Frequently Asked Questions

General Questions
Business
Investor

General Questions

What is Invoice Discounting?

Invoice discounting is the practice of using company's unpaid invoices to raise working capital & fulfil its financial needs. Traditionally, financial institutions including banks and NBFCs have been discounting invoices for MSMEs. Invoice discounting involves transfer of rights on an asset (invoice) from the seller (i.e. business) to the financier (i.e. investor) at an agreed value.

Who is behind KredX?

KredX is backed by a set of passionate founders, financial & technology experts and industry stalwarts. For details about our team go to this link.

What is KredX?

KredX is an online invoice discounting platform where business owners get an opportunity to raise funds for their working capital needs at attractive terms by selling their unpaid invoices raised on blue chip companies. KredX aims to remove operational inefficiencies around the invoice discounting space by extensively using technology and its data analytics & credit underwriting capabilities.

Business

What is Invoice Discounting?

Invoice discounting is the practice of using company's unpaid invoices to raise working capital & fulfil its financial needs. Traditionally, financial institutions including banks and NBFCs have been discounting invoices for MSMEs. Invoice discounting involves transfer of rights on an asset (invoice) from the seller (i.e. business) to the financier (i.e. investor) at an agreed value.

How does it work?

KredX provides a marketplace/platform for business owners to sell and investors to purchase invoices raised on blue chip companies. It combines the best in class technology experience with credit underwriting & data analytics capabilities to create a brand new investment asset class.Business-owners looking for advance on their invoices, raised on blue chip/creditworthy institutions, can use our platform to sell these unpaid invoices at attractive rates.

Register yourself with us on our website as a business and we will help you sell your invoices at competitive rates.

What is the eligibility criteria for businesses?

Any business that supplies goods/services to large blue-chip companies can avail the bill discounting services provided by KredX. Eligibility and amount of discounting is governed by the creditworthiness of the business and therefore they should be willing to share their financial information and other related documents.

Does KredX have an upper sanction limit?

We have no upper limit for sanctioned amounts for your invoices and it is solely dependent on the business’s requirements. The upper limit depends on the business requirement and the eligibility as per KredX’s criteria.

What is the maximum invoice discounting tenure?

As we provide short-term investment facility to our investors, we only offer tenures upto 90 days as of now.

Will KredX’s invoice discounting facility affect my balance sheet?

No. We offer a zero-liability bill discounting service. Since the working capital is availed using invoices, it bears no impact on your balance sheet.

Will my financial information be shared with other third parties?

KredX is a ISO 27001:2013 certified private entity that deals with secure information from our clients. The ISO certification is further validation of the high standards we follow.

What is the KredX TDS Payment Policy for business?

All invoices listed on the KredX platform on behalf of the business are purchased by our network of investors. The benefits accrued through this instrument is an income for these investors and hence, attract a TDS of 10% as per the IT ACT, Government of India, under Section 194A.

As per our TDS Payment Policy, KredX will deduct the TDS amount due from the total payment but not deposit the TDS amount on behalf of the business’s Company. Partners will be required to deposit the respective TDS liabilities to the Income Tax Authority on their own regularly before the due date. Furthermore, the TDS deposited needs to be allocated to the Investor's PAN by the end of each quarter. To ease out this entire process, KredX will provide all the necessary details along with TDS liabilities as well as Investor's details such as PAN number and amounts to be allocated via KredX Dashboard on an as-you-need basis.
KredX will initiate the refund of the TDS amount withheld once the partners submit the Form 16 for each quarter, post a quick internal verification of the submitted Form 16

Kindly note, KredX will not refund the amount withheld till we receive the form 16 for the previous quarters.

What happens if KredX goes out of business?

KredX in collaboration with their partner bank has facilitated opening of an escrow account for each individual member. All transfer of funds happen through these escrow accounts. In case of liquidation of KredX due to any financial/legal reason, money in member's escrow account will be returned to the respective owners immediately. Money involved in the process will not be transferred to KredX's account at any stage (except service fees and government taxes, etc.).

Investor

What is Invoice Discounting?

Invoice discounting is the practice of using company's unpaid invoices to raise working capital & fulfil its financial needs. Traditionally, financial institutions including banks and NBFCs have been discounting invoices for MSMEs. Invoice discounting involves transfer of rights on an asset (invoice) from the seller (i.e. business) to the financier (i.e. investor) at an agreed value.

How does it work?

KredX provides a marketplace/platform for business owners to sell and investors to purchase invoices raised on blue chip companies. It combines the best in class technology experience with credit underwriting & data analytics capabilities to create a brand new investment asset class.

Investors looking to invest money for short term (30-90 days on an average) can earn attractive returns on their investment by purchasing these future cash flows. Register yourself with us on our website as an investor and we will help you park your investments in this unique asset class with varying maturity periods providing attractive risk-adjusted rate.

Who can invest with KredX?

• Individual resident investors
• HUF / Proprietorship registered in India
• Institutional investors
• Banks, NBFCs and other Financial Institutions
• NRI investors (Provided you have an NRO account and comply with basic pre-defined KYC guidelines- Pan card and valid Indian address proof.)

Is there a minimum amount for investment?

As of now you can invest a minimum of INR 3 lacs per deal. This has been set to ensure that you have sufficient liquidity to invest in an alternative investment class and the required risk appetite for the same.

How can I become a member of KredX?

Membership process is very simple. Just provide your contact details on our website and our relationship managers will contact you to complete the registration process. As a part of our KYC norms, we will need a small set of documents to ascertain your investor's status. Once we get those documents, we will authorize your membership and you will receive an email from KredX.com apprising you of your login details.

