What is invoice discounting?

Invoice discounting is an invoice finance facility where your business’ unpaid invoices are used as collateral for a loan. Invoice discounting falls under the umbrella term ‘accounts receivables finance’ which is funding received for your business based on invoices you have issued but where you have not received payment.

What’s the main benefit of invoice discounting?

Invoice discounting improves your cashflow. If you have supplied goods for a large contract, you may be waiting for the payment for 90 days. If, during that time, you receive another large order, you may not have the cashflow available to purchase the raw materials in order to supply that order. This will restrict the growth of your business.

How does it affect my working capital?

Invoice discounting is a source of working capital finance. It offers your business flexibility with you deciding which invoices you would like to finance (there is no requirement to commit your total sales ledger.) It can effectively release funds tied up in unpaid invoices and help your business continue to trade and profit.  

How can Wharf Financial source funding?

Wharf Financial Services can source funding against both ‘application for payment’ and ‘payment certificates’. This ensures you can access capital when you need it and concentrate on running your business.  

What are the benefits of sourcing funding through Wharf?

By sourcing funding through Wharf Financial Services you will receive access to experienced commercial brokers who can ensure the funds are secured quickly. Our brokers have close links with major invoice discounting suppliers and an in-depth knowledge of property development and related sectors. This enables us to source the funding to best sort your needs. With improved, predictable cashflow, you will be able to look ahead for your business and manage your growth.

Which industries can be helped by invoice discounting?

Invoice discounting works well for the construction, logistics, manufacturing, printing, recruitment, transport and wholesale industries, to name a few. 

What are the costs?

Businesses usually pay a percentage of the invoice amount to the lender as a payment for borrowing the funds. Wharf will always seek out the most cost-effective product, and we will offer to review as the business grows to ensure that this remains the case.

Is the finance visible to my debtors?

Confidential Invoice Discounting offers the same structure and benefits of Invoice Discounting, but the facility is structured so that the finance secured is invisible to your debtors.

If you have questions about how invoice discounting and/or confidential invoice discounting can work for your business please get in touch.