Why Invoice Discounting is Significant for UAE Businesses?

Chasing customers for prompt payment of invoices is a common issue faced by most businesses in Dubai. It is under such circumstances that businesses avail of corporate finance services in Dubai to get facilities such as invoice discounting. Availing invoice discounting facilities in Dubai helps businesses to navigate the challenge of waiting for their customers to pay the invoices.

When customers delay the payment of invoices it hurts the cash flow of a business. Corporate finance facilities in Dubai such as invoice discounting allow businesses to instantly access the cash tied up in unpaid invoices and tap into the sales ledger. If this facility seems to be what your company needs now, consult with corporate finance companies in Dubai. You can delve deeper into the features of the invoice discounting facility by reading ahead:

What is an Invoice Discounting Facility?

Invoice discounting is a key pillar of corporate finance services in Dubai, which saves businesses from the risk of late-paying customers. An invoice discounting facility in Dubai allows you to avail of a short-term loan from a lender that provides the facility. You can get a great percentage of the value of the invoice as a loan and that too within a matter of weeks. You can pay back the loan once you receive the payment from the customers. Corporate finance firms in Dubai can easily arrange invoice discounting facilities from reliable lenders.

How does Invoice Discounting Work?

Invoice discounting, for convenience, can be compared to having an overdraft facility or even to a series of short-term loans secured on a company’s accounts receivable ledger. The following points will illustrate how an invoice discounting facility works:

  1. A company sells goods or services to its customer as usual
  2. The company raises invoices on the goods or services and sends them to the customer
  3. The company sends the invoice to a third party which is the provider of invoice discounting facilities in Dubai (lender)
  4. The lender then buys the discounting receivables from the business and issues funds at a certain percentage of the face value of the invoice
  5. When the customer makes a payment, you can repay the loan to the invoice discounting provider, plus an agreed fee to cover costs, risk and interest

How Do You Know if Invoice Discounting is Right for Your Business?

A diverse range of corporate finance options is available in Dubai to meet your funding requirements. However, not all of them are ideal for your current business requirement. You can consult with providers of corporate finance services in Dubai to determine whether invoice discounting is the best fit for your business requirement. The invoice discounting facility in Dubai is ideal for businesses that check the following:

  1. You have a robust and effective credit control procedure
  2. The bad debts in your company are minimal
  3. Customers have a minimum of 30 days to pay your invoices
  4. Most of your customers pay without much delay generally
  5. You can meet the minimum turnover requirement by the lender
  6. Your customer should have a reputation for being prompt at paying back

What is a Confidential Invoice Discounting?

Invoice discounting is also referred to as confidential invoice discounting. None of your customers is required to know you are using the services of an invoice discounting provider. The advantage of confidentiality also means that you can still chase the customer to make the payment.

What Are the Advantages of Invoice Discounting?

Invoice discounting offers a wide range of benefits for businesses in Dubai, irrespective of their size. Moreover, the assistance of corporate finance firms in Dubai will help you to access these benefits without any hassle. We have listed below some of the key advantages of applying for invoice discounting facilities in Dubai, UAE:

  1. Businesses will get paid quickly
  2. Cheaper and simpler than traditional financing models
  3. Invoice discounting boosts the cash flow of your business
  4. Businesses without high-value assets can also obtain funding through invoice discounting
  5. Invoice discounting is available for both SMEs and big businesses

How to Apply for Invoice Discounting in Dubai?

First, you need to decide whether you want to discount your entire accounts receivable ledger or specific invoices. The first method is sometimes called whole turnover invoice discounting and the second is generally known as selective invoice discounting. Once the decision has been made, contact the best corporate finance companies in Dubai who can take your requirements to reputed lenders.

Consult with the Leading Providers of Corporate Finance Services in Dubai

Invoice discounting is one of the widely used facilities provided by corporate finance firms in Dubai. Availing invoice discounting in Dubai allows you to minimise the risk of late-paying customers and boost your company’s cash flow. However, corporate finance services in Dubai provided by Jitendra Chartered Accountants (JCA) help you to access invoice discounting facilities hassle-free.

JCA is one of the leading corporate finance companies in Dubai providing all types of facilities including Letters of Credit, Bank Overdrafts, Trust Receipts, Bank Guarantees, Project Finance, Cheque Discounting, Business loans etc. Get in touch with our dedicated professionals to obtain the corporate finance solutions you can count on.