Finance Solutions – Invoice Discounting

What is it?

Invoice discounting is a finance solution whereby a bank advances a business funds as soon as sales invoices are raised. The banks security is the invoice and the debtors listing itself.

How does it work?

Step 1. Raise Invoice: Invoice Customers for goods or services provided as usual. Step 2. Upload Invoices: Advise the finance provider of level of invoices raised. Step 3. Draw advance funds: The discounter will advance 70%-85% (“prepayment rate”) of approved Invoices immediately. Step 4. Draw balance: When the invoice is paid in full, the discounter release the balance of funds.

How much does it cost?

There are 2 standard elements to Invoice Discounting Facilities a) A discount charge (ie. an interest rate is levied on funds advanced to you) b) A monthly service fee

Might Invoice Discounting be suitable for your business?

Do you sell business to business? Are you sales on credit? Is your business based on selling a product or providing a service? Is your Debtors Ledger consistently at a level of €150k or greater?

What questions do you have?

We are happy to help. Please post your comment below or contact our friendly and knowledgeable team on 01 677 9000. To keep in touch, connect with us on Linkedin. If this article helped you, please share it with other businesses.