Hylobiz| What is Invoice Discounting?

Invoice discounting or bill discounting is a popular practice that helps businesses to procure cash very fast.

4 min readMar 11, 2022


Businesses, especially the MSME businesses, often find it difficult to manage the balance of cash flow resulting in working capital impairment and poor business vitality. The unavailability of adequate funds is a noose and can be a serious roadblock for business growth. This can be appropriately handled by the invoice discounting process as it helps companies to get financed by using its unpaid invoices as collateral and is often preferred over a loan.

Invoice Discounting

Invoice Discounting Defined

Invoice Discounting or Bill Discounting is an invoice financing process that can effectively be used by businesses to get access to short-term funds and is opted as a substitute for a business loan.

In the Invoice Discounting process, a business borrows a loan from financial institutions against the unpaid invoices/bills. It is a short-term borrowing available from lending institutions. This helps the business liquidate funds to manage expenses.

Why is Invoice Discounting?

  • Better working capital
  • Help control current liabilities
  • Easy access to more credit amount
  • Liquid funds available for the purchase of supplies and goods and for repayment of business loans
  • Stronger business relations
  • No additional collateral is required
  • No need for chases for invoices
  • Quick and steady cash flow
  • Suitable for the businesses of all industries
  • Get access to more profit

Factors determining invoice discounting

  • Amount of funds required
  • Active client base
  • Total amount outstanding in the unpaid invoices
  • The goodwill of the business and the turnover it has

Invoice Discounting Process

A business sells goods on credit and raises invoices/bills/accountà Takes buyers approval before applying for invoice discountingà Applies in financial institutions for invoice discounting with the unpaid invoicesà The lender offers a percentage of the invoice amount as a loan after discounting the commission and service charges (called the discounting fees)à Finally, when the client(the business who is the purchaser) pays the due amount, the business can repay the loan to the financial institution.

Invoice Discounting Process

Fintech firms can help access finance by invoice discounting

Hylobiz is a secured fintech and a promising neobank supporting businesses to digitize their transactions and track their receivables and payables, payments, and collections. The platform caters to the B2B segment and plays a strong role in supply chain financing. Hylobiz is partnered with leading banks and NBFCs and is pre-integrated with top ERPs. Remain updated about our latest posts. Follow us on medium: https://medium.com/@hylobiz

Learn about Hylobiz partners: https://hylo.biz/partnerships-update-post-hylobiz-speaks-about-the-products-offered-by-bank-nbfc-partners-and-an-offer-to-collaborate/

Visit to find what Hylobiz offers to SME businesses: https://hylo.biz/offerings-sme/

Suggested read: https://medium.com/@hylobiz/how-is-fintech-determining-the-future-of-the-financial-sector-bd10f82ff074

Facilities on Hylobiz that can help avail of invoice discounting facilities

  • Easy ERP and account integration
  • Create/ upload and send proforma, sales, and final invoices via multiple communication channels
  • Automated reconciliations in real-time
  • Digital and quick onboarding
  • Technical support
  • Easy access to working capital
  • Cash flow visibility
  • Accounts receivable management and access to the status of invoices in realtime
  • Access to the online digital ledger
  • Real-time dashboard
  • Business health score

Hylobiz can help your financial details and transactions track well. The tracking of unpaid invoices helps you get access to credits through invoice discounting. Want to connect? Contact us

Digitization of invoice discounting can enable easy credit for every business. V Tap is a feature that enables financial institutions to support ecosystem financing.

Check out V Tap or Vayana Tap on the Vayana Network website.

Read more on Hylobiz features: https://hylo.biz/grow-with-hylobiz/.

Read Hylobiz blogs on https://hylo.biz/blogs/

Other Hylobiz highlights

  • ISO certified platform offering data encryption and 2-factor authentication
  • Certified by Visa International
  • Free subscription for a lifetime and free installation. Sign up for free and Book a demo
  • Low transaction charges
  • Automated reminders
  • Digital collections through payment links
  • Digital payouts
  • User-friendly APIs
  • Business loans through partner banks like Bajaj finance and Neobank credit Pvt Ltd

Avail business loans from Bajaj Finservà https://bit.ly/bajajfinservbusinessloans

  • Connected banking facilities and Pre-approved SME credit cards by partner banks

Suggested read

- to learn about pre-approved credit: https://bit.ly/PreApprovedCreditCardsForBusiness

-to learn about collateral-free SME loans: https://bit.ly/loanwithoutcollateralsecurity

-on things to know before applying for a business loan: https://bit.ly/35flzYQ

Let your business get access to automation and finance with Hylobiz. Reach us at: support@hylo.biz