Invoice Discounting – An Overview

Invoice Discounting is a type of Invoice Finance that allows a business to generate cash against the invoices it has raised and sent to its customers. Because the money is available to draw down immediately you can plan and manage your companies cashflow far more precisely than not knowing when your invoices will be paid. Most lenders will make available up to 95% of the invoice value, and cash is often available to drawdown the same day.

Invoice Discounting – How it works

When you raise new invoices, you send them to your customers in the normal way. You will advise the Invoice Discounting company (usually electronically) the total value of invoices raised, and they will make available the pre agreed percentage against the value of those invoices immediately. You will maintain control over the Credit Control function and customer payments will continue to be sent to you. Once you have received payment from your customer you will repay any money that is owed plus any fees.

Invoice Discounting – will it be right for me?

• Up to 95% of the invoice value will be available, often the same day.
• Finance facilities that grow with your Business. The more invoices you raise, the more cash you can generate.
• You are a UK Business selling products and services to other Businesses in the UK or abroad.
• Your Bank is proving too restrictive with your overdraft.

How much does Invoice Discounting cost?

• Like all Invoice Finance facilities there are generally 2 costs involved.
• Service Fee – This covers the cost of administering the facility, and is generally in the region of 0.1% to 1% of your company’s sales.
• Discount Fee – This is the cost of borrowing form the Invoice Finance Company, and is quoted as a rate over Bank Base rate or one of the LIBOR (London Interbank Offer rates) rates. This can vary between 1.5% and 3%.

Working with you to find the most appropriate Finance for you Business.

We want you to find the best Business Finance for your organization. Our aim is simple. As a leading Finance Broker we want to save you time and money by introducing you to the right lender. Our team of experienced Factoring and Finance Brokers is available should you want to discuss your specific requirements, be they Working Capital, Asset Finance or Credit Insurance The Business Bureau has worked with hundred of clients to find the right finance for them, and our highly experienced Business Finance team will be delighted to work with you.