Clear previously known as ClearTax a tax and investment platform, announced the release of its invoice to financing (I2F) product. Clear stated that the GST network will be used as a platform for increasing supply chain finance.
“With Clear’s I2F product, small businesses can get cost-effective invoice financing in less than 30 minutes.” It leverages the power of GST data to provide smooth digital invoice processing while removing the requirement for the vast operational bandwidth required in traditional supply chain finance. The technology provides more confidence in the credit underwriting process and streamlines the credit processing journey, enhancing economics associated with short-term instruments for Financial Institutions by leveraging on real-time e-invoice and GST filing data,” it added.
Clear claims that invoice financing is an industry first in digital supply chain finance. Small companies who sell to medium and large organizations can use this solution to get fast cash for open bills. To get started, vendors must first register an account on Clear if they are new to the Clear environment, and then approve Clear to extract their GST data, based on which limitations are assigned to the vendor. Vendors can utilize this limit in the future to get payments against open invoices.
Clear auto-populates the invoices that are eligible for funding on the platform, and the vendor just picks which invoices he/she wants cash for. The merchant receives money in their bank account within a short period of time.
Vendors can opt to reimburse the money according to their own cash flow projections and, more significantly, when they are expected to be paid by their customers. Interest is only paid on the days when credit is used, giving merchants flexibility and lowering their interest expenses.
“The entire journey is digital, requires no paperwork, and takes only 5 minutes to set up.” The company spent a significant amount of effort developing algorithms to assess consumer creditworthiness based on GST data in order for the product to function properly. ClearTax evaluates GST data to establish the vendor’s relationship with its supplier chain, order fulfillment history, and sales quality. “We did this in collaboration with the country’s leading financial institutions,” Clear explained.
“We identified a significant market gap in supply chain financing for small businesses.” “By leveraging the power of GST data, our automated invoice financing product is designed to bridge this gap,” stated Archit Gupta, Founder and CEO of Clear.