The traditional invoice discounting, invoice factoring or debtors discounting model is fast being surpassed by the Unsecured Business Loan model.
The Unsecured Business Loan (UBL) can be arranged in 3 days, if a business has sales of R 1 million per annum, has been trading for more then 12 months, is a registered legal entity and has a clear credit record, whereas invoice discounting requires lots of documents, lots of time to analyse and complicated contracts.
Cash Flow loans base their assessment of the viability of lending, on the month cash that passes through an enterprises bank account. Based on this the lenders are able to forecast what the business is able to borrow for a term of 6 months.
Unsecured Business Loans leave the control of the business with the entrepreneur by advancing the cash to the entrepreneur, whereas with invoice discounting, the lending company essentially controls the clients debtors and cash flow.