Contact Us Today!
Financial calculation for selective invoice discounting

Definition of Selective Invoice Discounting

“Selective Invoice Discounting is a means of raising working capital by selling selected invoices to a third party finance provider, in exchange for immediate release of funds.”

Invoice Discounting is a great way to free up working capital instantly, but some companies are concerned about committing their whole sales ledger to the process and would prefer to just use one or two invoices, as and when they need, to speed up their cashflow.

If that’s how you feel, then selective invoice discounting could be a convenient way of unlocking the value of your invoices. With selective invoice discounting, you can choose which invoices you want to send to us – maybe because you need cash quickly to snap up stock, act on a marketing opportunity or just for a quick boost of working capital.

How does selective invoice discounting work?

You choose which invoices to discount – perhaps because you have hit a lull in trading and need some additional working capital, or even because an opportunity has come up that is too good to miss but you need cash quickly to snap it up.

You send us the invoice or invoices that you wish to discount, after you have sent a copy to the customer, and we will pay you up to 90% of the value of the invoice.  It is worth remembering that a lender will normally want to ensure that you have adequate credit collection processes in place, and may want to ensure that you have Bad Debt Protection Cover in place in the event that your client doesn’t settle their invoice, as you will remain responsible for the invoice if your client doesn’t pay. The lender may also make an assessment of your customer’s ability to pay before paying out on the invoice. When the customer has settled the invoice, you send us the advance that we paid, along with a small percentage fee. As you retain control of chasing and issuing invoices, selective invoice discounting can be confidential and your customers can remain unaware of any third party involvement.

Will selective invoice discounting work for me?

Selective invoice discounting is particularly effective for companies whose business flows in seasonal cycles because during the lean times you can use selective invoice discounting to speed up your cash flow but during fast trading periods you don’t need the service.

Selective invoice discounting can work for most sectors though, as it is a fast, flexible way to get cash quicker without impacting on the payment terms you have agreed with your clients. Selective invoice discounting is usually offered on a revolving credit facility so that when one invoice is settled, more credit becomes available, subject to your customer meeting lender’s assessment criteria.

Selective invoice discounting is a flexible way to free up working capital during quiet times, without using your entire sales ledger. Some of the sectors we have found selective invoice discounting solutions for include:

  • Selective invoice discounting for manufacturing

To find out how selective invoice discounting could help you control your cash flow, even during seasonal dips, speak to us today.

Our Latest Blogs

  • What is alternative finance and how can it help your business

     

    Alternative finance is a broad term, encompassing many types of finance solutions. At first, the term and the products it includes may seem daunting, but once understood, they reveal themselves to be credible and potentially beneficial for businesses of all types.

  • Is it possible to get a small business loan after bankruptcy?

     

    Bankruptcy is a legal status applied to a person who is unable to repay their debt. It offers a fresh start for those whose debts have become completely unmanageable, although it can have serious implications for applicants’ personal and professional lives. When bankrupt, a person will be absolved of the responsibility to deal directly with their creditors, most court action aimed at reclaiming their debt will be dropped, and many debts can be written off (student loans and legal fees cannot be).

  • Alternative Funding Solutions for the Transport and Logistics Industry

     Transport and logistics is an ever-changing industry, especially now as we sit on the cusp between the current dominance of traditional vehicles (fuelled by petrol or diesel, driven by a human) and new technologies that could potentially transform the norms (electric and self-driven).

Hot from Twitter

In order for your #business to grow, it is likely that at some stage asset #finance will be offered. So why should you choose it and when is it better than traditional bank #lending? This guide is everything you need to know about using #assetfinance: bit.ly/2qK79I6 pic.twitter.com/Fdjg…

Yesterday from Access Commercial's Twitter via HubSpot · reply · retweet · favorite

NACFB logo
Contact Access Commercial Finance Today