More MSMEs, Tighter Deadlines, and Compliances: CredAble’s Structured Trade Solutions Help Corporates Stay on Track
The Union Budget 2025-26 opens up significant opportunities for Micro, Small, and Medium Enterprises (MSMEs)—a sector crucial in positioning India as a global manufacturing hub and responsible for 45% of the nation's exports.
One of the defining changes is the new classification criteria for MSMEs. According to the revised threshold, many businesses that previously fell outside the MSME bracket may now qualify and gain access to financial aid and policy benefits meant for medium and small enterprises.
Increasing the limit will entitle more businesses to be covered under the present 45-day payment scheme. The MSME payment rule as per Section 43B(h) mandates timely payments to micro and small enterprises registered under the MSMED Act, 2006.
As the 45-day payment rule extends to more MSMEs, smaller businesses can benefit from faster payments. Meanwhile, corporates must release a higher volume of payments to a larger pool of suppliers within tight deadlines— significantly increasing their working capital burden. In this post, we delve into how corporates can ensure timely payments and streamline compliance with a structured trade solution.
Let's first take a closer look at the new MSME definition.
The reclassification of MSMEs
With the revised MSME classification, investment limits have increased by 2.5 times, and turnover limits have doubled to INR 10 crore for micro-enterprises, INR 100 crore for small enterprises, and INR 500 crore for medium enterprises.
As a result, more micro and small enterprises supplying to large corporates now come under the 45-day payment rule. Timely payments help these businesses strengthen their financial position and remain competitive in corporate supply chains.
| Rs. in Crore | Investment | Turnover | ||
| Current | Revised | Current | Revised | |
| Micro Enterprises | 1 | 2.5 | 5 | 10 |
| Small Enterprises | 10 | 25 | 50 | 100 |
| Medium Enterprises | 50 | 125 | 250 | 500 |
Reports confirm that more than 20 million Small and Medium Enterprises (SMEs) will be covered as per the new rule.
Wider impact of the 45-day payment rule
As more micro and small enterprises qualify under the 45-day payment category—with the enhanced limits, the government aims to reduce unpaid dues to this sector, which are currently at INR 50,000 crore.
On the flip side, larger corporates will need to adjust how they handle supplier payments. Non-compliance with the 45-day payment rule will lead to a tax liability on the overdue amount. Corporate buyers missing the 45-day payment window face a compounded penalty—charged monthly at three times the bank rate set by the RBI.
The rule could now apply to a wider range of transactions, potentially affecting working capital cycles for big businesses. These companies will need to monitor outstanding invoices more closely to avoid penalties.
The financial impact on corporates is twofold:
- Increased compliance burden: There are a lot more expectations on the compliance front. Corporates must now track and report MSME payments across a larger number of suppliers and include more extensive disclosures in financial statements, along with ensuring GST compliance. This will lead to increased compliance costs as well.
- Liquidity strain: Suppliers previously paid on longer terms (60-90 days) now require payment within 45 days. This accelerates cash outflows and affects corporate cash flow management.
How structured trade provides a stable working capital source for corporates
The revised MSME classification has altered the supplier landscape for large corporates.
What corporates need is a solution that allows them to meet payment obligations while maintaining control over cash flow.
CredAble’s structured trade solution introduces much-needed flexibility for corporates. The solution involves vendor aggregation, which ensures timely MSME payments while preserving liquidity and reducing the compliance burden for corporates.
With a structured trade solution, corporates can:
- Pay MSME suppliers on time without straining liquidity.
- Meet the increased working capital requirement without increasing leverage.
- Align cash inflows and outflows for better working capital management.
- Reduce compliance burdens related to disclosure requirements of more MSMEs.
How CredAble is leading the way, streamlining MSME payments for corporates
By aligning funding with the corporates' procurement and revenue cycles—structured trade helps large businesses manage working capital more effectively, supporting long-term growth.
CredAble facilitates MSME aggregation, allowing businesses to work with a larger pool of suppliers without disrupting cash flow or increasing compliance burdens. Our suite of trade solutions is tailored to allow corporates to simplify payments and reduce working capital strain.
Think Working Capital… Think CredAble!