A digital factoring platform is now available from Bangladesh-based FinTech company Think Big Options to offer financing options for smaller businesses.
TREDX plans to collaborate with startups, organizations, FIs, and suppliers to create TREDXonline, an online marketplace for digital invoicing. TREDX will enable digital factoring, or the real-time, discounted selling of authorized invoices from small and medium-sized businesses (SMEs) to financial institutions (FIs).
M Masrur Reaz, managing director of Think Big, estimates that SMEs contribute around one-fourth of the nation’s GDP. Many of them, nevertheless, have limited access to official financing.
The objective, according to Reaz, was to make finance more accessible to those who don’t have much collateral but do have operating capital that is locked up in larger companies’ bills payable.
The ideal product to meet the needs of SME suppliers, according to him, is factoring. Banks and factoring companies may have cut back on their authorized invoices and given the suppliers the much-needed cash.
Companies doing business in the US are now required to record information on supply chain finance agreements by the Financial Accounting Standards Board.
Companies must now disclose both the specifics of the financing arrangements and the outstanding amounts related to the programs.
The rule was introduced in December of last year, and it will become effective in the first quarter of 2019. It will deal with the problem that more open accounting would show how the programs’ effects on capital and cash flows.
The programs allow customers to pay vendors using third-party financing faster than usual, giving providers a lifeline.
