Invoice Discounting

Unlocking Cash Flow with Confidence

At Pinks Asset Finance, we understand that waiting for customers to pay their invoices can put a strain on your business’s cash flow. Invoice Discounting offers a solution by allowing you to access funds tied up in unpaid invoices, providing the liquidity you need to keep your operations running smoothly.

What Is Invoice Discounting?

Invoice Discounting is a financing method where you borrow against the value of your outstanding invoices. 

Typically, you can access up to 90% of the invoice value, with the remaining balance (minus fees) received once your customer pays. 

Unlike factoring, Invoice Discounting allows you to maintain control over your sales ledger and customer relationships, as the process is usually confidential.​

And here’s the exciting bit—some new products on the market now let you release up to 99% of your invoice value, with daily rates as low as 0.06%.

That’s fast, flexible, and fantastic for your bottom line. 

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Invoice Discounting solutions

How Does It Work?

Assessment

Step 1

We evaluate your business, industry, sales processes, and customer base to tailor the right solution.​

Application

Step 2

We assist in preparing and submitting applications to suitable lenders, ensuring they understand your business’s unique needs.​

Funding

Step 3

Upon approval and completion of legal formalities, funds are made available, and you can draw down as required.​

For example, if your business has £250,000 in outstanding invoices and an 85% drawdown rate, you can access £212,500 immediately. As invoices are paid and new ones issued, your available funds adjust accordingly.​

Costs Involved

Understanding the costs associated with Invoice Discounting is crucial:​

  • Fee: Charged on your turnover, this fee applies even if you don’t draw funds and usually includes a monthly minimum charge.​
  • Discount Rate: An interest-like charge applied only to the funds you’ve drawn.​

Additional fees may include setup charges, bank transfer fees, and refactoring fees if an invoice needs reassignment.​

Key Benefits

Improved Cash Flow

Access funds tied up in invoices to manage day-to-day expenses.​

Partnership Approach

Lenders often view this as a collaborative relationship, supporting your business’s growth.​

Flexible Payment Terms

Since the loan is secured against your receivables, there’s typically less personal risk compared to unsecured loans.

Reduced Personal Liability

Since the loan is secured against your receivables, there’s typically less personal risk compared to unsecured loans.​

Confidentiality

Maintain direct relationships with your customers, as they remain unaware of the financing arrangement.​

Eligibility Criteria

Invoice Discounting is suitable for businesses that:​

Have a track record of at least two years.

  • Operate on credit terms with other businesses.​
  • Possess a robust sales ledger.​
  • Have reliable customers with good payment histories.​

​Additional costs may include valuation fees, legal fees, and arrangement fees, depending on the lender’s terms.​

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Let's Discuss Your Options

Navigating the nuances of Invoice Discounting can be complex, but you don’t have to do it alone. 

At Pinks Asset Finance, we’re here to guide you through the process, ensuring you find the best solution tailored to your business needs. 

Reach out to us today, and let’s unlock the potential of your unpaid invoices together.​

In most cases, no. Confidential Invoice Discounting ensures your customers remain unaware of the financing arrangement.​

Once set up, funds can typically be accessed within 24 to 48 hours of issuing an invoice.

Responsibility for collecting payment remains with your business. However, some lenders offer bad debt protection options.​

Traditional Invoice Discounting covers your entire sales ledger. If you prefer to select specific invoices, Selective Invoice Finance might be more appropriate.​

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