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A guide to invoice discounting

13/01/2017 / Comments 0

With businesses increasingly turning to invoice finance, due to reported success and the steady decline in the popularity of bank loans, we take a look at the features of invoice discounting.

So, how does invoice discounting work?

Through invoice discounting, a business can access up to 90% of an invoice’s value within 24 hours of its issue, thereby avoiding the cash flow issues that can be caused by trading on credit terms. When the invoice is paid, you receive the remainder of the invoice, less the funder’s fees. Unlike its cousin factoring, which sees the funder also conduct the sales ledger management aspect on the client’s behalf, invoice discounting allows your business to retain control of its credit management and chase customers for payment as usual.

Is it that straightforward?

In essence, yes, although facilities can incorporate different aspects depending on the requirements of your business. For instance, debtor protection can be added on which safeguards your business against late or non-payment of the invoice, whether due to customer insolvency or protracted default. Facilities can also be extended to advance funding against other assets too, such as stock, property, plant and machinery.

Isn’t it just for businesses that are struggling?

Not at all. While this might have been true a few years ago, there are thousands of growing businesses that rely on invoice discounting to maintain a healthy cash flow as their company raises more and more invoices. Because the volume of funding a business can access grows in line with its turnover, it can be hugely beneficial for those raising just a few invoices a month to those that raise hundereds.

Which funders can offer invoice discounting?

There are a wide range of invoice discounting providers on the market, each with varying experience and some that specialise in different sectors. They vary from the major banks to smaller independents, and this gives interested businesses a range of options when searching for that ideal facility.

If you would like to find out more information about invoice discounting or factoring, our expert funding consultants are available on 0800 9774833 or emailed info@hiltonbaird.co.uk. They’ll be able to listen to your business’s objectives and funding requirements in order to introduce the most suitable funders and facility on the market.

To find out how much funding your business could release through invoice discounting, get an instant quote here.

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Some of the funders we work with

  • IGF Invoice Finance
  • Henry Howard Cashflow Finance
  • PNC Business Credit
  • Leumi ABL
  • Santander Corporate & Commercial
  • Platform Black
  • Asset Advantage
  • Creative Capital
  • InvoCap
  • Positive Cashflow Finance
  • Team Factors
  • Catalyst Finance
  • Working Capital Partners
  • GapCap Cashflow Finance
  • 1pm
  • Davenham Trade Finance
  • Close Brothers Invoice Finance
  • Barclays
  • iwoca
  • Outsauce
  • Partnership Invoice Finance
  • Assetz Capital
  • Aldermore Invoice Finance
  • Shawbrook Business Credit
  • Investec
  • Bibby Financial Services
  • Woodsford Tradebridge
  • Nucleus Commercial Finance
  • Secure Trust Bank
  • Everline
  • Davenham Asset Finance
  • Lloyds Bank Commercial Finance
  • Regency Factors
  • Spotcap
  • Calverton Finance
  • Market Invoice
  • Skipton Business Finance
  • Roma Finance
  • Ultimate Finance Group
  • Pulse Cashflow Finance
  • Trade Finance Partners
  • Royal Bank of Scotland
  • ABN AMRO Commercial Finance
  • Metro Bank SME Finance
  • Innovation Finance

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We are a credit broker and not a lender and offer credit facilities from a panel of lenders

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