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Factoring

Invoice discounting and cheque discounting products are becoming increasingly popular, with services being offered by both mainstream commercial bank and finance companies. These products are used globally by companies to improve their cashflows. With inflation rising, and late payment by clients a continual challenge, many businesses especially SME’s have their finances squeezed which in turn hampers their growth. Alleviating these funding issues through invoice finance is becoming an ever more viable and attractive solution. Al Hail Orix has been providing financial solutions to various industries over a decade, offering facilities ranging from lease financing, invoice discounting, cheque discounting as well as traditional business loans. Invoice discounting, and post dated cheque discounting, allow you to unleash the value of your sales receivables ledger, thereby unlocking the potential of your current business, and facilitate future business growth and expansion. It also helps in better management of sales ledgers and assist in collection activities.

What Is Invoice Discounting?

Invoice discounting allows a business to draw money against its sales invoices before the customer has actually paid. To do this, the business borrows a percentage of the value of its sales ledger from us, effectively using the unpaid sales invoices as collateral against the borrowing.

Key Features of Invoice Discounting

  • Sales Ledger (Receivables) Management

  • Reduce Administrative Costs
  • Improve receivable turnaround
  • Improve accounting
  • Generates MIS specific to buyers – reconciliation time is reduced

Collection of Receivables (Dunning)

  • Follow-up on payments by buyers
  • Reminder service to buyers in case of delay in payment
  • Pick-up service from buyers’ door step a possibility

Financing/Funding (Prepayment) against Invoices

  • Elimination of long billing cycles
  • Flexible cash flow to meet working capital requirements
  • No new debt created – preservation of key financial ratios
  • Scope for additional business and payoff of suppliers

Benefits of Invoice Discounting

  • Finance up to 90% of the value of Receivables.
  • Credit Period is aligned with the debtor’s payment cycle
  • Credit primarily based on the quality of receivables and paymaster
  • Off-balance sheet borrowing, keeps the key financial ratios better
  • Releases cash locked in receivables
  • No collateral security is required
  • Debt collection service is provided
  • Regular MIS reports specific customer wise
  • Credit and Collection functions outsourced

What Is Cheque Discounting?

Cheque Discounting is a short term financing mechanism. The client provides postdated cheques to the financial institution issued by their customer which are discounted and funds are dispensed immediately. It is the most convenient way of conversion of instant payment from long awaited receivables.

Key Features of Cheque Discounting

  • Sales Ledger (Receivables) Management

  • Systematic Report generation & maintenance of records
  • Business Forecast
  • Procurement planning

Financing/Funding (Prepayment) against Post dated cheques

  • Flexible Cash flow
  • Elimination of long billing cycle
  • Easy cash with minimum documentation

Benefits of Cheque discounting to the client

  • Credit is primarily based on the quality of receivables and paymaster.
  • Finance up to 90% of the value of cheque
  • Off-balance sheet borrowing, maintenance of the key financial ratios
  • Releases cash locked in receivables
  • No collateral security is required