Invoice discounting is a working capital solution that has become increasingly popular among businesses looking to improve their cash flow. This involves selling unpaid invoices to a third-party finance provider (like Finrock Capital), who then pays the business up to 75% of the invoice upon delivery and you will receive the balance of the invoice of 25% later, once your customer makes payment. Finrock then takes on the responsibility of collecting payment from your customers.
One of the key benefits of invoice discounting is that it facilitates business growth by providing the necessary cashflow to take advantage of new opportunities. This will allow, businesses to use the cash injection to invest in new equipment or technology, expand their product line, take on new orders or hire additional team members. Businesses will thus stay ahead of the competition and grow their market share.
In addition to helping businesses grow, invoice discounting will facilitate the management of cashflow more effectively. By receiving payment upfront for their invoices, businesses can pay their expenses on time and avoid late payment fees. This will help in building a positive credit rating, which will be beneficial when seeking additional financing in the future.
Finrock takes on the responsibility of collecting payment from the customers, which helps businesses avoid the time, frustration and expense of chasing down overdue payments, which in turn maintains the positive relationship between the business and their customer.
This powerful tool allows businesses to grow and manage their cash flow more effectively. By providing businesses with upfront funds and reducing the risk of late payments/bad debt, invoice discounting allows the business to remain competitive and achieve their long-term goals.
