Bill discounting is advancing funds against a bill of exchange or similar instrument before its maturity, the financier paying the holder less than face value and collecting the full amount when the bill falls due. In some markets the phrase is used almost interchangeably with invoice discounting, though strictly it depends on a negotiable instrument having been drawn and, commonly, accepted — which gives the financier rights on the instrument itself in addition to any contractual ones. No authority polices the distinction, and providers in different jurisdictions apply the terms in opposite senses. Establish whether an actual bill exists, whether it has been accepted, who is liable on it as drawer or endorser, and whether the advance is with or without recourse on dishonour.
Why this entry carries no source list. This lexicon cites an official primary source wherever one exists and says so plainly where none does. This term is market convention: it was coined by commercial practice, it is used by everyone in the trade, and no body defines it. Pointing at a carrier’s tariff, a bank’s product page or a trade association’s explainer would dress one participant’s usage as a general rule. The practical upshot runs through the paragraph above — where the word carries no fixed meaning, the contract has to supply one.