Invoice discounting

Definition

Invoice discounting is a form of invoice finance where a business borrows against its unpaid invoices while continuing to collect payment itself. The lender advances most of the invoice value; the business retains control of its sales ledger and customer relationships.

In plain terms

Unlike factoring, discounting is usually confidential — your customers need not know a financier is involved, because you still send the statements and collect the cash. It suits established businesses with their own credit-control function.

Why it matters

Discounting releases working capital without disturbing customer relationships. See confidential invoice discounting and invoice factoring.