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A sales invoice discount involves a company selling its accounts receivable (invoices) to a financial institution at a discount. This allows the company to receive immediate cash rather than waiting for the customer to pay. For an unsecured BBB-rated company with a turnover (T/O) of ₹500 crore and above, the specifics would be: 1. *Credit Rating*: BBB-rated companies are considered to have a moderate credit risk. This rating affects the discount rate offered by financial institutions. 2. *Unsecured Nature*: Since the discount is unsecured, the financial institution relies solely on the company's creditworthiness and does not require collateral. 3. *Turnover*: With a turnover of ₹500 crore or more, the company demonstrates substantial business volume, which can positively influence the terms of the discount offered. Typically, the discount rate might be higher for unsecured transactions compared to secured ones due to the increased risk. However, the company's large turnover and BBB rating can help negotiate better terms despite the unsecured nature. www.loanbazaaronline.com https://lnkd.in/epcuDwM #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc

A sales invoice discount involves a company selling its accounts receivable (invoices) to a financial institution at a discount. This allows the company to receive immediate cash rather than waiting for the customer to pay. For an unsecured BBB-rated company with a turnover (T/O) of ₹500 crore and above, the specifics would be: 1. *Credit Rating*: BBB-rated companies are considered to have a moderate credit risk. This rating affects the discount rate offered by financial institutions. 2. *Unsecured Nature*: Since the discount is unsecured, the financial institution relies solely on the company's creditworthiness and does not require collateral. 3. *Turnover*: With a turnover of ₹500 crore or more, the company demonstrates substantial business volume, which can positively influence the terms of the discount offered. Typically, the discount rate might be higher for unsecured transactions compared to secured ones due to the increased risk. However, the company's large turnover and BBB rating can help negotiate better terms despite the unsecured nature. www.loanbazaaronline.com https://lnkd.in/efUKZmj #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc

A sales invoice discount involves a company selling its accounts receivable (invoices) to a financial institution at a discount. This allows the company to receive immediate cash rather than waiting for the customer to pay. For an unsecured BBB-rated company with a turnover (T/O) of ₹500 crore and above, the specifics would be: 1. *Credit Rating*: BBB-rated companies are considered to have a moderate credit risk. This rating affects the discount rate offered by financial institutions. 2. *Unsecured Nature*: Since the discount is unsecured, the financial institution relies solely on the company's creditworthiness and does not require collateral. 3. *Turnover*: With a turnover of ₹500 crore or more, the company demonstrates substantial business volume, which can positively influence the terms of the discount offered. Typically, the discount rate might be higher for unsecured transactions compared to secured ones due to the increased risk. However, the company's large turnover and BBB rating can help negotiate better terms despite the unsecured nature. www.loanbazaaronline.com https://lnkd.in/epcuDwM #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc

𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟵𝟮𝗖: 𝗪𝗵𝗲𝘁𝗵𝗲𝗿 𝗼𝘂𝘁𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗿𝗲𝗰𝗲𝗶𝘃𝗮𝗯𝗹𝗲𝘀 𝗰𝗮𝗻 𝗯𝗲 𝗿𝗲𝗰𝗵𝗮𝗿𝗮𝗰𝘁𝗲𝗿𝗶𝘇𝗲𝗱 𝗮𝘀 𝘂𝗻𝘀𝗲𝗰𝘂𝗿𝗲𝗱 𝗹𝗼𝗮𝗻𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗮𝗹𝗹𝗲𝗴𝗮𝘁𝗶𝗼𝗻 𝘁𝗵𝗮𝘁 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗼𝗳 𝗶𝗻𝘃𝗼𝗶𝗰𝗲𝘀 𝗿𝗮𝗶𝘀𝗲𝗱 𝗳𝗼𝗿 𝗜𝗚𝗦 𝗵𝗮𝗱 𝗻𝗼𝘁 𝗯𝗲𝗲𝗻 𝗿𝗲𝗰𝗲𝗶𝘃𝗲𝗱 𝗼𝗻 𝘁𝗶𝗺𝗲? Inclusion of expression "receivables" under Explanation to section 92B of the Act does not mean that every item of "receivables" appearing in the accounts of an entity, which may have dealings with foreign associated enterprises would automatically be characterised as an international transaction. There may be a delay in collection of monies for supplies made, even beyond the agreed limit, due to a variety of factors which will have to be investigated on a case-to-case basis. Importantly, the impact this would have on the working capital of the assessee will have to be studied. With the assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-a-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterised the transaction. 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟵𝟮𝗖: 𝗖𝗮𝗻 𝗧𝗣𝗢 𝗱𝗶𝘀𝗿𝗲𝗴𝗮𝗿𝗱 𝘁𝗵𝗲 𝗮𝗰𝘁𝘂𝗮𝗹 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗿𝗲𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗶𝘁 𝗼𝗻 𝘁𝗵𝗲 𝗯𝗮𝘀𝗶𝘀 𝗼𝗳 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝗲𝘅𝗽𝗲𝗱𝗶𝗲𝗻𝗰𝘆? Hon’ble Delhi HC held that it would also not be permissible for the TPO to engage in the restructuring of a transaction, unless the economic substance of a transaction differed from its form and if the form and substance of the transaction were the same but the arrangements relating to the transaction when viewed in totality differed from that which would have been adopted by independent enterprises acting in a commercially rational manner. It is clearly impermissible for the TPO to disregard the actual transaction unless it comes to the conclusion that an unrelated party would not have undertaken the same in usual course of business. More importantly it is wholly impermissible for the TPO to doubt commercial soundness of the expenditure that may be incurred. 𝐃𝐞𝐥𝐡𝐢 𝐇𝐂 𝐢𝐧 𝐭𝐡𝐞 𝐜𝐚𝐬𝐞 𝐨𝐟 𝐂𝐈𝐓 𝐯. 𝐀.𝐓. 𝐊𝐞𝐚𝐫𝐧𝐞𝐲 𝐋𝐭𝐝 (𝐈𝐓𝐀 𝟏𝟓𝟗/𝟐𝟎𝟐𝟑), 𝐝𝐚𝐭𝐞𝐝 𝟏𝟏.𝟎𝟕.𝟐𝟎𝟐𝟒

