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What is Invoice Discounting? Here's Everything You Need To Know

What is Invoice Discounting? Here's Everything You Need To Know

Invoice discounting enables you to take out a loan using unpaid invoices as collateral. The loan amount typically ranges between 80% to 95% of the value of the invoices, which you will pay back (with interest) once you receive payment from your customers.
Written and published by
ET Wu

Invoice discounting enables you to take out a loan using unpaid invoices as collateral.


The loan amount typically ranges between 80% to 95% of the value of the invoices, which you will pay back (with interest) once you receive payment from your customers.


Invoice discounting example

  • You have outstanding invoices valued at $10,000.
  • An invoice discounting company agrees to lend you 80% of the total invoice value.
  • The lender will also charge a fee (to cover its risks, interests and other costs). It will be repaid along with the capital.

In this example, you will be given $10,000 x 80% = $8,000 of cash. After you have collected on the invoices, you will pay back $8,000 plus the agreed fee to the lender.

About Choco Up

Choco Up is a global technology and financial services platform, offering revenue-based financing and business growth solutions for digital merchants and startups.

With data analytics and machine learning at its core, Choco Up employs vast integrations to automate fund deployment, providing fast-growing companies with zero-equity funding in a quick and seamless manner.

We currently have offices in Singapore and Hong Kong and serve clients worldwide, providing smart-growth analytics and global payment solutions to fuel their growth.

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