Definition
Borrowing against invoices while keeping control of collections.
Why it matters
Common in the UK; similar to confidential AR lines in the US.
Where it shows up in a deal
You will meet the term mostly in UK material and in the marketing of international providers. The US equivalent is a confidential receivables line or an asset-based AR facility: you borrow against the ledger, your customers are not notified, and you continue to invoice and collect in your own name.
What it affects
- Because you collect, the funder relies on your reporting and on periodic audits instead of verification calls.
- It is a borrowing, so the receivables and the debt both stay on your balance sheet.
- Qualification is tighter - established trading history and reliable management accounts are normal requirements.
- A collection account under the funder's control is usually still required even though customers are not notified.
The common mistake
Related terms
- Confidential FactoringFactoring in which customers aren't notified and keep paying the business directly.
- Non-Notification FactoringFactoring where customers aren't told their invoices are assigned.
- Asset-Based LendingA revolving credit line secured by receivables, inventory or equipment.
- Invoice FactoringSelling unpaid invoices to a factor for an immediate advance.
Questions about how invoice discounting affects your facility?
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