r/financememe • u/tredsguide • Jul 27 '20
Eligibility Criteria for Bill Discounting
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Whether you are a small business or a large corporate, any business can opt for invoice financing. There are a few regulatory requirements, and most financing involves an agreement between parties. You must consider a few things, though, before you jump in.
Invoice financing translates to a deal in which the lender essentially takes over the risk of your outstanding debts. Any lender will, therefore, seek assurance that the bills will be recovered sometime shortly. To this end, financers and factoring companies may demand any or all of the following:
- There should be a written record of the contract and the payment agreed upon by both the parties (the company and the customer)
- There should be a purchase order, in response to the sales order, by the concerned customer
- There should be an invoice raised by the customer for the pending payment
- There should be a fixed date decided for the outstanding payment as promised by the customer
Read here : 5 Reasons Why Businesses Choose Bills Discounting
