Invoice Discounting is usually a fully confidential facility that offers flexible funding that grows in line with your business. Bad Debt Protection is also available, offering you peace of mind against any bad debts.
Sales invoice summaries are forwarded to the invoice discounter who will immediately advance typically 80% of the total value. The level of advance will depend on how the provider views your debt and debtors.
The balance of the funds, less a small service fee, is paid to you when your customer pays.
Suitable businesses would usually have to demonstrate most of the following to a funder if they are to meet established criteria for an Invoice Discounting facility:-
Sometimes criteria may be relaxed. For instance, the high workload involved with a sales ledger may mean that Factoring is too labour intensive. In such cases, a bulk ledger Invoice Discounting may be more appropriate. The funder may wish to offer the facility on a disclosed basis (i.e. your customers are aware of their involvement) to mitigate the extra perceived risk.