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HaslamConsultInvoice Finance

Funding, you keep control

Invoice discounting: the funding, without the visibility.

Invoice discounting releases working capital against your unpaid invoices while you carry on collecting payments yourself. Where a provider agrees, the facility can be confidential, so your customers see no change.

Discuss your optionsHow we work

Credit control

Retained by your business

Customer awareness

Often confidential

Often suits

Established firms with robust systems

Typical requirement

Reliable ledger management

What discounting is

Invoice discounting works on the same principle as factoring: a proportion of your unpaid invoices is advanced to you, with the balance following when the customer pays. The key difference is who does the collecting. With discounting, that stays with you.

Your customers continue to pay into a designated account and your team chases payment as normal. Because the provider is not in contact with your customers, many discounting facilities can operate confidentially. Confidentiality is at the provider's discretion and depends on their assessment of your systems and controls.

Discounting tends to suit businesses that already run credit control competently and simply want a source of working capital that expands with the ledger.

How discounting works,
step by step

  1. 01

    Invoice as normal

    You raise invoices and send them to customers with no change to your usual process.

  2. 02

    Upload your ledger

    You submit invoice details to the provider, typically through an online platform, and draw the funds you need against them.

  3. 03

    You collect payment

    Your credit control team follows up and customers pay into a nominated account.

  4. 04

    Availability refreshes

    As invoices are settled, the funds advanced against them are repaid and availability is recalculated against new invoices.

Who it tends to suit

  • Businesses with an established credit control function
  • Companies that prefer customers not to know funding is in place
  • Firms with good systems, reporting and ledger discipline
  • Larger or more mature businesses seeking flexible working capital
  • Businesses looking to move on from a factoring facility they have outgrown

Typical requirements

  • A functioning credit control process with reasonable collection performance
  • Accurate, regularly reconciled sales ledger
  • Ability to provide the reporting the provider requires
  • A spread of creditworthy business customers

Potential advantages

  • You stay in front of your customers

    Relationships and collections remain with your own team, with no third party involved in the conversation.

  • Confidential where available

    Subject to the provider's criteria, the facility can operate without customers being notified.

  • Generally lower service fees

    Because the provider is not running collections, service charges tend to be lower than for a comparable factoring facility.

  • Scales with turnover

    Availability is driven by your ledger, so a growing business can typically draw more as it invoices more.

Things to consider

Invoice finance is not right for every business. These are the points we talk through before anyone approaches a provider.

  • 01

    Higher expectations of your systems

    Providers will want confidence that your ledger is accurate and that collections are managed well. Reporting requirements are usually more involved than with factoring.

  • 02

    You still carry the collections workload

    The time and cost of chasing payment remain with you. If that is a strain, factoring may be a better fit.

  • 03

    Availability may not be universal

    Confidential discounting is not offered to every business. Provider criteria vary, and a broker can help identify where your profile is likely to be well received.

Discounting questions

  • No. Confidential invoice discounting is available from many providers, but it is subject to their assessment of your business. Some facilities are disclosed, and some businesses are offered factoring first and move to confidential discounting later.

  • Typically a regular ledger upload, reconciliations and management information. The precise requirements vary by provider. We will make sure you know what is expected before you commit.

  • Possibly. Provider appetite depends more on the quality of your processes and debtors than on size alone, though some providers do set minimum turnover levels. If discounting is not available initially, a factoring facility can be a stepping stone.

  • An overdraft is a fixed limit set by the bank and can be withdrawn. Discounting availability is linked to your sales ledger, so it tends to rise as your invoicing grows. Many businesses use it as a more scalable alternative or complement to an overdraft.

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