Bill discounting is a form of company financing, according to which the bank will purchase bills from their owner (bill holder) before maturity by the bill holder (the time of repurchase by the bill holder matures) with a discount equal to loan interest rate.
Standard discounting
Advantages for a Bill Holder (Supplier):
Advantages of use for a Bill Drawer (Buyer):
Transaction background:
Entering into a contract of purchase and sale of goods between the Bill Drawer and the Bill Holder, under which the settlement by means of a bill is stipulated (requirement of the law)
Discounting REPO
Benefits for a Bill Holder (Supplier):
Benefits of use for a Bill Drawer (Buyer):
Transaction background:
Entering into a contract of purchase and sale of goods between the Bill Drawer and the Bill Holder, under which the settlement by means of a bill is stipulated (requirement of the law)