This is where the Bank provides funding to a client to fulfill/deliver on a confirmed order. The order finance facility should be self-liquidating meaning that the payments received from the order should liquidate the facility.
Invoice discounting is a form of short term borrowing often used to improve a company's working capital and cash flow position. It allows the company to receive advances of funds against outstanding sales invoices. The facility allows a business to draw money against its sales invoices before the debtor has actually paid.
It is guided by the total cost of the transaction to be undertaken, being a function of the order value. For invoice discounting, it is guided by the invoice value.
Normally the Bank requires a confirmed order in the case of order finance and outstanding invoices in the case of invoice discounting. A check list is also supplied to the client.