Invoice Discounting

What is Invoice Discounting?

Invoice discounting is a kind of short-term loan that helps businesses improve their cash flow by assigning/selling their unpaid bills to a new lender. Instead of waiting for 30, 60, or 90 days for your customers to pay, you can get immediate funds through this mechanism.

How Does It Work?

Invoice discounting

Benefits of Invoice Discounting

Immediate Funds

Gain immediate funds to cover operational expenses to purchase raw materials to earn better profit.

Flexibility

Flexibility in discounting one bill or multiple bills at the same time.

Low ROI

The rate of interest is generally very low, so it will be easy on your pocket.

No Additional Debt Liability

It does not increase your company’s debt profile, as it is based on your receivables. It provides a way to manage cash flow without additional liabilities.

Documents Required

What is a Bill Discounting Loan?

Bill discounting is a type of loan, through which a company raises a short-term loan against their unpaid bills, providing immediate funds for the company’s various requirements like purchasing raw materials at a better cost or towards working capital requirements.

This loan can be raised within 48-72 hours. The new lender will purchase unpaid bills from the company and provide a short-term loan for two to three months. The lender will then directly collect the bill amount to their account from the bill issuer company on the actual date of the bill.

Bill Discounting

Who Are Eligible for Bill Discounting Loan?

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FAQs:

  1. Q: Is my company eligible for invoice discounting?

    A: If your company is profit making in the last three years and working for good-reputed companies, then you are eligible for this product.

  2. Q: How much does invoice discounting cost?

    A: Charges may vary on the invoice value and the duration of the advance. Generally, it is a low-cost financing tool.

  3. Q: How quickly can I access funds?

    A: Once approved, you can access funds within 72 hours of submitting your invoices.

  4. Q: Will my customers know I am using invoice discounting?

    A: No, the process is confidential, and your customers continue to deal with you directly.

  5. Q: What kind of bills are eligible for invoice discounting?

    A: If bills issued by good-reputed companies, then they are eligible for bill discounting.

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