Invoice Discounting

What is invoice discounting?

Invoice discounting is a type of invoice finance that allows businesses to release funds tied up in their sales ledger. Invoices are sold to a third party who will pay a percentage of what the invoice is worth, minus a service fee. This means you don’t have to wait for your invoice to be paid by your customer under your payment terms.

Benefits of invoice discounting

  • Access to funds locked up in your sales ledger
  • An immediate injection of cash to help with cash flow
  • Invoice finance is more flexible than business loans
  • Lenders decisions are made faster
  • Funds are usually received within 48-72 hours
  • Helps reduce the risk of late payments
  • You keep control of your credit control
  • Confidential – so your customer won’t know you are using an invoice finance

How does invoice discounting work?

Invoice discounting works in the same way as invoice factoring, however, you maintain responsibility for your credit control. This is sometimes the preferred solution for businesses as your customer will not be aware you are using an invoice finance facility.

Funding Timeline

Below is an example of how invoice discounting works:

Raise Invoice

Raise your invoice for goods or services and notify lender via their online Invoice Discounting system.

Receive Payment

Your lender will then transfer the lending balance at the agreed rate, directly into your bank account.

Customer Pays

You collect payment from your customer at the agreed credit period, for example 30 days later.

Receive Balance

You’ll receive the balance of the invoice from the lender, minus any agreed fees.

For more information about invoice discounting, contact our specialist team on 0800 009 6106 or

Get In touch

0800 009 6106