MSME Receivable Finance scheme

The MSME Receivable Finance Scheme is administered by Small Industries Development Bank of India in India. It was launched to mitigate the problem of delayed payments to micro, small and medium enterprises from large purchaser companies by offering finance against bills of exchange or invoices arising out of such sales. You as an MSME can benefit by turning your pending receivables into immediate liquidity, thereby improving cash-flow and reducing reliance on other costly credit.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Finance against bills of exchange or invoices arising from sales made by MSMEs: If you have sold components, parts, accessories or services to a large buyer and are awaiting payment, the scheme allows discounting of the bill/invoice so you get funds sooner.
Eligible for MSME sellers (or certain large purchaser companies) engaged in manufacturing/services for large corporates: The scheme covers MSMEs in manufacturing or service sectors that supply components or sub-assemblies or parts or intermediates or services to large purchaser companies; alternately, large corporates procuring from MSMEs may also be eligible.
Usance/tenor of the bills/invoices typically up to 90-180 days: The bills of exchange or invoices to be financed under the scheme have a typical usance period (time until payment) of 90 to 180 days.
Discount rate linked to credit rating of purchaser/SME and need-based quantum: The rate of discount is tied to internal/external credit rating of the MSME or the large purchaser corporate; the quantum of assistance is need-based but subject to ceilings.
Limit validity and review: sanction limits valid for one year, with half-yearly review: The credit limit under this scheme is generally sanctioned for a period of one year, with half-yearly review.
Focus on reducing payment delays, improving MSME cash-flow and efficient receivables management: The scheme aims to provide swift realisation of dues, better cash management for MSMEs, and relieve the stress of waiting for payments from larger buyers.

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Finance against receivables	Discounting finance for bills of exchange or invoices of MSME	If you supply parts to a large corporate and raise an invoice for ₹ 50 lakhs payable in 120 days, you may approach SIDBI under this scheme to get funds earlier (net of discount).
Tenor of instrument	Usance typically up to 90-180 days	For example, if your invoice is payable in 150 days, it falls under eligible tenor; then discounting finance is provided accordingly.
Rate of discount / cost	Linked to credit rating of purchaser/SME	If the large purchaser has a strong credit rating (say AA-) the discount may be lower; thus your cost of getting early payments is competitive.
Quantum / limit of finance	Need-based; in case of large purchaser corporates up to ₹ 50 crore limit mentioned in scheme.	For example, if the large purchaser corporate’s purchases from MSMEs are ₹ 30 crore, finance assistance may be done within scheme cap limits.
Validity of limit	Sanctioned limit valid for 1 year, with half-yearly review	Suppose you get a limit of ₹ 10 crore under this scheme; after 6 months the bank/SIDBI reviews your performance and continues for another half year.

Eligibility Criteria

Who can apply:

The applicant must be an MSME (manufacturing or services sector unit) or a purchaser large corporate unit under scheme norms.
The receivables should arise out of credit sales by the MSME to large purchaser companies (for components, parts, sub-assemblies, accessories, intermediates) or services to such purchaser companies.
The bill of exchange/invoice must be accepted by the purchaser company; in absence of bill of exchange, invoice + proof of delivery may be used for discounting.
The purchaser company or the MSME should have satisfactory financials: turnover, net worth, profit, positive cash-flow, liquidity, rating etc.

Who cannot apply:

If the receivables are from buyers with poor credit rating or uncertain payment cycle, finance may be denied or cost may be higher.
The tenor of invoice beyond scheme stipulated period (more than 180 days) may not be eligible.
If the receivable is in dispute or not clearly documented (no delivery note, no accepted bill) then discounting may not be permitted.

Documents Required

MSME registration certificate (Udyam registration) of your business.
Invoice(s) / bill(s) of exchange issued to purchaser company.
Delivery/challan proof or goods received note showing supply to purchaser company.
Acceptance of bill of exchange by purchaser company (if bill used).
Financial statements of purchaser company (turnover, net worth, rating) or self if required.
Bank account details of your enterprise.
KYC documents of your enterprise (PAN, Aadhaar of proprietor/partners/directors).
Application form for MSME Receivable Finance Scheme (available at SIDBI/bank).
Any additional security/collateral if bank demands (depending on rating) though scheme is receivable-based.

Application Process for the Scheme

Option 1: Apply with Bullit (Recommended)

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.

Recommended for: MSME units seeking efficient access to receivable discounting with minimal hassle.

Option 2: Official Route

Prepare your supply/invoice records: MSME seller must have credit sale to a large purchaser and draw a Bill of Exchange (or accepted invoice) on the purchaser company.
Approach SIDBI (or its authorised intermediary banks/financing partner) for MSME RFS — submit buyer details, invoice/bill copy, proof of supply, corporate acceptance, rating details of purchaser.
SIDBI sanctions a limit (typically for one year, with half-yearly review) for discounting of invoices/bills under the scheme.
MSME seller draws bills, submits them to SIDBI/financing partner, receives discounted amount (net of charge) and buyer pays as per normal terms; seller improves liquidity.
Renewal: At end of validity (one year) the limit may be renewed subject to review of performance.

Option 3: Through Large Purchaser Corporate Linkage
If you are a large purchaser corporate engaging many MSME suppliers, you may apply for corporate limit under MSME RFS and thereby enable your suppliers to convert receivables into finance quickly. This also helps you strengthen supply chain.