We reviewed the questions we get asked most often and compiled this Frequently Asked Questions list. If you can't find an answer to your question, why not ask one of our team.
How Invoice Discounting works is quite simple. It allows your business to release cash against your outstanding customer invoices before they are paid. This means you won't have to wait for your customer's payments to land in your bank account so you can deal with your commitments quickly or build working capital for investment.
While Invoice Factoring and Invoice Discounting might seem the same, there actually is a big difference.
With Invoice Factoring the responsibility for collecting payments and sales ledger management will be undertaken by the funding provider. With Invoice Discounting the responsibility for collecting payments and managing the sales ledger remains with you and your team. As we have no direct contact with your customers Invoice Discounting is completely confidential so your customers need never know you are using an Invoice Finance facility. This difference makes Invoice Discounting a more attractive arrangement for businesses who have an experienced in-house credit control function.
If you would like to learn more about Invoice Factoring vs. Invoice Discounting, download our Guide to Invoice Finance.
Invoice Discounting is ideal if your business has customers on long payment terms (30-90 days). It is used mostly by organisations who have an established finance teams and dedicated resource for collecting payments from customers.
Invoice Discounting gives you fast access to cash you’re owed, helping to improve cash flow so you can run your business smoothly and efficiently while building working capital. Unlike a traditional overdraft or loan, it grows in-line with your turnover making this model of commercial funding a flexible solution for managing your cashflow.
It is also perfect if you want to extract the cash value of your customer invoices without your customers knowing your are using our funding.
Because Invoice Discounting is secured against your invoices there may not be any need for additional security to obtain funding, however we do carry out our own due-diligence to assess the level of risk. The nature of Invoice Discounting means there is a higher level of risk than with Invoice Factoring so we need to ask more detailed questions about your business and key customers.
Every business is different. We'll work with you to make sure the funding you get is exactly what your business needs. This means that the length of time to have everything in place can vary depending on how complex your business situation is. We work flexibly from the point of meeting you to understand your business needs. In an ideal world, your facility can be in place in a matter of days, however this also depends on the speed in which we can access the information we need.
Like any financial arrangement there is a bit work required at the beginning but after that, any facility arranged will grow as your business grows. After your initial contact with us there will be a confidential discussion with one of our specialists. They will get to know you and your business and arrange a face-to-face meeting. Once we understand the requirements of your business, we will provide an indicative offer to you. Following a new business review and consideration by our credit committee, we will then be able to make you a credit offer. If you choose to work with us we’ll arrange an on-boarding meeting for you after which you may begin sending invoices to us and we will start releasing funds for you to use.
If your customer doesn’t pay within the agreed period, also known as the recourse period (usually 90 days), Bibby Financial Services will return the invoice you and any funding secured against it will need to be returned unless covered by debt protection. You will have the option to protect against circumstances like this with Bad Debt Protection from Bibby Financial Services.
Every agreement and facility is different. The cost to your business will depend on your needs and the services you choose to use. If you would like discuss how Invoice Discounting would work for your business call us on 0808 501 6630 or request a call-back and one of our specialist team will be in touch.