What is the kind of returns expected for the investors?

KredX does not play a role in deciding the discount rates of the invoices. The returns on your investment will be governed by market forces on the basis of demand and supply economics. Expected yield corresponding to deals will be made available to investors before any purchase, this ensures that investors know their returns before initiating the fund transfer.

Does KredX guarantee my returns?

KredX provides a platform to connect sellers of invoices and investors and execute transactions between them. KredX provides certain tools, for example - credit report of the seller, enterprise report (blue-chip company) among others - to take a calculated investment decision.

KredX does not guarantee any fixed return to its investors and the investment would be subject to the traditional market risk associated with invoice discounting. Please refer to the Risk factors for details.

Do I have to fund the entire invoice amount?

No, as an investor, you can decide on the amount you would want to invest in any invoice. You can either fund partially or fully an invoice.

What is the tenure of investment?

Tenure of the investment is linked to the invoice payment date. Every invoice will have a different maturity period. We have seen that historically it has ranged from 30 days to 90 days.

Why should I invest through KredX?

Invoice Financing is a very niche product in the asset based financing arena. It carries minimal undue risk while generating superior return on investments. In advance economies, it has emerged as a major form of investment. KredX's Invoice Financing platform ensure higher short-term yield for its investors. Our conservative and ever evolving risk management policies minimizes the risk of investing for our investors. Our experience in MSMEs financing space helps us in catering only to the lowest risk segment within the space.

Will my financial information be shared with other third parties?

KredX is a ISO 27001:2013 certified private entity that deals with secure information from our clients. The ISO certification is further validation of the high standards we follow.

What if the invoice is not paid by the company?

We have an established due diligence process in place backed by manual verification of the parties. We are also very selective in choosing the people with whom we do business.

The business in KredX are obliged legally to pay back the amount owed to the investors irrespective of whether the invoice is paid by their customer.
In the remote case of a default by the customer, we will facilitate legal help for them and will provide assistance in recovering the loss. We have also tied up with various collection agencies to recover the amount due from the business in case of default.

What is the risk involved?

Any investment comes with its own associated risk. The risk could be total capital erosion. However, we have taken several steps to mitigate the risk – both strategically and operationally:

Comprehensive risk management framework – Detailed credit analysis of sellers and their financials at onboarding

Verification process - Invoices are verified physically. Moreover, invoices are restricted to only blue-chip companies.

Strong legal framework – All sellers are required to sign our legal agreements to ensure our investors are well protected.

• If blue-chip company does not pay the invoice money in future – the small business is still liable to pay the money owed to the investor.

• If the small business collapses, the blue-chip company would still pay the invoice money and this will be paid directly into the escrow account which will be transferred to the investor.

• KredX is a tech platform and it does not assume any credit risk on behalf of the investors.

What is the risk mitigation process at KredX?

The KredX business model is one where investors do not face any execution risk. Our 360° credit risk analysis system takes place at multiple stages.

Business-Onboarding Stage
We follow a three-pronged approach that is dependent upon the business, the enterprise and their relationship to arrive at a KredX Score for every business.

Business -
Credit credentials (Credit reports of company and individual reports of directors)
Financial Health & Stability (All financial and company documentation)

Enterprise-
Credit Rating of Enterprise
Fundraising Ability
Liquidity
Market News

Relationship Between Busines and Enterprise-
History of working relationship
Payment timeline

Post Evaluation Stage
Legal mechanisms such as undertakings, bills of exchange, review of legal proceedings and Board for Industrial and Financial Reconstruction (BIFR), etc involving vendor and enterprise.

Invoice Listing Stage
Verification of every invoice before listing on the platform

Invoice Purchase Stage
KredX monitors the security of every transaction through Escrow Accounts (in collaboration with ICICI Bank) for both Businesses and Investors, separately.

In addition to this, all the important data points after evaluation by the KredX risk team are summarised in different reports at the vendor, enterprise and deal level.

What happens if KredX goes out of business?

KredX in collaboration with their partner bank has facilitated opening of an escrow account for each individual member. All transfer of funds happen through these escrow accounts. In case of liquidation of KredX due to any financial/legal reason, money in member's escrow account will be returned to the respective owners immediately. Money involved in the process will not be transferred to KredX's account at any stage (except service fees and government taxes, etc.).

Bangalore
(Registered Office)

38,39,40 and 41 Gayathri Mansion, 3rd Floor, No.80/3, Bellandur Village, Varthur Hobli, East Taluk, Bangalore - 560103, Karnataka, India

Directions
Delhi
(Corporate Office)

ABL Workplaces,
M 130-131, Second Floor,
Connaught Circus,
Connaught Place,
Delhi - 110001, India

Directions
Mumbai

Wework,
14th Floor, 247 Park, Vikhroli West,
Mumbai - 400079,
Maharashtra, India

Directions
Chennai

Regus Business Centre, Level 6,
Chennai Citi Center, 10/11,
Dr. Radhakrishnan Salai,
Mylapore, Chennai - 600004,
Tamil Nadu, India

Directions
Hyderabad

Taj Deccan,
E-Floor, Road no. 1,
Banjara Hills,
Hyderabad - 500034

Directions
Ahmedabad

DEVX, C-201,
The First, Behind
Keshavbaug Party Plot,
Vastrapur, Ahmedabad-380 015

Directions
INDORE

22/3, SP 365, 2nd Floor
Opposite To Hotel Apna Avenue,
Janjeerwala Square.
Indore-452001. MP

Directions
Kolkata

Awfis, 4th Floor,
Shri Manjari Building,
8/1A, Camac Street,
Kolkata - 700071

Directions

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