Financial Services

Bill discounting

Bill discounting, or invoice discounting is the act of sourcing working capital from future payables. Furthermore, the seller recovers an amount of sales from the financial intermediaries before the due date.

How Bill Discounting Works?

Bill discounting in generally backed by Letter of Credit. Seller or exporter when they receive Letter of Credit in their favour, then they supply goods under the Letter of Credit to the buyer once the goods have shipped the documents are presented under the Letter of Credit to the issuing bank for the acceptances once the seller gets the acceptances, then he approaches bill discounting bank or any financial intermediary to discount it. The financing company verifies the legitimacy of the bill and creditworthiness of the buyer and deduct appropriate margin, discount and fee as per norms and funds the seller. On due date the financing bank collects the money from the buyer to 100% of the invoice. Who will collect the money is totally depend upon the agreement between the seller and the financing bank. Bill discounting is a post

shipment product that means financing bank will be able to discount the bill of exchange only after the shipment of the goods happens.

Benefits Of Bill Discounting

Get tailored bill discounting options to suit your requirement for short term finance, from the date of sale to the date of receipt of payment.

Save on interest rate costs and avoid the need to arrange for collateral on loans when you opt for bill discounting. Minimise delays on short term and working capital funding with our simplified processing, short turnaround times and single-window contact.