Supply chain finance gives you a revolutionary way of raising capital for small and medium enterprises who are in commercial partnerships with big organizations. Small business owners can raise capital and optimize their growth through invoice discounting.
Transactions under an invoice discounting agreement require the collateralization of your accounts receivable. It is an easy way to get unsecured finance through partnerships between buyers and sellers, instead of promoting unhealthy competition between them.
For example, usually, a buyer attempts to delay payments as long as possible, and a seller seeks early payments. Supply chain finance using invoice discounting offers both a win-win situation.
Invoice Discounting Services by LivFin
LivFin puts more money in the hands of business owners by allowing them to raise funds against their outstanding invoices. By doing so, a business owner can streamline his working capital without risking capital assets. Invoice finance for SMEs is getting popular in India and abroad. It is available for businesses with large commercial customers like automakers or FMCG giants.
Invoice Discounting Happens in Two Ways:
Purchase Invoice Financing: It’s a type of vendor finance. Suppliers can pick & choose the invoices they wish to encash, and LivFin advances payment for those invoices as a very-short-term loan.
Sale Invoice Financing: LivFin finances the invoices approved by your commercial partner. You can then repay the amount when the invoice is cleared by the commercial partner along with a small fee.
Things to Know about Invoice Discounting:
- Invoice discounting is not considered as a business loan. The finance is accommodated as an extension of the buyer’s accounts payable. So, you are not accruing any financial debt.
- Invoice discounting is not something that benefits only large companies. Unsecured finance via invoice discounting offers value for enterprises of all shapes and sizes, given they meet the financing requirements.
- In some cases, invoice discounting services from NBFCs like LivFin can fund up to 100 percent of the total invoice value.
Who can get invoice Discounting?
Invoice Discounting by LivFin is available for SMEs and large businesses in India. They cover a variety of sectors, including automobiles, electronics, manufacturing, retail, etc. The LivFin financial advisory team works closely with buyers and suppliers to create a customized business solution that benefits everybody in the supply chain.