TReDS (Trade Receivables Discounting System) is an RBI-regulated digital platform that facilitates the financing of trade receivables of Micro, Small and Medium Enterprises (MSMEs) from corporate buyers through invoice discounting. It brings together MSME sellers, large corporate buyers, and financiers on a single electronic platform to enable seamless, transparent, and efficient invoice financing.
TReDS Platforms in India, such as M1xchange, offer a safe and secure ecosystem where approved invoices are uploaded and financiers bid to offer the best possible discounting rates. The seller receives early payment, while the financier collects the invoice amount from the buyer on the due date.
With TReDS Online, the entire process, from invoice upload to fund disbursement is paperless and fast. TReDS Registration is mandatory for companies over 250cr turnover. Through Online TReDS Registration, businesses can onboard quickly and start benefiting from early payments and improved cash flows.
The TReDS Platform plays a critical role in strengthening India’s MSME ecosystem by unlocking working capital and fostering financial inclusion.
TReDS is an innovative online platform that enables MSMEs to receive quick and easy financing against their trade receivables. TReDS platforms in India, such as M1xchange TReDS, provide a digital marketplace for MSMEs to sell their invoices to corporates and banks at a discounted rate.
To access TReDS, users can register online through the TReDS portal, complete the TReDS registration process, and log in to the platform. This online platform facilitates the discounting of invoices, helping MSMEs overcome liquidity challenges and achieve better financial stability.
Easy access to fund
No paperwork
Single platform for Sellers, Buyers, and Financiers
Transact online
Competitive discounting rates
Seamless data flow
The Reserve Bank of India granted approval to Mynd Solutions Pvt Limited to set up and operate M1xchange, the first trade receivable exchange in India. M1xchange has digitally transformed the process of gaining access to working capital for MSMEs via invoice discounting through multiple financiers. TReDS is an answer to the everlasting cash flow issues of the MSMEs in India and effective solution to drive the MSME sector to the next phase of Indian economy.
“The Department of Micro, Small and Medium Enterprises issued a notification stating that all companies registered under Companies Act and having a turnover of more than INR 250 crores and all Central Public Sector Enterprises are required to on board a TReDS platform, thus making TReDS registration mandatory for such companies. The Registrar of Companies (RoC) in every state has been nominated to be the competent authority to monitor the compliance of this notification.”
MSMEs get greater access to finance, at competitive rates without providing any additional collateral. Also, the financing is without recourse to the MSMEs.
Corporates save on procurement cost through an improved negotiation of financing term for its vendors.
Financiers get an opportunity to build PSL asset portfolio on Trade Receivable Exchange platforms like M1xchange.
On November 2, 2018 the Department of Micro, Small and Medium Enterprises issued a notification stating that all companies registered under Companies Act and having a turnover of more than INR 500 crores and all Central Public Sector Enterprises are required to on board a TReDS platform, thus making TReDS registration mandatory for such companies. The Registrar of Companies (RoC) in every state has been nominated to be the competent authority to monitor the compliance of this notification.
MSMEs get greater access to finance, at competitive rates without providing any additional collateral. Also, the financing is without recourse to the MSMEs.
Corporates save on procurement cost through an improved negotiation of financing term for its vendors.
Financiers get an opportunity to build PSL asset portfolio on Trade Receivable Exchange platforms like M1xchange.
STEP 1
Submit KYC details - one time
STEP 2
Sign agreement - one time
STEP 3
Financiers assign limits -
unsecured
STEP 4
Ready for transaction!
STEP 1X10
Submit KYC details -
once for every bank
STEP 2X10
Sign agreement - once
for every bank
STEP 3X10
Financiers assign limits -
may be secured
STEP 4
Ready for transaction!
TReDS (Trade Receivables Discounting System) is an RBI-regulated electronic platform in India that enables MSMEs to get quick working capital by discounting their invoices raised on large corporates and government buyers.
On a TReDS platform, an MSME uploads an approved invoice. Multiple financiers bid to discount the invoice, and the MSME receives funds at competitive rates. The buyer makes payment directly to the financier on the due date.
TReDS platforms are regulated by the Reserve Bank of India (RBI) under the Payment and Settlement Systems Act, 2007.
Invoice discounting on TReDS allows MSMEs to convert their approved invoices into instant cash by selling them to banks and NBFCs at a discounted rate.
Key benefits of TReDS include:
The following entities can register on TReDS:
TReDS registration is not mandatory for MSMEs, but it is highly recommended to improve liquidity and reduce payment delays.
As per RBI and government guidelines, certain large corporates and CPSEs are required to register on a TReDS platform to facilitate MSME financing.
Common documents include:
Once an invoice is approved by the buyer, MSMEs can receive funds within 24–72 hours, depending on the bidding process.
Interest rates on TReDS are market-driven and decided through competitive bidding by multiple financiers, often lower than traditional MSME loans.
Most TReDS platforms charge minimal or zero registration fees for MSMEs. Discounting charges depend on the financier’s bid.
No, TReDS is not a loan. It is a receivable financing mechanism, where invoices are discounted without creating debt on the MSME’s balance sheet.
No collateral or personal guarantee is required for invoice discounting on TReDS.
Yes. TReDS platforms are RBI-regulated and follow strict KYC, security, and compliance norms, making them safe and transparent.
TReDS offers:
Traditional bill discounting is usually limited to one bank and involves manual processes.
Yes. Central and State Government departments, PSUs, and CPSEs can onboard as buyers on TReDS platforms.
While TReDS does not directly report to credit bureaus, it helps MSMEs maintain healthy cash flows and reduce debt dependency, indirectly improving financial credibility.
Startups registered as MSMEs with valid invoices from approved buyers can use TReDS for invoice discounting.
The best TReDS platform depends on:
Ans. TReDS is an online platform that enables MSMEs to discount their invoices and receive immediate payment. TReDS platforms in India, such as M1xchange TReDS, provide a digital marketplace for MSMEs to sell their trade receivables to corporates and banks. To access TReDS, users can register online through the TReDS portal, complete the TReDS registration process, and log in to the platform. This facilitates quick and easy financing for MSMEs, improving their cash flow and reducing their dependence on traditional financing methods.
Ans. The primary purpose of TReDS is to provide a platform for MSMEs to receive quick and easy financing against their trade receivables. TReDS platforms in India, such as M1xchange TReDS, aim to improve the cash flow of MSMEs, reducing their dependence on traditional financing methods. By facilitating the discounting of invoices, TReDS helps MSMEs overcome liquidity challenges and achieve better financial stability.
Ans. To be eligible for TReDS, businesses must meet the following criteria:
Eligible businesses can register online through the TReDS portal, such as M1xchange TReDS, and access the platform after completing the TReDS registration process and logging in.
Ans. M1xchange TReDS is one of the platforms approved by the RBI for TReDS. As an RBI-approved TReDS platform, M1xchange provides a digital marketplace for MSMEs to sell their trade receivables to corporates and banks, facilitating quick and easy financing.
Get in touch to discover the benefits of M1xchange.
