Invoice Discounting - using invoices for cash flow finance
Invoice Discounting Explained For many small businesses seeking to raise instant funds for working capital Invoice Discounting may be the answer. It is similar to factoring in its aims but very different in practice. There are two types available, called Confidential and Disclosed. As their names suggest, with Confidential the customers are unaware of the Discounters involvement, whereas where it is Disclosed they are. The type you are on will to an extent be dependent on the quality of your ledger, and the history of your borrowing. There is a slight difference in the price paid for each service. How Invoice Discounting Works. · Client sends customers invoices for work completed · Client sends day sales ledger to the Discounter · Discounter pays up to 85% of invoice values to client · Client collects payment from customer and banks these into a designated account · Discounter collects funds from account and releases the 15% balance still retained less his charges. For many new businesses there will be an existing ledger available and the Discounter will be able to release those funds which qualify to the client. Invoice Discounting Costs These consist usually of a service fee which can be between 0.1% and 1% of turnover. The Cost of money which is the interest charge over base for the advanced money is a second charge. In addition there will also in a majority of cases be a minimum annual charge. If you have a need for finance, it is highly likely that if you have assets of any description, a broker can help you obtain the borrowing you need. Information provided by Steve Thatcher of Help With Debt (UK) Limited and total debt solutions company. For all further reading see http://www.helpwithdebtuk.com for personal contact email sthatcher@helpwithdebtuk.com For Steve's thoughts see http://steves-debt.blogspot.com Finally if in the UK and you need a friend to speak to call 01162171406 About Author Steve is a qualified solicitor who specialises in debt solutions for businesses and companies alike. From pre-pack administrations to walk through bankruptcys he is always free to talk to. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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