Bill Discounting

Bill Discounting is a major trade activity in which the unpaid invoices of a corporation that are supposed to be paid at a future date are sold to a financier (a bank or financial institution). In exchange for a discount or small fee, it allows the sellers to get funds earlier for working capital financing. It also assists the bank to earn some revenue.

Bills are discounted by charging a discount/fee that a bank takes from a seller to unlock funds before the credit period expires. The seller's client pays the entire amount to the bank at the due date. For both the seller and the buyer of the goods, discounting of bills of exchange is a win-win scenario as the buyer receives a credit period against the letter of credit and the seller receives his advance payment. It is often applicable when a buyer buys goods from the seller, and the payment is to be made via a letter of credit, also known as LC discounting.

This leads to fewer administrative charges, fees, and interest. The interest and fee are determined based on the buyer's probability of non-payment, so a funder will look at the customer's creditworthiness and trading background rather than the company it is funding for payment. The interest rates of bill discounting are decided based on many factors such as the risk factor, the financial institute.

Advantages of bill discounting are:


There is no requirement to keep any asset as collateral.


Bill discounting is a more efficient, faster way of assessing working capital because it is hassle-free and does not involve the lengthy documentation procedure.


It helps in saving tax liability.


It rejuvenates businesses' cash-flow in-turn helping them stabilize growth and fund business expenditure.

Advantage of Bill Discounting Services from Finnova Advisory

Finnova Advisory offers Bill Discounting assistance. We have formed alliances with numerous banks and financial institutions to provide a wide range of lender options. According to your eligibility and financial requirement, we recommend quick processing, competitive interest rates, and multiple collateral options to ensure that this is the best option for your business. We also deal with private, PSUs, co-operative banks, and NBFC’s.

Along with this, our team of specialists takes pride in offering unbiased advice to our customers regarding our services. Acting as a mediator, we are readily available to help you apply for corporate finances service from some leading banks and financial institutions.