AIB Invoice Discounting

Many businesses suffer from slow or late payment of invoices. Invoice Discounting from AIB is a quick solution to your working capital needs, providing a totally confidential debt-financing facility. With Invoice Discounting, we can help your business overcome cash flow problems by giving you immediate access of up to 80% of invoiced debt without affecting your relationship with your customers. While Invoice Discounting is primarily a working capital facility, it may also be used to fund transactions such as mergers, acquisitions, management buy-outs, management buy-ins and capital expenditure programmes.

How Invoice Discounting works:

Easy to operate

Simply invoice your debtors as normal and advise AIB of the sales details, via a secure internet site, on a daily, weekly or an agreed basis. If you don't need the funds straight away, you are only charged for funds as you use them. When you collect the payments from debtors, simply lodge them with AIB.

Companies with efficient systems easily accommodate AIB's requirements in the normal course of business. The main requirements are:

• Details of the new sales raised (in bulk)
• Monthly debtor aged analysis highlighting problem accounts, disputes etc.
• Monthly reconciliation of your sales ledger with AIB's summary of sales ledger.

Benefits of Invoice Discounting:

Designed to solve your cashflow problems

• Converts sales into cash
• Can release more funds than conventional sources of finance
• The availability of finance grows in line with the growth in sales
• Advantage can be taken of cash and bulk discounts from suppliers
• Suppliers can be paid promptly improving a company's payment reputation
• Allows you to expand your business and increase profits without the need to increase levels of capital investment

Confidential

Your relationship with debtors is not affected, as the invoice discounting arrangement is not disclosed and remains confidential, so debtors are unaware of the funding facility.

Qualifying Criteria

Invoice Discounting is suitable for:

• SMEs and larger customers with an average ongoing funding requirement of EUR100,000 or more
• Businesses which sell goods or services on credit to other businesses
• Businesses which invoice after goods/services are delivered
• Businesses which have a satisfactory quality and spread of debtors
• Businesses that are competently managed with efficient sales administration and credit management systems and an acceptable sales ledger accounting system
• Businesses that are profitable and have a positive tangible net worth

Examples of Unsuitable Debts include

• Debts which are regarded as cash sales
• Sales to individuals
• Sales of goods or services delivered on a phased or contractual basis
• Invoicing in advance of delivery of goods or services

Example of Availability

• Total Debtors: EUR1,000,000
• Disapproved Debts* EUR100,000
• Prepayment Rate: 80% of Approved Debts

Therefore, the level of cash funding that may be made available through Invoice Discounting will be:

* Includes aged debts beyond a specified time limit, intercompany debts, disputed debts, contra balances (where the debtor or creditor balances may be offset against each other), export debts which are not credit insured or in excess of the insured limit.

Find out about the funds that are potentially available to your business by utilising the Invoice Discounting tool below.

Invoice Discounting Tool

AIB Invoice Discounting can help you to deal with cashflow problems caused by funds tied up in your debtors, by providing you with immediate access to a percentage of your outstanding payments.

This tool, based on an 80% prepayment rate, will give you an indication of the funds that are potentially available to your business through Invoice Discounting. Just enter the required financial information below to provide you with your indication. Please note that only aged debt greater than 90 days is disapproved for funding purposes in this calculation.

Note: This information is provided for illustrative purposes only and is based on the accuracy of information provided. It does not constitute a contract. We are not recording and will not use the information quoted by you in our calculators unless it is being used as part of a product application.

How much does it cost?

• A Discount Charge (similar to an interest rate) is levied only on funds used by the customer and charged monthly. This rate is generally expressed as a percentage margin over the AIB Base Lending Rate for Euro funding or an alternative base rate for other currency funding.
• A Service Fee (related to the ongoing management of the facility) is levied as a percentage of the debts purchased (i.e. notified sales invoices) and charged monthly.

Important / Regulatory Notice

Lending criteria, terms and conditions apply. Credit facilities are subject to repayment capacity and financial status and are not available to persons under 18 years of age. Security may be required.

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