AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Invoice finance turns an unpaid invoice into cash before your customer pays. In Nigeria it is mainly offered by banks as invoice discounting: GTBank lists up to 70% of invoice value for up to 60 days and Stanbic IBTC up to 80% (as at Oct 2026), usually against invoices from approved large buyers with payment domiciled to the bank. Most of it is with recourse, so if the buyer does not pay, you repay.
A supplier delivers to a multinational, an oil service company or a state agency and waits 60 or 90 days for payment. In the meantime salaries, rent and the next order need cash. Invoice finance closes that gap. In Nigeria it exists, but it looks different from the textbook version, and the terms matter a great deal for a small supplier.
Factoring and discounting: the difference
| Invoice discounting | Factoring | |
|---|---|---|
| What happens to the invoice | You keep it; the lender advances money against it | You sell it to a factor |
| Who collects from the buyer | Usually you, with payment directed to the lender | Usually the factor |
| Does the buyer know | Yes in most Nigerian bank products, because payment is domiciled | Yes; the buyer is told to pay the factor |
| Legal form | A secured loan | A purchase of a debt (receivable) |
| Common in Nigeria | Yes, offered by banks | Less common; a dedicated law is in progress |
Who offers it in Nigeria
Banks are the main providers. Two publish product details:
- GTBank SME Invoice Discounting Finance: up to ₦50 million and up to 70% of invoice value, tenor up to 60 days, monthly interest with repayment at maturity. It asks for invoices from approved blue-chip buyers stamped by the buyer, a certificate of completion or delivery, a year of bank statements, the contract, a personal guarantee and an irrevocable domiciliation letter acknowledged by the buyer. The rate is not stated on the page.
- Stanbic IBTC Invoice Discounting: up to 80% of invoice value, rates negotiable, proceeds domiciled with the bank, no tangible collateral, with documents including the supply order, confirmed invoice, delivery receipt and a personal guarantee of owners.
Other banks and some finance companies offer receivables finance on request. Ask any provider for its licence and a written term sheet.
The law is catching up
Nigeria has had no dedicated factoring statute. In June 2026 the Senate passed the Factoring, Assignments and Receivables Financing Bill, which had already passed the House of Representatives, Vanguard reported on 10 June 2026. The bill is meant to give factoring contracts a clear legal footing for small businesses. We could not confirm presidential assent as at Oct 2026, so check its status before relying on it, and until then treat any factoring agreement as governed by general contract law and its own terms.
How much it costs
There are usually two parts: interest or a discount charge on the money advanced, for the days it is outstanding, and fees (arrangement, management, legal). Ask for both in writing and work out the total in naira.
Worked example
Example, with assumed figures: a supplier has a ₦10,000,000 invoice due in 60 days. The bank advances 70%, ₦7,000,000. Assume interest of 3% a month on the advance and a 1% arrangement fee on the advance. Interest for two months is ₦420,000 (₦7,000,000 × 3% × 2) and the fee is ₦70,000, a total of ₦490,000. When the buyer pays ₦10,000,000, the bank keeps ₦7,490,000 and releases ₦2,510,000. The supplier receives ₦9,510,000 in total, so the finance cost is 4.9% of the invoice. A monthly rate of 3% is a simple 36% a year; compare providers on the total naira cost, not the headline.
Recourse: the point small suppliers miss
With recourse means that if the buyer does not pay, you must repay the lender. The GTBank and Stanbic IBTC products both take personal guarantees, which shows the risk stays with the owner. Without recourse means the financier takes the loss if the buyer cannot pay for credit reasons; it costs more and is rarely offered to small suppliers.
- Check what happens if the buyer pays late but does pay: does interest keep running?
- Check what happens if the buyer disputes part of the invoice.
- Read the guarantee: it may cover more than one invoice.
Alternatives worth comparing
Invoice finance is one tool among several. Before signing, compare it with asking the buyer for a mobilisation advance, negotiating shorter terms in exchange for a small early-payment discount, or an overdraft sized to your average debtor balance. A 2% discount for payment in 10 days instead of 60 can cost less than two months of interest on an advance, and it involves no guarantee.
What to check first
- Is your buyer on the lender's approved list?
- Will the buyer sign a domiciliation letter and stamp your invoice?
- Is the invoice free of disputes, with delivery or completion signed off?
- What is the total cost in naira for the expected days outstanding?
- Is it with recourse, and what does the guarantee cover?
Related: invoice discounting in Nigeria and LPO financing, which funds the order before you deliver. For the bigger picture, see cash flow for small businesses.
Where Pryme fits
Invoice finance is easier when your invoices are clean. A Pryme Business Account can help you get paid faster in the first place, with invoices carrying clear payment details and the Finance agent preparing a cash flow view of what is owed and when.
Questions people ask
What is invoice factoring in Nigeria?
Selling an unpaid invoice to a financier who pays you part of it now and collects from your customer. In Nigeria, banks more often offer invoice discounting, a loan secured on the invoice.
How much will a bank advance on my invoice?
GTBank lists up to 70% of invoice value and Stanbic IBTC up to 80% (as at Oct 2026), usually for invoices from approved large buyers.
Is there a factoring law in Nigeria?
The Senate passed the Factoring, Assignments and Receivables Financing Bill in June 2026 after the House had passed it. Presidential assent was not confirmed as at Oct 2026, so check its status.
What does recourse mean in invoice finance?
With recourse, you repay the financier if your customer does not pay. Most Nigerian bank products are with recourse and take a personal guarantee.
Sources
- GTBank: SME Invoice Discounting Finance (SME IDF) · accessed Oct 2026
- Stanbic IBTC: Invoice Discounting · accessed Oct 2026
- Vanguard: Senate passes factoring bill to boost MSMEs growth (10 Jun 2026) · 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.