Confidential Invoice Discounting
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What is confidential invoice discounting?
Confidential invoice discounting (CID) is a type of invoice finance that is not disclosed to your customers. This means that, unlike invoice factoring, your customers are unaware when you’re using an invoice discounting facility.
CID is a type of business finance that allows you to borrow money against the invoices that you have raised to customers, but are not yet paid.
In most cases, funds can be released against each invoice that you raise, as they’re raised, and usually within 24 hours.
This type of product ensures your debtors are never made aware of your borrowing and your credit control function will continue to chase payments as normal.
How does it work?
It works by releasing funds against your unpaid invoices as soon as they’re raised.
The process is simple; it works as follows:
- You raise an invoice to your customer – Raise your invoice to your customer as you usually would, but share a copy with your confidential invoice discounting provider.
- Receive up to 95% of the invoice value – Your financier will release up to 95% of the invoice value within 24 hours of the invoice being raised.
- Chase payment as usual – As confidential invoice finance allows you to handle your own collections, you chase payment as you usually would.
- Receive the remainder of the money – When the invoice is settled, you receive the rest of the funds, minus any agreed fees and charges.
This process continues on repeat, and new invoices are raised and others settled. The facility can grow in line with your business and shrink during your quieter times.
Why choose confidential invoice discounting?
The main reason to choose confidential invoice discounting is to improve your business cash flow.
A CID facility can instantly improve your cashflow cycle and allow you to manage your business without being compromised by delayed payment terms.
In many industries, 30 day, 60 day or even 90 day payment terms cause significant cash flow problems and this is often further compounded by late payments.
A CID facility can resolve these problems and allow you to grow your business without always being short of cash.
Will I be eligible for a CID facility?
If your business operates in the UK, operates on a B2B basis and works on delayed payment terms of 30 days or more, there is a great chance that you will qualify for a CID facility.
We can help businesses across a range of different sectors as long as they meet the above criteria.
What are the advantages and disadvantages of confidential invoice discounting?
The key advantages are:
- Improved cash flow – A CID facility will have a strong positive impact on your cash flow due to the upfront prepayment against all invoices as soon as they’re raised.
- The service is completely confidential – A confidential facility means that your customers will be completely unaware that you’re using the service.
- The funds can grow your business – The increased cashflow can make growing your business significantly easier and more predictable.
- Maintain credit control function – As you handle your own collections, you can maintain full control of the relationship with your customer. Where appropriate, the collections process can even give you a good opportunity to push for more business.
What is the best way to raise finance for my business using a confidential invoice discounting?
The best way to raise confidential invoice discounting for your business is through the ABC Finance invoice finance comparison tool.
Our online platform allows you to compare offers from all the leading lenders in minutes, without the need to sit through endless sales calls.
Instead, you simply input your business details and your requirements into the system (it only takes a few minutes). Once input, the market’s leading lenders start competing for your business, offering their most competitive terms in an attempt to win your business.
Once you’ve found the perfect deal for you, simply click a button to take forward your application.
