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The funding benefits of invoice discounting are as described within this guide and reference to this is recommended. This is a finance facility only and unlike factoring does not provide you with any credit management support.
Invoice discounting can be provided either disclosed or confidentially. In the majority of cases this is a confidential facility. Most factors providing confidential invoice discounting have qualifying financial criteria, including
that of the requirement for your company's gross (inc VAT) turnover being in the region of £400,000 per annum or more.
Your business will continue to invoice your customers as you have always done. Your customers will continue to make their payments directly to you and you will continue to chase outstanding and overdue payments. If the invoice
discounting facility is confidential then your customers will be none the wiser of the factors involvement. If disclosed your invoices will carry an assignment notice, but will mostly still require payments to be sent to you.
Customer payments that you receive are banked to your invoice discounting 'trust account' and not to your trading account.
In order to give the factor the ongoing comfort that the nature of your business gives them the security cover they require, for invoice discounting only the factor will physically audit your systems at your companies premises periodically.
This typically will occur every three months.
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