Cash flow problems are one of the biggest challenges faced by MSMEs in India. Even profitable businesses struggle when payments from buyers are delayed. Invoice factoring has emerged as a practical solution to this problem by allowing MSMEs to convert unpaid invoices into immediate working capital.
Today, many invoice factoring companies and digital platforms help MSMEs get faster access to funds without depending on traditional bank loans. These companies focus on invoice-backed financing, making it easier for small businesses to manage liquidity.
In this blog, we list the Top 10 Invoice Factoring Companies for MSMEs in India, with RXIL ranked at the first position, followed by other leading players in the market.
What Is Invoice Factoring?
Invoice factoring is a form of receivables financing where a business sells its unpaid invoices to a financier or platform at a discount. The MSME receives a large part of the invoice value immediately, while the buyer pays the full amount to the financier on the due date.
Unlike traditional loans, invoice factoring:
- Is linked to actual sales
- Does not require collateral in most cases
- Depends more on buyer credibility than seller credit score
- Helps MSMEs manage working capital gaps
Benefits of Invoice Factoring for MSMEs
- Faster access to working capital
- Reduced dependency on bank loans
- No long-term debt addition
- Better cash flow planning
- Support for business growth
With digital platforms and regulated systems, invoice factoring has become safer and more transparent for MSMEs.
Top 10 Invoice Factoring Companies for MSMEs in India
1. RXIL (Receivables Exchange of India Limited)
RXIL is one of the leading and RBI-approved TReDs (Trade Receivables Discounting System) platforms in India. It plays a major role in providing invoice factoring and bill discounting solutions to MSMEs.
RXIL allows MSMEs to upload invoices raised on large corporates, PSUs, and government buyers. Once approved by the buyer, multiple financiers bid on the invoice, giving MSMEs access to competitive rates.
Key features of RXIL:
- RBI-regulated TReDs platform
- Completely digital and paperless process
- Competitive pricing through bidding
- No collateral required
- Strong focus on MSME liquidity
RXIL stands out for its transparency, compliance standards, and strong participation from banks and NBFCs, making it a top choice for MSMEs.
2. M1xchange
M1xchange is another RBI-approved TReDs platform that offers invoice factoring and bill discounting services. It connects MSMEs, buyers, and financiers on a single digital platform.
Highlights:
- Online invoice discounting
- Participation from major banks and NBFCs
- Faster funding cycle
- Strong presence across industries
M1xchange is widely used by MSMEs supplying to large corporates.
3. Invoicemart
Invoicemart, also known as A.TReDS, is a joint venture backed by leading financial institutions. It provides invoice factoring solutions through the TReDs framework.
Highlights:
- RBI-regulated platform
- Suitable for MSMEs and corporates
- Secure digital workflow
- Multiple financier participation
Invoicemart is known for its robust risk management and compliance framework.
4. KredX
KredX is a well-known fintech platform offering invoice factoring and invoice discounting for MSMEs and startups. It focuses on quick access to funds using technology-driven processes.
Highlights:
- Fast approval and funding
- Simple onboarding
- Suitable for growth-stage MSMEs
- Flexible financing options
KredX is popular among tech-enabled businesses and startups.
5. Drip Capital
Drip Capital provides invoice factoring mainly for exporters and importers but also supports domestic MSMEs. It focuses on trade finance and receivables financing.
Highlights:
- Strong presence in export factoring
- Digital onboarding
- Data-driven credit assessment
- Supports cross-border trade
Drip Capital is suitable for MSMEs involved in international trade.
6. Vivriti Capital
Vivriti Capital offers structured finance solutions, including invoice factoring and supply chain finance for MSMEs.
Highlights:
- Focus on mid-sized MSMEs
- Customised financing solutions
- Strong risk assessment models
- Backed by institutional investors
Vivriti Capital supports MSMEs with stable business operations.
7. Flexiloans
Flexiloans provides working capital solutions, including invoice-based financing, for small and medium businesses.
Highlights:
- Quick turnaround time
- Minimal paperwork
- Technology-driven credit models
- Suitable for small businesses
Flexiloans helps MSMEs that need fast and short-term liquidity.
8. Indifi Technologies
Indifi is a digital lending platform that offers invoice discounting and working capital finance to MSMEs across multiple sectors.
Highlights:
- Sector-specific financing
- Easy digital process
- Partnerships with NBFCs and banks
- Focus on underserved MSMEs
Indifi supports businesses with limited access to traditional funding.
9. Lendingkart
Lendingkart is a fintech company that provides short-term business loans and invoice-based financing to MSMEs.
Highlights:
- Quick approval process
- Digital credit evaluation
- Suitable for small enterprises
- Pan-India reach
Lendingkart is known for easy access to credit for small businesses.
10. NeoGrowth
NeoGrowth offers invoice-backed financing and working capital solutions, mainly for retail and service-based MSMEs.
Highlights:
- Strong focus on small businesses
- Flexible repayment models
- Digital application process
- Quick disbursal
NeoGrowth supports MSMEs that have regular sales but delayed payments.
How to Choose the Right Invoice Factoring Company
Before selecting an invoice factoring company, MSMEs should consider:
- Buyer credibility and acceptance
- Cost of financing
- Turnaround time
- Platform transparency
- Regulatory compliance
RBI-approved TReDs platforms like RXIL offer added safety, competitive pricing, and structured processes.
Why RXIL Is the Preferred Choice for MSMEs
RXIL provides a balanced ecosystem where MSMEs, buyers, and financiers work together. It reduces dependence on traditional loans and helps MSMEs unlock funds tied up in receivables.
With its digital processes, transparent bidding mechanism, and regulatory backing, RXIL continues to play a key role in strengthening MSME cash flow and improving payment cycles.
Final Thoughts
Invoice factoring is becoming a critical tool for MSMEs to manage cash flow and grow without taking on heavy debt. With the rise of digital platforms and fintech solutions, MSMEs now have multiple options to choose from.
Among all available options, RXIL stands out as the most trusted and structured invoice factoring platform, followed by other strong players that cater to different MSME needs.
Choosing the right invoice factoring company can help MSMEs improve liquidity, reduce financial stress, and focus on business growth.
FAQs
What is invoice factoring for MSMEs?
Invoice factoring is a financing method where MSMEs sell their unpaid invoices to a financier or platform to get immediate funds. Instead of waiting 30–90 days for buyer payments, businesses receive cash upfront, while the buyer pays the financier on the due date.
How is invoice factoring different from a business loan?
Invoice factoring is based on invoices raised on buyers, not on the MSME’s credit history or collateral. Business loans depend on financial statements, credit score, and guarantees. Invoice factoring does not create long-term debt on the balance sheet.
Is invoice factoring safe for MSMEs in India?
Yes, invoice factoring is safe when done through regulated platforms and established financiers. RBI-approved TReDs platforms like RXIL follow strict compliance, transparency, and risk control processes, making them reliable for MSMEs.
Who can use invoice factoring services?
Any MSME that raises invoices on creditworthy buyers such as large corporates, PSUs, or government departments can use invoice factoring. The buyer’s approval of the invoice is usually required for financing.
Why should MSMEs choose RXIL for invoice factoring?
RXIL is an RBI-approved TReDs platform that offers a transparent, digital, and competitive invoice factoring process. It allows multiple financiers to bid on invoices, helps MSMEs get better rates, and provides quick access to working capital without collateral.
