bank or financial institution before it gets matured, at a price which is less than its par value. Having purchased the receivables the factor finances, money to them after deducting the following: An appropriate margin (reserve interest charges for the financial services. Table of Contents, definition / Meaning of Bill Discounting or Invoice Discounting. In short, bill discounting, implies the advance against the bill, whereas factoring can be understood as the outright purchase of trade debt.
What is bill discounting?
Bill Discounting hsbc India
Bill Discounting versus Invoice Factoring Trade Finance Global
Invoice Discounting or Bill Discounting or Purchasing Bills
Types OF bill discounting Bill discounting is applied on Bills of Exchange and hence, it would be a whole lot better if we focused on the types of Bills of Exchange. Which is appropriate for you? A financial transaction in which the business organization sells its book debts to the financial institution at a discount is known as Factoring. Invoice finance is more attractive to a bank as it relies on the invoice unpaid security from the debtor. The buyer accepts the invoice. Invoice discounting is a major source of working capital finance as the limit of bank financing, due to the credit crisis.
Factoring or invoice discounting