Factoring, Invoice Discounting and Bill Discounting are all ways of raising money quickly. But they aren't the same thing. In this article we'll explain how invoice discounting differs from factoring and bill discounting, as well as how these three options are used together by businesses that want to get access to working capital faster than traditional banks can offer.
What is Bill Discounting?
Bill discounting is when a company receives money up front for its receivables, usually via a loan or line of credit. The lender will value the receivables based on their age and probability of collection, then provide financing that covers this value.
Bill discounting is only available to companies that have a good credit history, cash flow and need access to capital quickly. The lender will discount your receivables based on their age and probability of collection, then provide financing.
