Mr. Naresh runs a small business of manufacturing furniture. He recently bagged a huge order from a local government office. According to the payment terms, the customer will pay him only after 90 days. Now, he has received another big order from a school.
The problem is — he doesn’t have the funds to procure raw materials for the second order. He will lose the second order to his competitors if he doesn’t deliver it on time.
This is where — Invoice Discounting comes into the picture.
What Is Invoice Discounting?
In invoice discounting, the borrower uses a customer invoice as collateral to avail funds. Also, known as invoice financing, it’s an alternative to taking business loans. When the borrower provides the customer invoice to the lender, the lender disburses funds up to 90% of the outstanding invoice value.
Once the borrower, gets the payment for the invoice from the customer, he/she can pay the borrowed amount to the lender.
In the example mentioned above, Naresh can raise the first invoice to the lender and avail the funds. He can then use these funds to procure raw materials for the second order and get started on it. Once the first customer pays the outstanding invoice, Naresh can repay the loan to the lender.
Benefits Of Invoice Discounting
● Helps you manage fluctuating cash flow.
● It’s an easier alternative to traditional business loans.
● Provides you with instant access to cash.
● More flexible than an overdraft or business loan, as you can alter the loan amount according to your real-time business requirements.
● You are in complete control over the repayment schedule.
What To Expect From Invoice Discounting From Leading Digital Lenders
Digital Lenders like Indifi, offer invoice discounting to businesses. You can use this method to get up to 90% advance against your outstanding customer invoices. Here are the advantages of choosing invoice discounting with top digital Lenders like Indifi,:
● Fast Funding — No waiting. Once you submit the required documents along with outstanding client invoices, you are provided with the funds quickly.
● Hassle-free experience — They provide you with an easy-to-use digital interface. All you have to do is fill in the online application form, furnish the necessary details and click “apply” to start the process.
● Real-time support — They offer extensive customer support — via mail, call or online chat to provide assistance with every step of the way.
● No need for collateral — Your outstanding customer invoices act as your collateral. There is no need for any guarantor or submitting assets. There are no hidden fees.
● Access to large funds — They offer funds up to 1 Crore INR with invoice discounting.
How To Apply For Invoice Discounting?
With invoice discounting, you can lower your cash worries and increase your access to fast funds. Click here to start the application process. Provide key details like your loan requirement, contact details, and other necessary documents. A loan support officer will get back in touch with you, to complete the process.