Invoice Discounting is the most simple and popular form of Invoice Finance, offering a way to release cash tied up in your outstanding invoices (also known as the businesses debtor book). More simply put, it allows you to advance against money owed to you in the future, and is a popular alternative to an overdraft facility, widely used by businesses.
The Invoice Discounting company takes a Debenture (fixed and floating charge) over the debtor book and assets of the business, meaning that if the business fails, it can step into the businesses shoes and collect the money owed. With this security, it allows the finance company to lend more than would usually be the case with an overdraft as the risk to them is typically lower.
The main advantage of Invoice Discounting is the ability to borrow up to 95% of the outstanding invoices to customers, providing immediate and crucial cashflow for your business. Most Invoice Discounting facilities are provided on a Confidential basis, meaning that you do not have to disclose to your clients that you are using the facility.