Discount
Understanding bank discounting: a practical guide for French businesses
By Charlotte GAUCHON30 April 2025Cash management is a key concern for any business, whatever its size or sector of activity. Waiting for payment from customers can sometimes create significant financial stress. Bank discounting is one of the oldest and most common mechanisms used by French companies to obtain cash by mobilising their trade receivables before their due date. While it is a valuable financing tool, it also raises a number of practical and legal issues. The aim of this article is to provide you with a clear and accessible overview of bank discounting, to help you better understand how it works and the implications for your business. What exactly is bank discounting? Basically, discounting is an advance of funds granted by a bank to its corporate customer. In exchange for this advance, the company gives the bank a claim on one of its customers.
Banker's recourse for unpaid discounted bills: focus on reversal
Banking and securities law, DiscountingAlthough bank discounting is a valuable cash management tool for companies, it also involves a significant risk: the principal debtor (the drawee of the bill or the issuer of the cheque) fails to pay on the due date. When this happens, the bank that advanced the funds...Bills of exchange and cheques: which securities can be discounted by your bank?
Banking and securities law, DiscountingBank discounting, as we saw in our general presentation of this mechanism, is based on the mobilisation of a receivable before its maturity. However, to be eligible for this credit operation, the receivable must generally be materialised, incorporated in a specific security that the company gives to its bank. The nature...Bank discounting: definition, how it works and what's at stake for your company
Banking and securities law, DiscountingFinancial oxygen is essential to the smooth running of any business. It is a constant challenge to obtain liquidity quickly in order to cope with cash flow shortfalls, finance the operating cycle or seize a development opportunity. Among the tools available to companies to mobilise their trade receivables before they are paid off are...
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