Invoice Discounting in Nigeria: The Complete Guide for SMEs (2026)

## What is Invoice Discounting? Invoice discounting is a form of short-term borrowing where businesses use their unpaid invoices as collateral to access immediate cash. Instead of waiting 30, 60, or even 90 days for customers to pay, you get up to 90% of the invoice value upfront. ## How Invoice Discounting Works 1. You issue an invoice to your customer for goods or services delivered. 2. You upload the invoice to a financing platform like FedaCash. 3. You receive an advance - typically 70-90% of the invoice value within 24-48 hours. 4. Your customer pays the invoice on the due date. 5. You receive the balance minus the financing fee. ## Why Nigerian SMEs Need Invoice Discounting Nigeria has a massive SME financing gap estimated at NGN 13 trillion. Traditional bank loans require collateral, lengthy paperwork, and weeks of processing. Invoice discounting offers speed, accessibility, and flexibility. ## Invoice Discounting vs Traditional Bank Loans | Feature | Invoice Discounting | Traditional Bank Loan | |---------|-------------------|---------------------| | Collateral | Your invoices | Property or assets | | Approval time | 24-48 hours | 2-6 weeks | | Amount | Up to NGN 50,000,000 | Varies | | Interest rate | 5-15% APR | 25-32% APR | | Paperwork | Minimal | Extensive | ## Why FedaCash is Different Unlike marketplace platforms that match you with third-party lenders, FedaCash uses embedded financing - we fund your invoices directly from our balance sheet. This means predictable rates, one point of contact, and faster turnaround. --- Ready to turn unpaid invoices into cash? Download the FedaCash App from Google Play to get started.