There are many significant benefits attached to invoice discounting. This form of invoice financing may well be for you if you are owed money from an invoice but don’t want your client to know you have been working with an invoice finance company. Perhaps the invoice isn’t quite overdue but you do need to raise funds quickly to boost your cash flow and keep growing your business? With discounting, you usually borrow around 85-90% of what your invoice is worth and settle with the invoice discounting company once you have been paid. This is a discreet form of borrowing that enables you to get the cash you need, when you need it.
Should I opt for discounting or factoring?
With invoice factoring, you sell your invoice to a finance company who will then chase money owed. This may be ideal if you’ve tried in vain to get your invoice paid or if your client has only bought services from you on a “one off” basis, so it doesn’t matter if they find out you’ve used a finance company. Whether you opt for factoring or discounting, there are many reputable companies that can deliver the outstanding service you’re looking for, at the right price. If you’re not sure which company to work with, you may wish to consider speaking to three or four firms so you can come to an informed decision.
Avoiding getting a bank loan
Discounting allows you to access money without having to rely on a bank and leaves you in full control of dealing with your invoice. More and more companies from a variety of sectors are using invoice discounting to get the money they need to keep operating. Any reputable finance company will discuss your options with you in depth so you can come to an informed decision over discounting and financing.