If you're a small business owner, you probably know all about the financial challenges that come with running your own company. For example, it's not uncommon for small businesses to have to wait weeks or even months to get paid by customers. Luckily, invoice discount finance can help solve this problem. Here's everything you need to know about how it works and whether it's right for your business:

What Is Invoice Discounting?

Invoice discounting is a form of short-term finance that allows you to access cash in your business. It's also known as invoice factoring or invoice finance, and it's one of the most popular ways for small businesses to raise money.

How does it work? When you sell on credit terms with an invoice discounting provider, they'll buy your invoices at a discounted rate -- usually between 80% and 90% of their face value -- which means you can get immediate access to working capital without having to wait until the customer pays their bill (which may never happen).

How Does Invoice Discounting Work?

Invoice discount finance is a form of factoring that enables you to get funds against your unpaid invoices. It's a flexible working capital solution, which means that you can use it to fund any kind of business.

Invoice discounting is cheaper than bank overdrafts and can provide more money than traditional business loans; this makes it an ideal solution for growing businesses looking for funding in order to expand their operations or purchase new equipment.

A flexible working capital solution.

Invoice discounting is a flexible working capital solution. It allows you to access funds quickly and use them to pay bills, invest in your business or purchase equipment or premises.

You can also use the money for any other purpose that helps your business grow and thrive.

Could help you to grow your business.

Invoice discounting can help you grow your business. The process of invoice discounting allows a business to secure finance for its invoices, making it easier for that company to pay its suppliers and therefore increase the volume of goods it sells as well as expand into new markets.

This is because once an invoice has been paid by the bank on behalf of a customer, it has access to funds immediately (even though those funds are then deducted from their account). 

This means that businesses using invoice finance will have more cash available at any given time than if they were using traditional bank loans or overdrafts - this gives them greater flexibility when looking at expanding into new markets or increasing their product range

Capitalise on your cash flow.

Invoice discount finance is a flexible working capital solution, which can help you grow your business and secure a future line of credit. It also allows you to capitalise on your cash flow by reducing the amount of money tied up in unpaid invoices at any one time.

Secure a future line of credit.

In addition to the benefits of invoice discounting discussed above, you can also use this type of finance to secure a future line of credit.

If you have an established relationship with your lender and they are confident in your ability to repay the loan, then they may be willing to offer you an agreement for additional funds at a later date. This will allow them to offer more competitive rates than would otherwise be available on standard loans because there's less risk involved on their part - if things go wrong, they know that they'll still be able to claim against any outstanding invoices (which are typically secured against).


If you are looking for a way to get your hands on some cash quickly, invoice discount finance might be the answer. The process is fairly straightforward - you sell your invoices to an investor or bank who pays you upfront in exchange for receiving the full amount of money owed by your customers later on in time (usually 90 days). This means that instead of waiting months before getting paid by clients who owe them money, businesses can receive their funds immediately from investors.