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Thinking of starting a business? We know that ‘Rome was not built in a single day’ and the same applies to businesses. An individual who has a potential business idea to implement or the proprietor who wants to improve the business will look for all the resources to start the company. Money is what gets you going. Whatever the type of business, money is an important factor to the successful operation of a business.

At KredX, we understand that running a successful business takes more than just a great idea. We help arrange for financing through our Working Capital and Growth Capital solutions on our technology platforms.

Table Of Contents :

1) What is Business Finance?

2) Importance of Business Finance

3) Types of Business Finance

4) Sources of Business Finance

5) Invoice Discounting

6) Why Invoice Discounting?

7) How Does Invoice Discounting Work?

8) Eligibility Criteria for Invoice Discounting

9) Documents Required

10) Faqs on Business Finance

What is Business Finance?

Business finance refers to the funds required to finance various projects a business may undertake ensuring uninterrupted cash flows. It is the capital and the credit deployed in the business required to fund the undertaking of the business, viz., raw materials, workforce, and other economic activities.

Importance of Business Finance:

Business finance is a vital component of any business that keeps it operating smoothly and profitably. 

  • Certain businesses may require a series of heavy cash inflows in the beginning of their journey. In such a case, an initial finance impetus is required for the smooth functioning of the business.
  • Depending upon the nature of the business, it may need varied levels of finance
  • Small business undertakings may require just a few rounds of cash flows and, in need of additional assistance, can access it from banks and other sources. 
  • Large businesses rely on external sources like bank loans, equity, debt, and other refinancing facilities.

Types of Business Finance:

Capital structuring is an important phenomenon for a company, as it influences the decision making for finance management of the company. 

There are two types of business finance: equity financing and debt financing.

Equity financing is the capital arranged by collecting from all the shareholders and also from subscriptions outside by issuing shares.

Debt financing is the mere borrowing in the form of debentures including external sources.

Sources of Business Finance:

Invoice Discounting:

Invoice discounting is the simplest way of raising finance for your day-to-day business activity. KredX serves as a platform to help you meet the business’s financial needs by arranging a loan facility for the businesses through invoice discounting. 

Why Invoice Discounting?

How Does Invoice Discounting Work?

Eligibility Criteria for Invoice Discounting:

  • The age of the business and the visibility of the business
  • Minimum turnover requirements based on the type of industrial services
  • Maintenance of minimum CIBIL score for the assurance of creditworthiness of the business firm
  • Businesses selling goods and services to reputed companies
  • Nature of active clients in the business

Sign Up Now to Check Eligibility for Invoice Discounting

    Documents Required:

    • KYC documents: Copies of PAN Card and Aadhaar card.
    • Address Proof of Business and Entrepreneur.
    • Business Registration Proof
    • GST registration certificate
    • GST filed returns
    • Ledger of debtor /debtors
    • 6 months Bank Statements
    • Last 3-year Profit and Loss Statements
    • Audited financials of the business
    • Credit Scores
    • Outstanding Invoices

    FAQs on Business Finance:

    A. Business Finance is the financing facility that can be availed by the small and medium enterprises and large companies for lending, borrowing, investing and procuring funds efficiently. It also refers to the conservation and acquisition of funds effectively for business purposes.