Invoice discounting, a simple form of invoice financing, has become a major source of working capital finance since the restriction of traditional bank financing.
Populous World’s invoice discounting process offers a range of potential benefits to businesses operating in all industries. Unmistakably, the main one is having a reliable source of working capital available to use throughout each month. This offers unlimited opportunities, not least of which is the chance to plan for growth in a sustainable way.
At Populous World, our invoice discounting solutions allow you to get an advance against your outstanding customer invoices — either on a selective or whole ledger basis. The process involves auctioning invoices to global investors, which provides invoice sellers a range of competitive offers and bids around the globe from individual investors.
The Populous World auction model appeals to a multitude of SME’s as it means they can select which customer invoices they would raise finance on, and would only incur fees when they need to use it.
Invoice finance is progressively becoming more attractive to conventional banks and has opened up a new wave of lending. This is because it depends on the collateral of the invoice due from the debtor. New, post-credit crunch bank capital regulations have resulted in banks transitioning companies away from unsecured loans and overdrafts and on to this mode of lending.
Populous World offers the most amount of flexibility where you can choose to discount the invoices based on your needs. A minimum number of invoices per month is not required and you can access our services whenever required.
How does the Populous World invoice discounting process work?
On a day-to-day basis, you send out invoices as work is completed or orders fulfilled. The pre-agreed proportion of each invoice is deposited to your bank account once a copy of the invoice has been received by the lender. The money can then be used to pay bills, company expenses, overheads, repay debt, or as part of a long-term plan for growth.
Producing invoices immediately after a service or sale of goods has completed is key to success with invoice discounting, as it allows for a regular influx of cash throughout the month, which allows for better financial planning. Once the agreed percentage of each invoice has been paid — generally around 95% of the total — and have your customer repay the invoice to ‘Populous World’ and the entire process is now completed.
When invoice discounting with Populous World, the minimum interest rate ranges from 4–5% discount per invoice depending on the company’s financial health on a 30-day term. However, the invoices are opened for bidders to bid on, and once the interest rate reaches the minimum of 4–5%, the auction closes and you will receive up to 95% of your invoice value. In the rare case that the bids are for a higher interest rate, you will be notified and you can choose to proceed with the rates of the auction closest to your minimum interest rate.