What it is
Invoice discounting, in plain words
Also called debtor finance or invoice finance. The funder advances part of the invoice value before your customer pays, and the facility is settled once your customer (the debtor) pays. Depending on the funder, this may involve a cession or purchase of your receivables. It is tied directly to real, issued invoices, not a general assessment of the business.
May not suit you if…
- Most income isn't invoiced to other businesses (card or cash sales instead)
- Only one or two large customers, concentrating the risk in a way some funders price differently
- The money is needed for something not yet reflected in an issued invoice, like equipment or stock
What you'll be asked
- Who we can help
- Registered companies (Pty Ltd or CC) trading for at least 12 months, with funding from R50,000. A Merchant Cash Advance also needs annual turnover of R600,000 or more; other funding types have their own criteria.
- Asked first
- How you're paid, how much you need, what it's for
- Asked later, if you go ahead
- Bank statements, company documents, ID
- What they'll never ask for upfront
- Money before any funding is paid out