What is Confidential Invoice Discounting?
Confidential Invoice Discounting provides your business with:
- Funding - against your unpaid sales invoices and new invoices as you raise them
- Confidentiality - you collect your own sales invoices, so your customers are unaware
- Bad Debt Protection - is optional to protect against customers failing.
How Does Confidential Invoice Discounting Work?
Confidential Invoice Discounting (also known as CID), works as follows:
- The invoice discounting company provides you with a prepayment against invoices.
- An 85% prepayment against a £240K sales ledger could release £200K of funding.
- This immediate cash injection can be used for any purpose.
- You undertake your own credit control to collect your own sales invoices.
- Your retain all contact with your customers - they are unaware that you use CID.
- When customers pay, the balance of the invoice value (less charges) is passed to you.
- As you raise new sales invoices so new prepayments are made available.
- In this way the funding grows as your sales ledger grows.
The benefits are:
- Improved cash flow - you get an initial prepayment against all your outstanding invoices, and further prepayments against new invoicing.
- The funding grows with your business - as you raise more invoices the level of funding grows - unlike other forms of funding such as bank overdrafts, loans and crowdfunding.
- Customers don't know you are using the services, so your customer relationships are undisturbed.
How Much Cash Could CID Raise?
Find out how much cash you could raise with our free invoice discounting: online cash calculator. Bear in mind that prepayment levels vary between providers, some will prepay as much as 100% of invoice values (less a small charge).
What Does CID Cost?
There are two types of charge, administration fee (to cover the cost of running the facility) and discount charge which works in a similar way to interest on a loan. Examples of Costs for CID.
We can provide independent advice and a quotation search service.
Further Invoice Discounting Resources and Information
Below is a link to an invoice discounting case study, and other resources that you may find helpful: