Unlock cash in your ledger
Get up to ~80–90% of approved invoice value advanced now, so working capital is no longer hostage to your buyers’ payment terms.
Turn receivables into cash — without waiting out the credit period.
Factoring & NBFC-Factoring, Domestic & Export
Factoring is the outright sale of your trade receivables to a bank or RBI-registered NBFC-Factor — cash now against invoices due later, under the Factoring Regulation Act, 2011 (amended 2021). Done as a true non-recourse sale, it can move the receivable off your balance sheet; structured with recourse, it is fast working capital. We match you to the right factor, recourse and price across domestic and export books. Part of Finnova’s ₹4,250 Cr+ mobilised across 100+ corporate-finance mandates since 2011.
Factoring Reg. Act 2011/2021 Recourse & non-recourse Domestic & export
Finnova’s corporate-finance track record since 2011, in numbers
₹4,250 Cr+
Capital mobilised across sectors100+
Deals advised end to end~182
RBI-registered NBFC-Factors (not 9,000)2011/21
Factoring Regulation Act & amendmentSince 2011
CA / ex-banker, senior on every fileFactoring is the assignment (sale) of trade receivables to a factor — a bank or RBI-registered NBFC-Factor — who advances cash against the invoices and, in true non-recourse form, carries the buyer-default risk. It is governed by the Factoring Regulation Act, 2011 (amended 2021), with every assignment registered with CERSAI. Factoring is one of the channels within supply chain finance — alongside TReDS and bank/NBFC programmes — not a synonym for it. See the full supply chain finance practice.
Finnova Advisory is an advisory firm — we structure and negotiate the facility; the bank or NBFC-Factor sanctions and disburses. We are not a lender and not affiliated with any single factor.
What factoring does
Cash against receivables, not a loan against them
If your money is tied up in 30–90 day credit terms, factoring converts those invoices into cash today by selling them to a factor. Whether it sits on or off your balance sheet depends on the recourse structure — and that choice is where the advisory value is. It links up to our full supply chain finance practice.
Shift buyer risk with non-recourse
A true non-recourse sale moves buyer-default risk to the factor and can de-recognise the receivable off your books — subject to the Ind AS 109 true-sale tests.
Domestic and export, one desk
Factor home-market receivables or overseas invoices through the two-factor export model — under one Factoring Regulation Act framework, with CERSAI filing handled.
Factoring vs bill discounting
Side-by-side — sale vs loan against the same invoice
They look alike — both turn an invoice into early cash — but factoring is a sale of the receivable and bill discounting is a loan against it. The difference governs recourse, your balance sheet and what services come bundled.
| What changes | Bill / Invoice Discounting | Factoring |
|---|---|---|
| What changesWhat it is | Bill discountingA loan/advance against the invoice; the receivable stays yours | FactoringOutright sale (assignment) of the receivable to a factorTrue sale possible |
| What changesGoverning law | Bill discountingRBI working-capital / bill-discounting norms under bank limits | FactoringFactoring Regulation Act, 2011 (amended 2021); CERSAI filing |
| What changesRecourse | Bill discountingAlmost always with recourse — you remain liable on default | FactoringRecourse or non-recourse — non-recourse shifts buyer-default risk to the factor |
| What changesBalance sheet | Bill discountingStays on balance sheet as secured borrowing | FactoringNon-recourse true sale can be de-recognised (Ind AS 109 tests) |
| What changesServices | Bill discountingPure financing — no collection service | FactoringCan bundle collections & sales-ledger managementAdds ledger ops |
| What changesCost | Bill discountingDiscount on tenor; rides your own bank limits | FactoringBank ~7.5–9.5% / NBFC-Factor ~9–12% p.a. (indicative, per case) |
Indicative — actual recourse, advance, pricing and accounting treatment depend on the factor, your buyers and the structure. We size it precisely for your book. Read the full breakdown in factoring vs bill discounting.
How Finnova helps
From receivables book to funded facility
We read your ledger the way a factor’s underwriter would — then match you to the bank or NBFC-Factor whose appetite, recourse stance and pricing fit, and get the assignment registered and funded.
-
Map the receivables & structure
2–3 daysWe assess your debtor concentration, buyer credit and tenors, and decide domestic vs export, recourse vs non-recourse, and whether collections should be bundled in.
-
Shortlist the factor
3–5 daysWe match your profile and buyers to banks and RBI-registered NBFC-Factors whose appetite and pricing fit — factor-agnostic, never a single panel — and run firm quotes.
-
Due diligence, agreement & CERSAI
1–3 weeksWe compile financials and the debtor book, negotiate the factoring agreement and recourse terms, and ensure each assignment is registered with CERSAI as the Act requires.
-
Drawdown & ongoing operation
on assignmentInvoices are assigned, the advance is released, and we keep the facility benchmarked — rolling into TReDS or reverse factoring where that prices better.
Who it’s for & what a strong case needs
Built for businesses with a real receivables book
If you sell on credit to creditworthy buyers — at home or for export — factoring releases the cash locked in that ledger. Here is who it fits best and what makes a clean underwriting case.
Who it suits
CA- and ex-banker-led, Pune & Mumbai-based, serving businesses pan-India.
What makes a strong case — indicative documentation
- Audited financials — typically last 3 years
- Debtor ageing & sales-ledger detail
- Sample invoices, POs & buyer contracts
- Buyer profile / credit data (export: country & cover)
- GST returns & bank statements
- KYC of the entity, promoters and signatories
Indicative — varies by factor, recourse and risk profile. See the full SCF programme design approach.
Consultation
Cash locked in receivables? Let’s factor it
One conversation tells you whether factoring fits your book, whether to go recourse or non-recourse, which banks or NBFC-Factors will write it and at what indicative cost. No pitch — a straight read from people who structure these facilities every week.
Thank you — your enquiry has been submitted
We’ve received your details. A senior member of our team will review them and get back to you within one business day. Everything you’ve shared stays strictly confidential.
FAQ
Factoring, answered
Factoring is the outright sale (assignment) of your trade receivables to a factor — a bank or RBI-registered NBFC-Factor — who advances cash now against invoices due later. It is governed by the Factoring Regulation Act, 2011 (amended 2021), so legally it is an assignment of receivables, not a secured loan against them. On a true non-recourse sale the receivable can come off your balance sheet; a loan stays on it.
With recourse, you remain liable if the buyer does not pay — economically a secured borrowing that usually stays on your balance sheet. Non-recourse (true factoring) means the factor buys the receivable and bears the buyer-default risk, which can support de-recognition off your books — subject to the Ind AS 109 true-sale tests being met. Pricing differs because the credit risk sits in different places.
No. The Factoring Regulation (Amendment) Act, 2021 removed the statutory principal-business gate, but RBI’s Registration of Factors Regulations, 2022 reintroduced a principal-business/asset test through delegated rules. So the practical pool of RBI-registered NBFC-Factors is in the low hundreds — roughly 182 — not the ~9,000 figure that circulates. Banks also factor. We match you to the right factor for your sector and buyer profile.
Yes. Export factoring finances invoices on overseas buyers — often through a two-factor model with a correspondent factor in the buyer’s country, frequently on a non-recourse basis with buyer-credit cover. It sits alongside export bill discounting and works under the same Factoring Regulation Act framework, with the assignment registered with CERSAI.
There is no flat rate. Pricing is underwritten per case on the buyer’s credit strength, tenor, recourse/non-recourse, and volume — indicatively a bank factor runs around 7.5–9.5% p.a. and an NBFC-Factor around 9–12% p.a., with advances commonly up to ~80–90% of invoice value. Finnova benchmarks firm quotes across factors for your portfolio.