Unlike traditional bank financing (where the focus is on clearing very specific financial hurdles), the focus with Invoice Discounting is the strength of your business model and the creditworthiness of your buyers.
Unlike traditional accounts receivable factoring where the factor takes over your accounts receivable, with Invoice Discounting by Lenders Commercial Finance you remain in control of your customer relationships.
How does Invoice Discounting work?
Once we establish an “Invoice Discounting Line Of Credit” for your company we partner with you in establishing Invoice Discounting Limits for each of your buyers. You submit the invoices you wish to finance via our secure internet-based invoice management system. Invoices representing goods that have been delivered or work that has been completed are funded within 24 hours by wire to your account.
How much do I receive for my discounted invoices?
We typically advance 90% of the net invoice amount up front and the balance when the invoice is collected.
Do I have to discount all my invoices?
No. We want to give you as much flexibility as possible in managing your cash flow. Not all buyers need to be discounted. You can hold invoices on buyers approved for discounting up to 10 days after delivery of goods (or work completion).
Can I payoff discounted invoices before they are collected?
Yes. You can “buy back” all or any part of your discounted invoices at any time and for any reason.
Is it expensive to discount my invoices?
We take a normal trade discount when you receive funding (typically 1% for each 10 days on original credit terms). Invoices that pay beyond terms are charged a convenient daily rate. The cost is higher than with bank financing but is in line with industry accepted trade discounts and discounts paid on credit card transactions.
Are charges based on the total invoice value or on the amount advanced?
With Lenders Commercial Finance all charges are based on the actual amount advanced to you. Other than pass-through wiring fees, there are no hidden fees or add-on costs as with most other financing programs.
Who is a good candidate for a Lenders Commercial Finance line of credit?If you are a small or mid-market business (SMB) with B2B trade A/R you can use your assets to qualify with LCF. You can generate funding now to grow your business, pay down other loans or obligations, and to take advantage of new business opportunities.
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