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• 01 Feb

  Invoice Discounting Rates

  

  Invoice discounting rates are not uniform across all providers. Therefore, it is important to search the market for quotes before you commit to any single invoice discounting company.

  CHECK THE RATES FOR YOUR COMPANY

  Research we have conducted into pricing found an 86% rate difference between the most expensive, and the cheapest invoice discounting companies. This could make a significant difference to the amount that you pay each year. Should you choose a more expensive provider, you could end up paying a lot more.

  Invoice Discounting Rates

  Typically, invoice discounting is charged via three types of fees:

  1. An administration charge (or admin fee) - which is a percentage of the turnover discounted.
     
     
  2. A discount charge (or fee) - which is normally a daily rate charged on the funds that you use. It works in a similar way to interest rates on a loan.
     
     
  3. Other fees - these can be for extras such as audits or overpayments.

  In some cases, the fees can be rolled into one "single fee" for simplicity. However, beware as this often comes at a premium over the segmented pricing model described above.

  Examples Of Prices

  We have put together, and regularly update, a list of typical pricing for invoice discounting. It is based on the approximate size of the business. In practice, you need to get a quote for your business, based on your trading numbers, as the rates will be tailored to your circumstances.

  Prices can also be affected by the sector within which you trade, the nature of your debtors and your financial position. The nature of the product that you require will also be a factor in setting the fees. For example, if you want to add on bad debt protection (PID - Protected Invoice Discounting) this will attract a premium on the admin fee.

  How Fees Are Broken Down

  Again, we have conducted some research into how the overall fees can be broken down into their component parts (we ignored "other fees" for this study). We found that admin fees accounted for 59% of invoice discounting charges (on average). This ranged from 49% up to 66%, with the remainder being the discount charge. The average was 69% for PID.

  By Glenn Blackman