Invoice Discounting

If your business already practices sound credit management, and has the staff and systems to generate rapid customer collections, the factor’s skills will not be needed. But there may still be a need to turn debtors into cash faster, and generate the maximum working capital from the sales ledger balance.

Invoice Discounting is the ideal solution to meet this need. Immediate cash is available up to 80/85% of approved invoices. However, responsibility for the sales ledger operation remains with you, and the service is normally undisclosed to customers. Payments that you receive are paid into a bank account administered by the Invoice Discounter, after which you are credited with the balance, less charges.

In addition, some ABFA Members are willing to include bad debt protection in the service. It may also be possible to use the service for export sales.

Charges:-

The administration charge may be a flat monthly fee or a percentage of turnover. It is the subject of a formal quotation after the financier gains an understanding of the business and your requirements. The fee will commonly be around or lower than 1% of turnover.

For the finance provided in advance of collections, there is normally a discount charge calculated on day-to-day usage of funds. It is likely to be comparable with normal secured bank overdraft rates.

Our Lists of Members show which companies provide this service.