Invoice Discounting

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Invoice Discounting

Invoice discounting is post sales funding meaning that funding should happen once sales has been done and goods / services delivered.

Why is it required?
A vendor supplies goods to a large company (customer) and raises an invoice on the customer to make the payment. Many a times, customer is offered credit period and customer pays after 60-90 days to the vendor. During this period, vendor is out of money and it needs funds to make payment for raw material, salaries etc

Invoice financing can be classified basis the type of invoice that is being discounted

Sales Invoice Financing (SIF) –
A seller approaches the financier to discount the invoices raised by them on buyer / customer and requests the financier to pay him upfront on behalf of the Buyer. On due date of the invoice, Buyer makes the payment directly to the financier or through seller. Mostly (not always) seller is a SME or vendor supplying to a large company like HUL, ITC, Maruti etc, financier takes credit comfort that the customer would pay on time. In SIF, vendor is approaching the financier.

Purchase Invoice Financing (PIF) -
A buyer approaches the financier to discount the invoices raised on them by the seller and requests the financier to pay seller on his behalf. Financier takes entire recourse on the buyer. In such cases, buyer is managing its trade payables by line of credit. In PIF, large company is approaching the financier.

Benefits to Investor

  • Opportunity to earn high fixed return in a short period of time
  • Form of working capital finance hence less risky as company needs constant funding to run the business
  • Short tenor product and funds can be parked in for few months (1 Month – 6 Month)
  • Unlike equity / mutual funds, investing via lease isn’t controlled by market sentiment
  • Allows small ticket size investments
  • Secured funding backed by invoice

In collaboration with JIRAAF, we offer an investment platform that offers curated investment opportunities in alternate investment products with a low minimum investment amount and fixed returns

To start investing in Invoice Discounting, please click on the link shared below or Call/WhatsApp us on 9830859375
https://www.jiraaf.com/signup?referrer=SK4350