Invoice Discounting is normally a bank product and not to be mistaken with Factoring. It is widely used in more established businesses that have a collection department, or administrative section. These businesses also have no need for a financier to collect invoices on their behalf. Most businesses at this level don’t need all invoices funded and often use it as an overdraft system for purchases of stock or wages.
Invoice Discounting lets you draw up to 80% against your ledger when required. It is not against individual invoices which sets it apart from factoring. Invoice Discounting also gives you the ability to predetermine how much you want to draw down out of each ledger limiting interest costs.
Once the debtors pay for invoices, the financier releases the final 20% less fees the next day into a business account. In most cases financiers have almost paperless procedures with a very simple on line system.
Banks often make this facility undisclosed / confidential to the debtors. If the accounts are well maintained only the lender and the financier are aware of this product occurring. If Invoice Discounting is what a business needs for cashflow, contact TDFC, and let a consultant discuss pricing and lenders to suit the business’s needs.
Trade Debtor Finance Consultants offer advice about invoice discounting, factoring, debtor finance, and trade debtor finance.