This type of Invoice Finance is similar to Invoice Factoring. The main difference is that invoice discounting is normally confidential (know as CID - Confidential Invoice Discounting). The credit control function stays within your business and your customers won't know you are using a finance provider.
Similarly, to invoice factoring, you still use your unpaid debtors as security and in return the invoice discounting provider advances you a percentage (to around 75/80%) of the total cash due. Once your customer pays your invoice, the lender will then remit you the balance owed less their fees.
Is invoice discounting right for me?
This product is designed for businesses who offer trade terms to their customers, as the discounting provider will lend you money against your unpaid customer invoices.
This allows a business to receive most of the invoice value immediately, saving you the time of having to wait to get paid.
The process is simple: You send your invoices to your customers and then upload them online to the invoice discounting provider. They will then send you the funds at your agreed rate.
To summaries invoice discounting:
The main benefit with invoice discounting, apart from the immediate cash flow boost, is the ability to retain the credit control function within your organisation. However, because of this the provider will ordinarily offer a lesser percentage of cash upfront, this is because their risk in this instance is greater.
A working example
Let's say you have a discounting facility with a lender that provides you 75% of your invoice values upfront.
The above is a very basic illustration designed to show how the facility works in principle. The terms offered by a lender can vary. The lender may impose a maximum facility limit, minimum days overdue, or a minimum facility period etc.
Confidential invoice discounting facilities are normally better suited for larger company or those with complex trading agreements. It is possible to have a facility that covers UK and foreign customers; these are assessed on a case-by-case basis.
Why choose us?
We are fully authorised and regulated by the FCA
We charge no up front fees
How much does it cost?
Due to the subjective nature of these facilities the costs can vary. Here at MyInfinity we will always present you with a full, transparent costs summary prior to you accepting any facility.
To summarise the costs: Based on the above example of an invoice of £10,000 with an initial 75% draw down you could expect to pay anything form £250 - £300 per invoice. There may be other costs, such as facility management fees and rebates.
Like everything, it is always worth shopping around when your discounting facility is reaching the end of its term as the fees and rates are negotiable at this stage.
We can do this for you. Complete our callback form and one of our Invoice Finance specialist will contact you to discuss your requirements.
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