Selective invoice discounting is a means by which a company can finance its operations by receiving cash in the form of a loan from an unpaid invoice. A finance provider will lend the company a percentage of the value of the invoice for a fee.
The company can then have access to cash on its unpaid sales thereby improving its working capital and investment opportunities when cash flow is short or business is slow.
It remains the responsibility of the company to issue the invoice to its customer and chase up payment.
A company will make a decision that it wants to release some capital from a selected unpaid invoice. It will then assign the invoice to a selective invoice discounting provider.
The provider will approve the invoice and come to an agreement on its terms and conditions. This will include a quote and terms on conditions of repayment of the loan. The loan quote will cover up to 95% but in most cases around 70 to 85% of the value of the invoice.
This amount will be advanced as a loan to the company.
The loan plus the finance provider’s fee is to be repaid subject to the terms and conditions agreed. The company will receive the outstanding balance of the invoice once they have received full payment from the customer and it is up to the company to chase up outstanding debt.
With selective invoice factoring the company selects an unpaid invoice and then receives cash in the form of a loan from the financial provider for a percentage of the invoice amount. The company is responsible for chasing up the value of the invoice and paying back the loan.
With spot factoring the company sells its invoice to a 3rd party financial provider for a percentage of its value, the finance provider is then responsible for chasing up payment from the customer, the company is no longer in control of that.
Invoice finance allows you to release cash quickly from your unpaid invoices.
As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.
We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.
Hitachi made the process of moving factoring facilities painless, bearing in mind we previously had our facility with the same provider since 1997. I cant fault Hitachi's staff and processes and we are delighted with the move.
10:45, October 21, 2021
Staff excellent all together professional
05:57, October 03, 2021
Great service so far
14:20, August 27, 2021
Game-changer for our transport business
16:29, August 07, 2021
Excellent customer support
11:53, August 06, 2021