Bank Term Loans &
Invoice Discounting

Bank Term Loans &
Invoice Discounting

Term loans are provided by a bank & have long-term repayment plans – usually extending beyond one year. These loans often have fixed interest rates and give banks the option to allocate money similarly to how lines of credit are done. Business owners can use term loans from banks to borrow money as needed, and they are then required to make set payments based on the loan's balance.
It is possible to receive a secured or unsecured bank loan from a bank. Banks will demand collateral for secured loans, which might be forfeited in the event of late payments. The bank will usually ask to see the company's financial records, balance sheet, and business strategy in addition to researching the credit histories of the owners. 

Benefits of bank term loans
  • Unless you violate the loan terms, the loan is not repayable immediately and is therefore available throughout the duration of the loan.
  • Despite the fact that you must pay interest on your loan, you are not required to provide the lender a share of your earnings or a stake in your business.
  • For the term loan, interest rates may be fixed, allowing you to plan your repayments accordingly.

Invoice Discounting

In invoice discounting, you can get a cash advance from a lender by selling them your unpaid invoices in exchange for a portion of the invoice's value. The lender gives you the remaining sum after deducting their charge once your customer pays the invoice.
Small-to-medium sized firms may experience cash flow problems while they wait for consumers to pay their invoices. Invoice discounting steps in to help with that.
Businesses can access funds held in outstanding invoices immediately through invoice discounting. They can also access the value of their sales ledger.

Benefits of invoice discounting
Quick access to cash

Invoice discounting is a quick way to increase working capital and cash flow. In essence, as soon as each invoice is issued, you receive cash payment - for a sizeable fraction of the amount owed. This significantly helps you manage your cash flow, especially when you take into account the fact that without an invoice discounting facility, all you can do is wait for the other party to pay the invoice, which could happen at any time in the future.

No hassle of chasing payments

A business stays afloat by receiving the payments from it’s customers. The normal repayment period provided by businesses for bills is between 30 and 90 days. This means that your money is held in escrow until the client pays you. Most business owners already know how challenging it can be to convince customers to pay invoices on time. To save time and worry and free up your time to focus on managing your business, you can outsource invoice collection to a financing provider if you sign into an invoice discounting agreement

Bank Term Loans & Invoice Discounting

How can we at
Oxford Auditing help?

At Oxford Auditing we have established good repo with banks & financial institutions which enables us to provide the best consultancy & advisory services with respect to arranging term loans as well as invoice discounting facilities for the clients.