What is an invoice discounting facility?

Will it work for my business?

Now we know obtaining an invoice discounting facility is a relatively simple task, how suitable is it for your business? There are some caveats to take note of, as you may expect. The key thing to bear in mind is that this particular financing scheme isn’t designed for starter or micro businesses as most invoice discounting providers suggest a minimum turnover of between £100,000 to £250,000. You should also be able to demonstrate a profitable trading history and strong credit control.

What are the key benefits of an invoice discounting facility?

We think there are five key benefits of using the latent value in unpaid invoices to finance your business:

1. It is entirely confidential. Invoice discounting doesn’t affect your customers in any way and there is no requirement to inform them of the process.
2. As soon as you’ve raised the invoice, access to funds is near instantaneous.
3. You can maintain control of your invoicing process.
4. Invoice discounting will have a positive effect on your month end accounting activities. This is due to it reducing the amount of time you’ll need to spend reconciling invoices.
5. Your cash flow will benefit as you’ll no longer be sitting on unpaid invoices and you’ll be able to release funds even before your payment terms expire.

The bottom line

What is invoice discounting? It is possibly one of the quickest and most convenient ways for businesses to raise capital. If your business has been established for a while and you’ve got a positive trading history, there’s little to argue against invoice discounting. The fees involved are generally easily digestible and it offers a two-pronged attack. This is due to it enabling you to raise money for investment while reducing the strain caused by unpaid invoices.

What can we do for you?

If you’re worried about late or unpaid invoices, but want to keep control of your sales ledger, invoice discounting could be the ideal solution. A facility can provide an injection of cash, which can help push your business in the right direction.

We can help you secure the best invoice discounting facility for your business, designed to fit the needs and growth of your business. We are brilliantly positioned to negotiate the right deal for you, working closely with the top blue-chip lenders, we are able to get exclusive rates and deals that otherwise would be unattainable. So if you want to get your cash flow back on track and retain control over your credit facility, invoice discounting could be the right option for you.