Invoice Discounting

An Invoice Discounting facility generates funding against your sales ledger in much the same way as factoring.

The main difference between invoice discounting and factoring is that your company retains responsibility for chasing your compaines ledger. This type of business facility is available to companies that have excellent audit trails, and can demonstrate the ability to collect the debt in-house.

Invoice discounting is usually the preferred option as it enables you to maintain existing relationships with your customers, as well as being cheaper in terms of the service charge involved. If you wouldn't want your companies customers to know of a third party involvement, a Confidential Invoice Discounting facility is your best option.

To complement the invoice discounting facility, a number of funders will also look at other assets within your business with a view to providing additional funding against plant and equipment, property and stock.

This Asset based lending as it is known, can be particularly useful to fund seasonal stocking requirements, or to provide increased leverage in the short term to effect management buy outs.

Costs:

Service charge: Generally cheaper than factoring because you are managing your own sales ledger, the charge may vary between 0.1% and 1.5% of turnover. A minimum annual charge may be imposed.

Discount rate: Ranges between 1.5% and 3% over base, payable only on funds in use.

All industry sectors will be considered.

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