At its heart Invoice Discounting contains the basic characteristic of Factoring in that it’s the sale and purchase of a businesses accounts receivable at a discount. The core aspect that stands invoice discounting apart from factoring is that invoice discounting is usually a confidential agreement. Under the terms of a traditional Factoring facility all invoices raised carry a stamp disclosing a businesses use of the facility, with Invoice Discounting there’s no such disclosure.
As with Factoring a very simple calculation can be performed by taking a businesses sales ledger balance (business customers only) and working out 80% of this figure.
This is how much money may be available instantly so if it’s a materially larger figure than the business receives by way of an overdraft then there may be benefit in exploring further.
As can be expected from a business funding tool there are hoops to go through with lenders before the benefits of the facility can be realised.
Just Factoring is a specialist, independent and importantly, experienced brokerage that helps businesses through the often complex process.