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Invoice discounting

Invoice discounting is can be considered as debtor finance. It helps those companies which are having cash flow problems as the customers are paying invoices in 30 to 90 days. Offering payment terms is mandatory while working with large commercial and industrial customers.

However, allowing clients to pay in 30 to 90 days affect the business cash flow, especially when your financial reserves are not sufficient for paying the corporate expenses. Invoice discounting helps you in improving business cash flow and along with this it helps to position your company for further future growth.

Invoice discounting is the financial instrument which uses a company's unpaid accounts receivable as collateral for proving finance or we can say loan, which is issued by a finance institution. This is considered to be an extremely short-term form of credit or borrowing, since the finance company have the power of altering the amount of outstanding debt when the sum of accounts receivable collateral changes. The amount of debt issued by the finance company is always less than the total amount of outstanding receivables which is typically 80% of all invoices that to less than 90 days old.

With Invoice Discounting, your business always retains control over its own sales ledger and the payment can be chased in the usual way. Your clients pay you directly; no third party involvement is known by the customer.

Who uses Invoice Discounting?

Invoice Discounting is particularly suited for the business in specific areas such as:

  • Construction
  • Recruitment
  • Manufacturing
  • Wholesalers
  • Printers
  • Couriers

Key points

  • It is confidential
  • Enables cash flow
  • Provides fast funding
  • Can be availed within less time
  • Provides security of your payment

But in any form of business which provides products and services to other businesses and provides clients with credit terms of 30-90 days, Invoice Discounting is the key for solving the problems as these are associated with slow payment.

Advantages of Invoice Discounting

  • check_circle_outlineReleasing up to 80% of the value of your outstanding invoices within 24 hours.
  • check_circle_outlineSimpler than standard business loans.
  • check_circle_outlineFunding can be secured without putting any assets on risk.
  • check_circle_outlineCash is freed up in terms to overcome the cash flow problems.
  • check_circle_outlineThe amount of available funding increases with business turnover.
  • check_circle_outlinePaying seller’s invoices directly increases your power to negotiate over discounts.
  • check_circle_outlineInvoice Discounting finance is competitively priced.
  • check_circle_outlineInvoice Discounting providers provide you with excellent business guidance.

Easier to get than bank financing

Invoice discounting is easier to avail than the conventional bank financing. Companies that meet the following criteria usually qualify for funding:

  • Companies having good commercial credit.
  • Who can’t afford the wait for 30 to 90 days to get paid by customers Are in need of funds for paying business expenses.
  • Do not have accounts receivable that can be pledged as security.
  • Do not have any sort of financial or legal problems.

For complex situations, or applications that demand for large amounts, the applicant may require to submit some additional information.

Key features

  • Invoice discounting is a perfect alternative solution for the traditional form of business finance.
  • It can provide instant access over the cash which is tied up with outstanding invoices.
  • It adapts with the changing business environments as they change and grow, which results in making it much more flexible when compared to other modes such as an overdraft or loan.
  • You can still maintain control on collection of payments, making this financial facility entirely confidential.

Want more information about invoice discounting? or looking for most suitable finance solution for you? Talk to our finance experts now.

Features of Connect2India finance

Why finance with Connect2India

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Easy processing

Complete online application process makes it easier for us to process forms faster and provide same day loan approvals.

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Fast disbursals

With online loan processing, business loan is disbursed within 3-5 business days of loan approval.

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Collateral free loans

No need to put your valuable assets in risk, we have unsecured loan that do not require any collateral.

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Fair interest rates

Our advanced algorithms determines the best rates for the type of loan you business require.

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No hidden costs

There will be no hidden costs or any other charges involved. Only processing fee of 2% is charged

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Flexible repayments

Loan repayment structure can be customized depending upon how your business is growing.