AI agents for business finance: what they can and can't do
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The short answer
Invoice discounting lets a business borrow a share of an unpaid invoice before the client pays, then repay when payment arrives. In Nigeria banks such as GTBank (up to 70% of invoice value, 60-day tenor) and Stanbic IBTC (up to 80%) offer it, usually against invoices from approved large clients, with payment domiciled to the bank (as at Oct 2026).
Suppliers to large companies and government often wait 30, 60 or 90 days to be paid. Meanwhile staff, rent and the next order still need cash. Invoice discounting turns money you are already owed into cash now. This guide explains how it works in Nigeria, what two banks publish about their products, and how it compares with a loan or factoring.
How invoice discounting works
- You deliver goods or complete a service and issue an invoice to your client.
- The client acknowledges the invoice and agrees in writing to pay into an account at the lender. This is domiciliation.
- The lender advances an agreed share of the invoice value.
- When the client pays, the lender takes the advance plus interest and fees and releases the balance to you.
What two Nigerian banks publish
| GTBank SME Invoice Discounting Finance | Stanbic IBTC Invoice Discounting | |
|---|---|---|
| Share of invoice funded | Up to 70% | Up to 80% |
| Maximum amount | ₦50m | Not stated |
| Tenor | 60 days (maximum waiting period 30 days) | Not stated |
| Pricing | Monthly interest, bullet repayment at maturity; rate not published | Rates negotiable |
| Eligible clients | Approved blue-chip principals | Not stated |
| Security | Irrevocable domiciliation; personal guarantee of sponsor | Proceeds domiciled; personal guarantee of owners; no tangible collateral |
Figures are as shown on each bank’s page in October 2026. Other banks and some finance companies offer similar receivables finance; ask each for its written terms. Because neither page publishes a rate, the only way to compare offers is to ask each lender for the monthly rate, every fee and the total cost on your actual invoice.
Documents banks ask for
- Application form or letter, and a board resolution for a limited company.
- The contract or supply order, and the invoice stamped or confirmed by the client.
- Evidence of delivery or a certificate of completion.
- Certificate of incorporation (CAC).
- Twelve months of bank statements.
- A signed domiciliation letter acknowledged by the client, and a personal guarantee.
Invoice discounting, factoring and loans compared
- Invoice discounting
- You borrow against the invoice; you remain owed the money and repay from the client’s payment. In Nigerian bank products the client knows, because it signs the domiciliation letter.
- Factoring
- You sell the invoice to a factor, which then collects from your client. Fewer Nigerian providers offer it in this pure form.
- Term loan
- The lender looks at your whole business and collateral; repayment is on a fixed schedule regardless of when clients pay.
- LPO finance
- Funds the cost of fulfilling an order before delivery; see LPO financing.
The key difference from a loan is the source of repayment: the client’s payment, which is why lenders care more about who your client is than about your assets.
Worked example
Example only, with an illustrative rate. A business issues a ₦10,000,000 invoice to an approved client and expects payment in 60 days. Using an example interest charge of 3% a month on the amount advanced:
| At 70% advance | At 80% advance | |
|---|---|---|
| Cash received now | ₦7,000,000 | ₦8,000,000 |
| Interest for two months | ₦420,000 | ₦480,000 |
| Lender takes when client pays | ₦7,420,000 | ₦8,480,000 |
| Balance released to you | ₦2,580,000 | ₦1,520,000 |
| Total cost | ₦420,000 | ₦480,000 |
If the client pays late, interest keeps running and you may face penalties. If the client deducts withholding tax, the amount received is lower than the invoice; see withholding tax on invoices.
Why applications are declined
Because the client’s payment is the real security, most refusals come back to the client or the paperwork rather than to the applicant’s own finances. Common reasons include:
- The client is not on the approved list. GTBank’s product, for example, is for invoices from approved blue-chip principals.
- No acknowledgement. The client will not sign a domiciliation letter, or the invoice is not stamped or confirmed.
- Work not finished. Without a delivery note or completion certificate, the invoice may still be disputed.
- Weak history. First-time contractors may be asked for evidence of earlier contracts completed successfully.
- Very long or uncertain payment dates. An invoice that may take six months to settle does not fit a 60-day product.
Invoices to government agencies can be financed where the lender accepts the agency as a principal, but payment timing is often harder to predict, so expect closer checks and possibly a lower advance.
What to check first
- Is your client on the lender’s approved list, and will it sign a domiciliation letter?
- What is the rate per month, which fees apply, and are they deducted upfront?
- What happens if the client pays after the tenor ends?
- Does your invoice show everything the client needs to pay without dispute? Use the invoice checklist.
Where Pryme fits
Pryme does not offer invoice discounting. A Pryme Business Account includes invoicing and a Sales agent that prepares payment reminders for a person to approve, which can shorten the wait for payment in the first place.
Questions people ask
Which banks do invoice discounting in Nigeria?
GTBank and Stanbic IBTC publish invoice discounting products, and other banks offer receivables finance on request. GTBank lists up to 70% of invoice value and Stanbic IBTC up to 80% (as at Oct 2026).
Is invoice discounting a loan?
Yes, in practice it is a short-term loan secured on what your client owes you. You stay responsible for repayment if the client does not pay.
Does my client need to know?
With the Nigerian bank products described here, yes: the client signs or acknowledges a letter directing payment to the lender.
What is the difference between factoring and invoice discounting?
In factoring you sell the invoice and the factor collects from your client. In invoice discounting you borrow against it and repay from the client’s payment.
Sources
- GTBank: SME Invoice Discounting Finance · accessed Oct 2026
- Stanbic IBTC: Invoice Discounting · accessed Oct 2026
- CBN Money Market Indicators (prime and maximum lending rates) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.