Even if you are not an experienced businessmen who knows everything about businesses and knows the remedies that can be done to everyday business problems, by going through the following details you will gain enough information about a financial strategy named single invoice discounting which is also called as selective invoice discounting that you can use for your business during hard times like late payment problems or in times where you experience unavoidable damages to your business.
Why it’s better than a bank loan
The strategy of selective invoice discounting is a simple plan that saves your skin and provides funding without letting you undergo frequent verifications and questionings unlike banks which asks you a load of questions. When obtaining this particular plan you will not be asked for your earnings/ histories of incomes or any other documents which the banks will want you to turn in to them.
It’s also very quick; you can have your required cash deposited within a short time of under 24 hours. To qualify for such a plan you only need to be a reputed company that sells goods and services to customers, and have valid invoices and agree to their fee structures.
The main advantage of using it
Selective invoice discounting works similarly to spot factoring but it helps you to have more control on your sales ledgers. Here you sell the individual invoices to a third party to raise the working capital like in spot factoring but the main difference that exist is you sell it for a discount not for the full amount. So it is an ideal method to deal with large single orders.
The process of the plan
Once you provide the goods to your customers and sends them invoices online, then you send the invoice details to the invoice discounting company. After that the company considers the invoices and checks for their validity. After that the company deposits funds equal to a certain percentage of the invoice you sent them and that’s mostly in the range of 70 to 90%.
Once the customer pays the company subtracts the money they lent you plus the service charges from that amount and makes the remaining sum available to you and terminates the contract that existed between you and the company.