Invoice discount finance is an arrangement in which the exporter assigns the receivables to obtain funds on a limited recourse basis or non–recourse basis. The purchasing bank typically funds the value of the receivables less discount to the exporter and receives full payment on the receivables from the importer.
This arrangement, which improves the exporter’s short–term liquidity position, could be used as an off–balance sheet treatment, subject to consultations with your local accounting, tax and legal advisors.
Benefits of Invoice Discount Finance
- Mitigate exposure against the importer or its country while increasing the transaction volume
Finance and accounting
- Secure additional funding sources
- Improve cash conversion cycle and working capital efficiency
- Improve the short–term liquidity position