Invoice discounting is raising cash against receivables by selling or borrowing against unpaid invoices at a discount to face value, with the seller usually continuing to collect from its customers. Usage is inconsistent between markets and the label does not reliably tell you what the arrangement is. Two questions distinguish these facilities: whether the buyer is told — in a discounting facility the buyer typically is not, and pays the seller as usual — and whether the financier has recourse to the seller if the buyer fails to pay. Those determine who carries credit risk and often whether the receivable leaves the seller’s balance sheet. Read the facility documentation for notification, recourse and collection responsibility, not the name on the term sheet.
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.