Invoice discounting (“ID”) is a flexible and revolving working capital option for your company to fund its growth. Also known as debtor finance; simply put a facility lends you money against your invoices thereby converting up to 80% (i.e. 80c per R1) of your business’ existing trade debtors into cash up-front.
Companies in manufacturing, importing, distributing or supply-chain where there is a long cash conversion cycle or clients in a high growth phase where their business is not generating cash fast enough to fund the growth rate are suitable candidates for ID (book facility starting limit R3m).
Single invoice discounting can be a vital source of working capital finance for local SME’s to fund their corporate invoices or debtors on a selective basis. Broad-based black economic empowerment, preferential procurement and enterprise supply chain development are all driving the requirement for this type of funding.
Candidates should be profitable & solvent and in a position to upload data from their accounting system weekly. Facility costs are interest (linked to Prime) or fee based and only billed on the outstanding daily balance drawn down. Security including a sale & cession of debtors and limited surety of shareholders’ is required.