For you to know what types of invoice discounting exist, you must know what exactly invoice discounting is. In simple words, invoice discounting is when you sell your unpaid invoices to a lender/investor and they give you the bill amount in advance. When your customer pays your invoice amount to you, your lender/investor pays the remaining balance minus their fee.
There are 4 major types of invoice discounting:
Disclosed invoice discounting facility is when all parties (customer/client) are aware of this arrangement. Your client then settles their invoice with your financer instead of you. The good part about this type is that you can achieve a low financing fee by leveraging your customer's credit standing.
This is the exact opposite of the aforementioned. It is highly confidential and is also known as undisclosed invoice finance. This entire transaction is conducted without your customer's knowledge. When your customer settles the invoice, he does so in an account that is accessed by your financer. Confidential invoice discounting attracts a higher fee.
If your business has fluctuating fund needs, then this is the best option for you. Here, individual invoices are sold on a need basis. It provides maximum flexibility.
Selling an entire sales ledger for invoice discounting turnover. It will be most suitable for you if your company has been working with a business that operates through long-term contracts.
Invoice Trades provide an easy way to get your cash flow incoming! We prioritize helping out businesses and investors. We make sure it is a win-win situation for both of them. Thus, with Invoice Trades, your money is safe and secure!