Understanding invoice discounting and how the process works

Award winning invoice discounting provider in the UK.

Get a no obligation quote online or call us on the number below to have a chat with one of our invoice discounting experts.


What is invoice discounting?

Invoice discounting is an invoice finance facility when a company's unpaid invoices are used as collateral for a loan. Invoice discounting companies enable businesses to leverage the value of their sales ledger.

With an invoice discounting company, when sending out invoices to customers a proportion of the total amount becomes available from the lender, which provides your business with a source of working capital throughout the month while you wait for the payment of your invoice to be processed.

The benefit of invoice discounting is you maintain responsibility for your sales ledger as well as your payment chasing and invoice processing. The main difference between this method and invoice factoring is that your customer is not aware that you have taken on cashflow finance. If you prefer to keep the financial arrangement confidential from your customers then invoice discounting may be the right product for you.

You no longer have to wait up to 120 days to receive payment for your goods and services, and you remain in charge of your own credit control processes, meaning that you continue to chase late payments and therefore your customers are not made aware of our involvement.

You remain in charge of your own credit control processes, meaning that you continue to chase late payments and therefore your customers are not made aware of our involvement.


What are the advantages of working with invoice discounting companies like Novuna Business Cash Flow?

  • Flexibility - your funding line increases at the same rate as your turnover meaning that you don’t need to renegotiate terms.

  • Improved cash flow - release money tied up in unpaid invoices and boost your cash flow.

  • Bargaining power - Invoice Discounting can help you to negotiate better terms with your suppliers.

  • Faster growth -  grow your business at a much faster rate due to the flexible funding line.

  • Award-winning service - benefit from our award-winning client service.


Highly recommended by our customers

"The communication and support has been outstanding. Providing me with all the information I needed regarding new clients coming onto our books. The system they use is so user friendly and the drawdown payments are very efficient in the fast moving world of temporary payroll."

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Is invoice discounting right for my business?

Generally speaking, invoice discounting facilities are best suited to companies that sell to other businesses on credit terms and turnover more than £250,000 a year.

Expand your operations

Invest in stock, machinery or equipment

Employ new members of staff

Fix long-standing issues with cash flow


What are the main benefits of using invoice discounting companies?

Invoice discounting facilities allow medium-sized businesses to borrow money against the value of their unpaid invoices. Generally speaking, invoice discounting facilities are best suited to B2B businesses that offer long credit terms to their clients.

How it works:

Supply the Goods

Supply your clients with goods, and then invoice them as per your normal practices

Forward to us

Forward a copy of your invoices to a finance provider.

After 24-48 hours, your provider will release funds to match a pre-arranged percentage of the invoice’s value (normally between 70-90%)

You receive the money

When your debtor settles the invoice, your provider releases the rest of the invoice’s value minus a small service fee.

Are slow invoice payments causing you cash flow funding problems?


Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

What are the advantages of using an invoice discounting facility?

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The biggest advantage of invoice discounting is that it can significantly boost cash flow. Businesses up and down the country often struggle with their balance of cash, and much of the time this is not down to poor revenue, but late invoice payments by customers.

The idea behind all forms of invoice finance is that you no longer need to wait 30 days, 60 days, 90 days or even longer for your outstanding invoices to be paid. Instead, as soon as you’ve delivered and raised an invoice, your finance provider will pay you most of the value of the invoice, which is usually around 85%.

This cash is then free for you to use for whatever you need, whether it’s the typical monthly expenses, or to fuel growth. Once the customer pays the invoice, you also get the remainder of the value of the invoice, less fees and interest.

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Invoice discounting is often chosen as an alternative to other finance products because it’s an ongoing agreement that you don’t need to constantly renegotiate. Unlike a loan, the facility keeps on rolling for as long as you want to pay the account fee.

And as your turnover increases, your agreement will automatically change based on what you agreed at the beginning, such as with different fees and rates etc. Lots of businesses therefore choose to grow with their invoice finance agreement, and see it as an essential part of their financial plan.

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When compared with some other invoice finance products, and invoice factoring in particular, discounting carries the benefit of being entirely confidential.

Some other products will reveal that you’re using a finance company for your invoices to customers, but with discounting everything is kept between you and your factor. This is ideal if you’re looking to maintain relationships with customers, and feel that you have everything otherwise under control.

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Our final point is that invoice discounting is often seen as a less risky form of borrowing, because you’re not borrowing large amounts of money without a clear revenue source in mind. With invoice finance, the money being lent is directly against a specific invoice, which makes it a more manageable type of finance product that can be easily planned for.

However, as with any other financial agreement, it’s always worth seeking out the advice of an independent advisor before you decide if it’s right for your business.


Invoice discounting in the UK has been revolutionised with our digital onboarding process


Get cash from unpaid invoices with Selective Invoice Discounting

Selective invoice discounting is a means by which a company can finance its operations by receiving cash in the form of a loan from an unpaid invoice. A finance provider will lend the company a percentage of the value of the invoice for a fee.

The company can then have access to cash on its unpaid sales thereby improving its working capital and investment opportunities when cash flow is short or business is slow. It remains the responsibility of the company to issue the invoice to its customer and chase up payment.


Confidential Invoice Discounting Services

We supply Invoice Discounting facilities to companies working in a wide range of sectors around the UK, with a turnover of £250,000 or more. Invoice Discounting is a perfect solution for issues such as late payments and seasonal demand which can cause a strain on your company's cash flow and prevent you from reaching your growth potential.

Our Invoice Discounting facility will make the cash available quickly, leaving you to concentrate on running your business and not simply chasing invoices. You are able to utilise the money quicker to invest in assets and staff to help you secure new contracts or expand in to new areas. We are already supporting over 700 SMEs in the UK to reach their growth potential by using Invoice Finance to release cash tied up in unpaid invoices.

Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

Invoice Discounting FAQs

Is invoice discounting the right solution for your business?

Why choose Novuna Business Cash Flow

6 month trial period

A 6 month trial period so you can be sure the product is right for you, followed by a 6 month rolling contract – we don’t tie our clients in for long periods.

Digital onboarding

We are the first in the market to offer a digital onboarding process and have been leading the way with our digital capabilities allowing clients to sign up within 24 hours from the first appointment.

Client trust account

Once you become a client you will be given your own trust account, meaning you will get same day availability on your funds. You can also view all of your invoices and payments online at a time suitable to you, 24/7.

No uncleared effects

We have heavily invested in our digital capabilities. This includes the auto allocation of payments using Artificial Intelligence. Ultimately this advance in technology means that our clients access money quicker as well as saving money on interest charges due to auto allocation.

Simple pricing

We aim to make the process of Cash Flow finance as simple and straightforward as possible. Our pricing is very straightforward to understand. For a no obligation quote or an informal chat you can call our friendly team today on 0808 250 0859.

Award winning service

We offer award-winning client services and individual Relationship Managers who are on the other end of the phone or out in the field to visit you in person.


What our customers say

Are slow invoice payments causing you cash flow funding problems?


Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

Alternative invoice financing products from Novuna Business Cash Flow


Want to learn more about how you can boost your businesses cash flow?

Our Cash Flow Resource Hub has been set up to help SME's with cash flow finance advice, tips and resources to help with their cash flow position.

We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.

Complete this form online and get a no obligation quote

If your customers are consumers, please contact our consumer finance division.

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