What Does CID Mean In Invoice Finance?

CID stands for Confidential Invoice Discounting.

It is a form of invoice finance where funds are advanced against your unpaid sales invoices, and your customers are not made aware that a funder is involved. You continue to collect your own payments and manage your own credit control, exactly as before.

How It Differs From Factoring

The distinction is about disclosure and who does the chasing:

Factoring is disclosed. The funder handles credit control and your customers pay them directly
Invoice discounting can be disclosed or confidential. You retain credit control
Confidential invoice discounting is undisclosed. Customers pay into an account that appears to be yours, and the arrangement stays private

For businesses selling to large customers, or in sectors where an outside funder chasing payment might raise questions, confidentiality is often the deciding factor.

What Funders Require For CID

Because you are collecting the money rather than the funder, they are relying on your systems. Expect the bar to be higher than for factoring:

Demonstrably competent credit control and clean, current sales ledger records
Generally a larger turnover than the minimum for a factoring facility
Reasonable spread of customers rather than heavy concentration on one or two
Periodic audits of the ledger by the funder

Newer or smaller businesses are often placed on disclosed factoring first and move to a confidential facility once the track record supports it. That progression is normal and worth planning for rather than treating as a rejection.

Related terms: advance rate, discount fee, recourse period.

Read more about invoice discounting, invoice factoring, or invoice finance generally.

« Back to Glossary Index