#invoicediscounting #factoring Reverse factoring (PID) also known as Purcahse Invoice Discounting ( in India) is a financial technology solution benefiting both buyers and suppliers by enhancing cash flow and working capital. In this process, the buyer initiates the program, and a third-party financier, referred to as a factor, pays the supplier on the buyer's behalf. The buyer then repays the factor according to agreed-upon terms. Key advantages for suppliers in reverse factoring include: - **Lower costs:** Suppliers benefit from reduced costs as the funder assumes credit risk for the large corporate entity. - **Quicker funding:** Growing suppliers can access funding promptly, guarding against potential insolvency. - **Protection:** Suppliers are safeguarded in case the buyer defaults on payment in the future. This innovative financial tool facilitates improved financial stability for both buyers and suppliers, fostering stronger business relationships and streamlined operations. #supplychainfinance #financialtechnology #invoice *** The Global Reverse Factoring Market Size is to Grow from USD 557.41 Billion in 2023 to USD 1517.62 Billion by 2033, at a Compound Annual Growth Rate (CAGR) of 10.53% during the projected period. GK Maple Corporate Consultant GK FINANCE Anand Chamaria

Reverse factoring (PID) also known as Purcahse Invoice Discounting (in India) is a financial technology solution benefiting both buyers and suppliers by enhancing cash flow and working capital. In this process, the buyer initiates the program, and a third-party financier, referred to as a factor, pays the supplier on the buyer's behalf. The buyer then repays the factor according to agreed-upon terms. Key advantages for suppliers in reverse factoring include: - **Lower costs:** Suppliers benefit from reduced costs as the funder assumes credit risk for the large corporate entity. - **Quicker funding:** Growing suppliers can access funding promptly, guarding against potential insolvency. - **Protection:** Suppliers are safeguarded in case the buyer defaults on payment in the future. This innovative financial tool facilitates improved financial stability for both buyers and suppliers, fostering stronger business relationships and streamlined operations. #supplychainfinance #financialtechnology #invoice *** The Global Reverse Factoring Market Size is to Grow from USD 557.41 Billion in 2023 to USD 1517.62 Billion by 2033, at a Compound Annual Growth Rate (CAGR) of 10.53% during the projected period.

Sales invoice discounting is a financial arrangement where businesses sell their accounts receivable (invoices) to a third party at a discount to receive immediate cash. This helps improve liquidity and cash flow. For an unsecured invoice discounting by a BBB-rated company with a turnover (T/O) of 500 crore INR and above, the following points are relevant: 1. *Unsecured Nature*: The discounting is done without any collateral, relying on the creditworthiness of the company and the buyer's obligation to pay.    2. *BBB Rating*: A BBB rating indicates moderate credit risk. It signifies that the company is considered to have a good capacity to meet its financial commitments but is more susceptible to adverse economic conditions compared to higher-rated entities. 3. *Turnover (T/O) 500 Crore and Above*: A turnover of 500 crore INR (approximately $60 million) and above indicates a substantial business size, suggesting a relatively stable revenue stream and potentially more robust financial health. This setup benefits the company by improving its cash flow without waiting for the invoice payment period, and investors are attracted to it due to the higher yield from a BBB-rated firm, balancing risk and return. www.loanbazaaronline.com https://lnkd.in/epcuDwM #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc

A sales invoice discount, typically unsecured, refers to a financial arrangement where a business sells its accounts receivable (invoices) to a financial institution or factor at a discount. The business receives immediate cash but at a lower amount than the total value of the invoices. This discount serves as compensation to the buyer for assuming the risk of non-payment from the debtor. Unsecured means that the discount does not require specific collateral to secure the transaction, relying instead on the creditworthiness of the debtor. www.loanbazaaronline.com https://lnkd.in/epcuDwM #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc

A sales invoice discount, typically unsecured, refers to a financial arrangement where a business sells its accounts receivable (invoices) to a financial institution or factor at a discount. The business receives immediate cash but at a lower amount than the total value of the invoices. This discount serves as compensation to the buyer for assuming the risk of non-payment from the debtor. Unsecured means that the discount does not require specific collateral to secure the transaction, relying instead on the creditworthiness of the debtor. www.loanbazaaronline.com https://lnkd.in/epcuDwM #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc

A sales invoice discount, typically unsecured, refers to a financial arrangement where a business sells its accounts receivable (invoices) to a financial institution or factor at a discount. The business receives immediate cash but at a lower amount than the total value of the invoices. This discount serves as compensation to the buyer for assuming the risk of non-payment from the debtor. Unsecured means that the discount does not require specific collateral to secure the transaction, relying instead on the creditworthiness of the debtor. www.loanbazaaronline.com https://lnkd.in/epcuDwM #Finance #loanservices #digitalmarketing #graphicdesigning #financialservices #startupfunding #FinancialAnalyst #loanbazaar #dsa #nbfc