Invoice discounting vs. invoice finance
Tue, 01/06/2009 - 22:33
I have recently purchased a manufacturing business, producing glasses for breweries in the UK. Recently we have been experiencing some cash flow issues as our customers take on average 70 days to pay invoices.
After reading a couple of articles on I think invoice finance could be a good solution for my business.
I wondered if anyone could explain to me the difference between invoice finance and invoice discounting.
This is a very good question and one many people ask when they are new to invoice finance.
Invoice finance is a form of lending which is secured against the value of your invoices. There are two main types of invoice finance, factoring and invoice discounting.
The difference between the two is the management of your sales ledger, i.e. chasing and collection payment. With a factoring facility the lender/bank will chase payment for you and collect payment, with an invoice discounting service you would manage your own sales ledger.
I hope this helps. If you need any more information please feel free to contact one of our experts on 0845 388 9725.
Katerina Nicolaou