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Invoice Discounting

Invoice Discounting is a facility that allow you to raise working capital against your unpaid invoices or debtor book

Invoice discounting provides funding of up to 95% against your existing unpaid invoices at commencement and against all new invoices, usually within 24 hrs

Your business retains control over the administration of your sales ledger, so you chase your debtors, send out reminders and make phone contact just like you currently do

In most circumstances the facility is completely confidential, so your customers are not aware that you are using an Invoice Discounting facility.

Invoice discounting can provide a very cost effective means of improving your businesses cashflow and working capital

Unlike factoring, the discounters don't have direct control over collection of invoices and therefore prefer to provide facilities to well-established businesses with good systems, and profit track record.

Facilities are usually available when gross sales exceed £250k pa and where the business has a sound balance sheet

Charges are split in two separate charges. An administration fee is paid, usually a fixed % of each invoice value, typically within the range 0.75% to 0.1%, depending on your circumstances. The second charge is a discounting fee, which is usually a fixed % above bank base rate. This is only applied to funds you use, and works in a similar way to how you are charged interest against an overdraft.

Some funders offer the option to take out bad debt protection as part of the package, so if a credit approved customer fails to pay an undisputed debt, the funder will credit you with the amount of the debt up to the agreed credit limit.

So Invoice Discounting gives you

• A finance facility linked to your sales, not your balance sheet
• High levels of funding
• Flexibility
• Confidentiality
• Improved cashflow
• Optional bad debt protection
• Speedy set-up – facilities can be in place within 7 days

What next? To be one step closer to getting the finance you need

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