Invoice Discounting and Factoring

How Invoice Discounting works?

Discounting is available for those businesses that have strong collections and credit management capabilities in house, but wish to generate additional working capital from the debtor book.

Discounting facilities may be operated on either a confidential basis (with customers unaware of the Discounter's involvement), or they may be disclosed, with each customer being made aware of the invoice discounting facility.

Up to 85% of the invoice value is available immediately. Customer receipts are paid into a separate bank account, and you are credited with the balance less Discount and Service charges.

Invocie Discounting Charges:

As with a factoring facility there are two main charges payable:

  • The Service or Administration Charge, which is expressed as a percentage of turnover, is generally between 0.1% and 1%.
  • The Discount Rate, which is charged on the outstanding balance, can range between 1.5% and 3% over bank base rate.

So in summary...

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