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What is Confidential Invoice Discounting


Confidential invoice discounting is a form of invoice finance that can boost your businesses cash flow by releasing funds from unpaid invoices that you are able to use straight away. The facility is confidential which means debtors don’t know that an arrangement is in place.

 

What it involves:

You will be working with a confidential invoice discounting facility; they are the business that is being funded and the invoice finance provider. Debtors are also known as the client who’s invoices are being issued to the confidential invoice discounting facility.

 

How does it work?

You and the invoice finance provider will agree on a confidential invoice discounting advance rate (which could be up to 90% of the value of the invoice). When you raise the invoice to the debtor (client) it will also send a copy to the invoice finance provider who will then forward on the cash advance to you, this is usually within 24 hours. Seeing as the facility is confidential, you will handle the credit management and the collect the payment from the debtor. The debtor will deposit the payment into a trust account which will be set up by the invoice facility, they are in charge of monitoring and managing the funds. The trust account will be in your name, to keep confidentially with your clients. When the debtor has been paid, the invoice finance provider will release the outstanding funds from the invoice to you, only if the advance rate was less than 100%.

 

Is this something for you?

Cashflow

When running a company, you will receive funds in advance of payment that will help with your businesses cover costs and to keep your business running. This all depends on your businesses aims and financial circumstances as having a cashflow injection might also be used to help with growth and expansion.

Control

If you have the resources to retain credit control then confidential invoice discounting is perfect for you, as the invoice finance providers is in charge of their own sales ledger.

Flexibility

A confidential invoice discounting facility is funding against a business’s sales ledger, which is the funding that is received as the business grows alongside its sales volume.

Speed

Some businesses could end up waiting 60,90 or even 120 days for a payment. A confidential invoice discounting will ensure that the business is paid for products/services in advance, this could be up to 24 hours.

Added: 26 Mar 2019 15:17


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