Finance Companies in India
How do Invoice Discounting Companies improve your
What is Invoice discounting? Let me try to explain this business term by a little example. Friends,
Mr. Ramesh was a well-known, respected and reputed businessman. His company was one of
the leading MNCs in the country. He was receiving orders every other day, and due to the large
size of his business he receives the payment usually after a long term, not least because he
offers the credit limit of three months to his clients. Huge orders were becoming very irregular to
him and he could not possess money to procure raw material for the new orders. Now, this
situation was really a tough one. But he always had a solution of his problems which is why he
was a leading businessman and running a top Multinational Company. In his worse situations,
Invoice Discounting literally helped him way more than expected.
You people might not be aware of this unusual term, so let me tell you about this. It is a basic
practice which uses the accounts of reputable companies whose creditworthiness is really good
and the companies which can be trusted for a loan purpose. The finance company is usually
responsible for financing the unpaid amount owed by reputable companies to their vendors. The
finance companies provide the small business vendors with the amount whatsoever they need
and the amount of money is generally less than the number of outstanding receivables. The
amount given by the Finance Companies is generally 80% of the amount of that invoice which is
retaining the period of fewer than 90 days.
I hope you have understood the term Invoice discounting with the above example. Let us see
some of the basic benefits of Invoice discounting 1) It is very helpful to speed up the processes of cash movements in the company. You can
raise cash whenever you need. And all you need is your reputable company and its very
2) The second major benefit of this discounting is that you don’t have to wait so long for the
clients to give you the payment within their credit terms. You can receive cash instantly
then and there when you issue an invoice.
3) This is most important whenever you need working capital for your day to day business
expenses. The invoice discounting mechanism allows you to be given a limit, very much
like an overdraft, or a cash credit facility, allowing you to draw down using your invoices
up to the amount specified in the limit.
4) You only pay for the finance as and when you use the invoice discounting limit. It is not
like a working capital loan of a term loan, which requires you to pay EMIs every month on
the amount lent, regardless of whether you are using the funds or not.
5) Your need of instant cash is covered by Invoice discounting companies which help you
to receive instant cash.
MarketFinance India allows Invoice discounting, Bill discounting and many such things. To know
more about Finance Companies in India, please visit HERE: http://www.marketfinance.co.in/
(+91) 96638 88033
G2, Regal Manor, 2/1 Bride St, Langford Town, Bangalore - 560025