Confidential invoice discounting, explained
The full name behind invoice discounting, and the CHOCS structure that keeps a funding partner invisible to your customers.
How CHOCS keeps it invisible
Under a CHOCS arrangement, your customers continue paying into a bank account that carries your business name, exactly as they always have. Behind that account, the funding partner tracks what has been invoiced, funded and collected, reconciling the ledger without ever inserting themselves into the customer-facing payment flow. Statements, remittance requests and any payment chasing still come from you, using your own branding and your own credit-control team.
The trade-off is that CHOCS depends on your credit control actually working. If invoices go unpaid and your own collections process cannot bring them in, the funding partner has fewer tools to intervene without the arrangement becoming visible, which is exactly why they check your credit-control process before agreeing confidentiality.
Who qualifies for confidential terms
- An established, working credit-control process, in-house or via a competent bookkeeper
- Reasonably current management accounts and a clean sales-ledger record
- Turnover from roughly £250,000 a year, the same broad threshold as discounting generally
- A track record of collecting your own invoices without persistent, unresolved arrears
Confidential discounting vs factoring
| Confidential invoice discounting | Invoice factoring | |
|---|---|---|
| Who collects payment | You, as normal | The funding partner, direct from your customer |
| Visible to customers | No | Usually yes |
| Credit-control team needed | Yes, your own | Not required, the partner runs it |
| Typical minimum turnover | From roughly £250,000/year | From roughly £50,000/year |
See invoice discounting for the full cost anatomy and a worked example, or the full comparison guide for a decision checklist.
Frequently asked questions
No, it is the same product under a fuller name. Invoice discounting is confidential by default in the UK market, your customers are not told a funding partner is involved, so "confidential invoice discounting" and "invoice discounting" describe the same facility.
CHOCS stands for Customer Handled Off Contra System, the payment structure funding partners use to keep discounting confidential. Your customers pay into an account in your name, and the funding partner reconciles it behind the scenes, rather than customers paying a visibly separate collections account.
It is unlikely under normal running, since statements, invoices and correspondence all carry your name throughout. The main way it could surface is if the funding partner needed to step in directly, which usually only happens if your own credit-control process breaks down or the facility is terminated.
Mainly that you run a genuine, working credit-control process already, since you are the one collecting payment day to day. Expect questions about your sales-ledger software, your terms of business, and how you currently chase overdue accounts.
Two minutes, soft checks only, no impact on your credit score.
See how much you could releaseLast reviewed: August 2026
See how much you could release.
Two minutes, soft checks only, no impact on your credit score.