Bill Discounting

It is a short-term financial instrument to traders/Retailer/Dealer, wherein they can sell unpaid invoices / outstanding invoices to a financier / Lender / a bank, that agrees to pay the company for them at a future date.

The Bank / Lender will purchase the bill / outstanding Invoices before its due date and credits the bill’s value after a discount charge to the customer’s account. This process is also known as “Invoice Discounting” and “Factoring” also.

The Bank / Lender will realize the such bill amount on the bill’s due date directly from the debtor. This helps the traders / Dealer to optimize their cash flows and business payment cycles without disturbing their financial credentials. usually, Lenders will offer tenors of up to 180 days and the % of Bill Discounting Amount, commission charges, other charges will depend on the borrower and its debtors’ credentials. This financial instrument designed to speed-up Payments and increase cash flow without disturbing the balance sheet.