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Expert Opinion

Receivables Financing – never heard of it…

April 10, 2024

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12% annualised returns, flexible, growth area, low risk and simple.

What is Receivables Financing?

An emerging new asset class that solves a perpetual 1 day working capital gap merchants experience when they are waiting to receive their funds arising post credit/debit/ATM card transactions. This is an opportunity to invest in a growth area as Indian consumers increase their uptake of digital payments. This investment isn't easily accessed without Cube Wealth. You can also consult a Cube Wealth coach or download a Cube Wealth application. 

Suitable for?

Investors wanting to get great returns on money set aside for the short term that are interested in being part of new asset classes. Use it to achieve your holidays savings faster or simply earn more interest on your spare cash instead of leaving it parked in the bank only earning 3-6%. Track simply as part of your Cube Wealth portfolio along with all of your other investments instead of having to log into multiple portals.

Cube Advisor?

Founded in 2018, TradeCred has gone from strength to strength processing over 350 Crores in transactions with zero defaults and zero delays with their smart use of technology and their strong risk mitigation practices.

TradeCred is the first startup in India to be backed by the Institute of Charted Accountants of India. Their CEO and Founder, Hardik Shah, is a qualified Chartered accountant in India and also holds the Chartered Financial Analyst qualification (USA). He's worked at prestigious firms such as Ambit Capital, Ernst & Young, Reliance Jio and Allcargo Logistics in the past.

Behind TradeCred is a team of senior bankers, advisors and investors with incredible pedigree - The Bank of Bahrain & Kuwait, ICICI Bank, Wealth First Advisors, Ernst & Young.

Why Cube Wealth selected Settlement Financing?

We love sourcing emerging investment options but always conduct thorough research to ensure it meets our strict criteria before making it available to you. Yes - this includes Cube Wealth employees making investments with their personal funds to try it out too.

Receivables Financing has been selected because of its low risk, high returns, strong management and advisory pedigree. We also liked the fact this is a growth area and were able to build an investing and servicing model that fits with the experience we provide across all of our investment options to keep it simple and stress free for our Members. You can also consult a Cube Wealth coach or download a Cube Wealth application. 

How does it work?

Receivables Financing is a unique product that addresses a specific trade credit use case in India. When a consumer swipes a credit/debit/ATM card, the amount is deducted from his/her account immediately. However the merchant (receiver) has to wait 1 day for these funds to reach their account from the bank.  This 1 day capital gap causes cash flow issues in businesses. Receivables Financing provides 1 day loans to business that want to reduce their cash flow impact while waiting for transactions to settle from the day prior.

TradeCred uses technology to solve this problem for merchants. Strong risk management around transactions, authenticated by National Payments Corporation of India is used as part of the process to determine merchants that are suitable for these types of loans.

TradeCred works with a registered payment intermediary/ private ATM operator who gives real time settlement to merchants/ATMs post which the the money is received by TradeCred in its escrow account the following day. A payment intermediary is someone who manages the ecosystem of transactions between multiple banks and merchants. For example, one well known payment intermediary in India is Paytm.


There is active risk mitigation in place for Settlement Financing investments. All transactions are originated post biometrics or 2FA (Two Factor Authentication). Default risk is low given that there is a bank on the other end who is ultimately paying.


1. How does receivables financing work?

Ans. In receivables financing, a business first provides goods or services to its customers and generates invoices. Instead of waiting for customers to pay, the business sells these invoices to a factoring company or financial institution, which advances a portion of the invoice value (typically 70-90%). When the customer pays the invoice, the factoring company forwards the remaining amount, minus a fee.

2. What are the benefits of receivables financing?

Ans. Receivables financing provides businesses with immediate access to cash, improving liquidity. It helps stabilize cash flow, fund operations, and support growth. It's also accessible to businesses with limited credit history or poor credit, as approval is based on the creditworthiness of the business's customers.

3. Is receivables financing suitable for all types of businesses?

Ans. Receivables financing can benefit various types of businesses, especially those with slow-paying customers or seasonal cash flow fluctuations. It's commonly used in industries like manufacturing, distribution, and services. However, it may not be ideal for businesses that rely heavily on advance payments or businesses with a consistently high cash flow.

4. How do the fees in receivables financing work?

Ans. Factoring fees typically consist of a discount rate applied to the face value of the invoice. The rate varies based on factors like the creditworthiness of the business's customers, the volume of invoices, and the factoring company's policies. Businesses should carefully review fee structures to understand the total cost.


Cube Wealth makes it simple to access and invest in this low risk, high return investment. Add to your existing Cube Wealth portfolio or join Cube Wealth now to get started.

Note: We are no longer offering 'Receivables Financing' asset as our partner is not accepting any further investments in the asset.

We suggest you to check out our popular short-term investment asset 'Consumer Loans via Merchants' offered by RBI regulated P2P NBFC. Click here to know more.

Team Cube

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