- Instrument
- Invoice discounting
- Raised by
- Supplier, with buyer acceptance
- Priced as
- Benchmark plus margin
- Requires
- Acceptance letter and bill of exchange
Why acceptance is the whole game
An unapproved invoice is a claim; an accepted one is close to an obligation. Receivable finance is built on that difference. Once the buyer has confirmed the invoice is good and payable on a date, a bank can discount it and look to the buyer at maturity rather than chasing performance disputes.
That is why this product asks for two things a plain invoice does not carry: an acceptance letter, in which the buyer confirms the debt and the due date, and a bill of exchange the buyer accepts. Together they turn a commercial receivable into paper a discounting bank can price.
Everything else follows from the invoice itself — amount, currency, due date, and the supporting documents that prove the underlying trade. On the platform each invoice carries its own document set and its own bidding, so the bank prices a specific receivable rather than a pool.
The shape of the flow
Acceptance is what makes it bankable. Once the buyer has confirmed the debt and the date, the invoice can be discounted.
How it works on TradeOrigin
Invoice by invoice, with the buyer’s acceptance attached and banks bidding the margin.
Raise the invoice for finance
The invoice, its due date and its document set are recorded — commercial invoice, transport document, purchase order and whatever else the bank requires.
Buyer accepts
The buyer signs the acceptance letter and accepts the bill of exchange, fixing the amount and the maturity date.
Banks bid the discount
Discounting banks quote benchmark, margin and fees against that maturity, sealed from each other.
Discount, then collect at maturity
Proceeds are advanced against the accepted terms; the buyer settles with the bank at maturity.
Who it is for
Waiting on approved invoices
Your cash is tied up in invoices your buyer has already agreed to pay. Discounting releases it without new borrowing.
Supporting key suppliers
Accepting an invoice early costs you nothing at maturity and keeps a supplier you depend on solvent.
Short-dated corporate exposure
An accepted invoice with a bill of exchange behind it is a defined obligation on a known date.
What you get
Cash against work already done
Financing follows the approval, not a new credit application.
A defined obligation
Acceptance letter plus bill of exchange give the bank something firmer than an open invoice.
Documents in one place
Every invoice carries its own document set, uploaded once and visible only to the parties on the deal.
Competitive margins
Banks bid per invoice, so pricing tracks the actual receivable rather than a blanket facility rate.
What the bank will ask for
Uploaded once, against the deal, and visible only to the counterparties on it.
Questions
Why is an acceptance letter required here but not under SCF?
Under supply chain finance the buyer sets up the program and stands behind it from the start, so the approval is structural. In receivable finance the supplier initiates against individual invoices, so the buyer’s acceptance has to be evidenced invoice by invoice.
Can this run as a program?
Yes. Where the same supplier and buyer trade repeatedly, a Receivable Finance Program avoids setting the relationship up again for every invoice.
Is the discounting with recourse to the supplier?
That is a term of the facility and is carried on the deal. Without-recourse purchases of longer paper are usually done as forfaiting.
Related
Receivable Finance Program
A standing arrangement for discounting a buyer’s accepted invoices, with the discounting bank already in place.
ProductSupply Chain Finance
A buyer-led program that pays suppliers early on the buyer’s credit standing, with no acceptance letter needed.
ProductForfaiting
Sell medium-term export receivables without recourse and take the risk off your balance sheet entirely.