A growing number of companies are using invoice discounting services when they need to raise money quickly and unlock the value in unpaid invoices. There are many reputable companies on the market that can help you if you suspect invoice discounting could be for you. So, what is invoice discounting? Explained simply, invoice discounting involves borrowing money against an unpaid invoice and settling your debt with the financier once you have been paid. You remain fully responsible for chasing up the money and contacting the client yourself. Invoice discounting could be the right choice to make if you have a positive relationship with your client, expect to sell products and services to them again in the future or simply need to access the money early despite the invoice not being overdue.
Has your Invoice been Ignored?
If you have struggled to get paid, you don’t think the client will be buying from you again, you don’t have the time or resourced to pursue payment yourself and don’t mind the client knowing you’ve used a third-party, invoice factoring may well be for you. With factoring, you sell your invoice to a finance company who then chases up the payment themselves. Both factoring and discounting can give you the cash boost you need to keep your business moving, help you settle your own debts and take advantage of any investment opportunities you may have been presented with.
Reach an Informed Decision
It could be wise to speak to a number of invoice finance companies and find out what they have to offer before you come to a final decision. Whether discounting or financing is right for you will depend on your current circumstances. You may wish to take your relationship with the client into account before you make your final decision.
