What is bill discounting payment terms?

Bill discounting payment terms outline the conditions under which a bill is discounted and the repayment responsibilities of the borrower. Key components include:

• Discount Rate: The interest charged by the financial institution on the bill amount.
• Maturity Period: Duration until the bill is due for payment, typically 30 to 90 days.
• Payment Method: Whether payment is made upfront or through instalments.

Properly understanding payment terms helps businesses manage cash flow and avoid default.