on Credit Bazaar platform.
4. Our funding offer will reach every MSME in 2 days – They will receive funding offers from Banks/NBFCs on Credit Bazaar platform in 2 days.
5. Every MSME can choose one of the 2-3 funding offers that they received – The MSME can evaluate each funding offer & its terms and conditions etc and choose the one that works for them better.

This is how we keep every small business, every MSME, running Non-stop! 

(yes, we do a quick check of the business’s revenue and operational history, and legal & tax compliance.  This is just to protect both lenders and borrowers.)

If you are a business owner facing cash flow problems, regularly, you should consider invoice financing as an option and get a quick funding through your receivable invoices and grow your business.

Connect with us info@profintech.in to know more about our invoice financing and how to join our Credit Bazaar platform. 
Credit :  Sandeep’s LinkedIn post , Jyothsna, ChatGPT