Trade Receivables Discounting System (TReDS)
Ministry of Commerce & IndustryTReDS is an electronic platform that helps MSMEs convert eligible trade receivables into faster working capital by discounting invoices raised on buyers.
Eligibility Criteria
- MSMEs supplying goods/services to: Corporates, Public Sector Undertakings (PSUs), Government departments
- Must have invoice-based receivables
- Must comply with: PAN, GST registration
- Ecosystem Participants:
- Buyers – Corporates / PSUs / Government entities
- Financiers: Banks, NBFCs, RBI-approved financial institutions
- Operates under a multi-party model: Seller – Buyer – Financier
Benefits
- Faster access to funds through invoice discounting
- Collateral-free financing based on buyer’s creditworthiness
- Competitive interest rates via multiple financiers
- Risk & Cash Flow:
- Without recourse financing (no liability if buyer defaults)
- Improves working capital and liquidity
- Operational Efficiency:
- Fully digital and paperless system
- Enhances: Supply chain efficiency, Buyer–supplier relationships
- Accounting Benefit:
- Not treated as debt
- Leads to a cleaner balance sheet
How to Apply
- Register on TReDS platforms such as: Receivables Exchange of India Ltd, M1xchange
- Complete online registration
- Submit required documents
- Undergo KYC verification and due diligence
- Execute platform agreements
- Account activation
- Post Registration: Upload invoices and receive discounted payments from financiers
Documents Required
- PAN Card (entity)
- GST registration details
- Udyam Registration Certificate
- Business registration documents
- MoA / AoA / Partnership Deed
- Board Resolution / authorization letter
- Invoice records
- Bank account details
- Bank confirmation letter (if required)
- Identity proof of authorized signatories
- Signature verification
- Platform agreements (Master Agreement, mandate forms)
Important Disclaimer
We’ve simplified this scheme to help you understand it quickly. For the latest updates or detailed guidelines, you can always check the official government website.
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