Invoice discounting is the process whereby a business can sell some or all its invoices to a third party (“discounting house”) at a discounted rate to increase the working capital of the business. It is a very flexible solution in the sense that the business can decide which debtors, and which invoices it wants to discount. The business can realise cash immediately of up to 80% of the invoice value through this process. From a risk perspective the discounting house looks at the debtor that is responsible for paying the invoices and not as much to the client requiring the invoice discounting. There are two types of invoice discounting, disclosed and undisclosed invoice discounting.