Starting an Invoice-Discounting Business for SMEs Waiting on Slow-Paying Clients
Buy a slow-paying client’s invoice at a discount, advance the cash, and collect at maturity — the legitimate factoring business, funded with your own capital and underwritten on the debtor, not the fixed-return “invest in invoices” scheme that is a crime.
by Sankofa Skills Studio · vetted expert author
What you'll gain
Across Nigeria, small suppliers sit on good invoices from big, slow-paying buyers while starving for cash — and turning that frozen invoice into money is a real, structural, legally-endorsed business. It is also where the most expensive mistake is made on day one. Built from a source-graded 2026 research pass over the money model, the capital, the credit risk, the law, the market and a dated fraud museum, this course teaches the version that survives. First, the distinction that keeps you out of prison: two completely different businesses share the word “invoice.” LEGITIMATE factoring — you, the financier, buy one specific receivable at a discount with your own or institutional capital, advance most of its value now, collect the full amount from the debtor at maturity, keep the fee, and carry the risk yourself. The ILLEGAL version — raising money from the public with a promise of fixed “returns backed by invoices” — is a Ponzi and a crime under the Investments and Securities Act 2025, carrying up to ten years in jail. This course builds the first and forbids the second. Second, the honest reframe: this is not passive yield — it is a capital-intensive, diligence-intensive credit-and-fraud underwriting business that happens to use invoices. The headline ~45% annualised on a single deal is bait: strip out Nigeria’s brutal cost of funds (a 26.5% policy rate, SME lending up to ~40% in 2026), realistic idle time, and a default of just one to two per cent, and a book run on borrowed money is underwater before it starts — the model works only on your own or genuinely cheap capital. Third, the three disciplines that run through every module: underwrite the debtor, not the supplier, because your money comes back only if the debtor pays; treat fraud as the number-one killer, because an invoice is only a piece of paper asserting a debt until you have independently confirmed it with the debtor’s own accounts desk and checked it was not already sold — the discipline that defeated even Greensill and First Brands; and size your capital for diversification, because one bad advance can erase the profit on fourteen to forty-two good deals. You will learn to price a deal, read a debtor, run the verification checklist, assign a receivable with a deed and register it at the National Collateral Registry, size a starting book, and recognise the one temptation — taking the public’s money at a fixed return — that turns this real business into a crime. Two people build alongside you: Amaka, an ex-banker in Lagos funding blue-chip receivables with her own money, and Tunde, drawn to the vast supply of government contractor invoices in Abuja and learning why the highest-demand paper is also the slowest. The fraud museum is dated and honest — Greensill in 2021, First Brands in 2025, the Nigerian forgery cases the EFCC has charged — and where no dated Nigerian case exists (an invoice-branded retail Ponzi, or a court-proven local double-financing conviction) the course says so plainly rather than invent one. Carry one line: fund with your own capital, underwrite the debtor, phone the debtor to confirm, diversify — and never take fixed-return money from the public. Capacity-building and orientation, not legal, financial or investment advice; every rate, fee and capital figure is a dated snapshot to verify live before you rely on it.
Pass a real exam and earn a publicly verifiable certificate employers trust.
Unlimited practice mode + spaced-repetition flashcards, then unlimited exam retakes.
Keep the lessons and every future update to this course, forever.
What you'll cover
10 modules · 20 lessons · timed certification exam
1. Orientation: Two Businesses Share the Word “Invoice” 2 lessons
The distinction that keeps you out of prison — legitimate factoring versus the retail Ponzi; the honest reframe (a credit-and-fraud underwriting business, not passive yield); the demand engine of slow-paying buyers; and the two people you build alongside.
- Two businesses share the word “invoice” · 24 min
- The demand engine — and the two people you build alongside · 20 min
2. What Invoice Discounting Actually Is, and the Variants 2 lessons
The core mechanic in detail; the family tree — discounting, factoring, invoice financing, reverse factoring; recourse versus non-recourse; and why a small independent operator almost always runs single-invoice spot factoring, with recourse, notified.
- The core mechanic — advance, reserve, collect, keep the fee · 22 min
- The family tree — discounting, factoring, recourse · 22 min
3. The One-Deal Unit Economics 2 lessons
Advance rate, reserve and fee as your three levers; a fully worked one-deal example; the ~45% gross yield that lures people in — and why it is bait once cost of funds, opex, defaults and idle time are subtracted.
- The three levers — advance rate, reserve, fee · 20 min
- The worked deal — and why 45% is bait · 24 min
4. The Capital and the Cost of Funds 2 lessons
Why your capital is the product; three funding sources and their catches; the spread equation; Nigeria’s 2026 rate environment that can sink a borrowed book before a single default; and velocity as the master metric — with Amaka refusing a bank line.
- Your capital is the product — and the spread equation · 22 min
- Own vs borrowed, and the velocity that multiplies returns · 22 min
5. Underwrite the Debtor, Not the SME 2 lessons
The counter-intuitive core — credit-assess the party who actually pays; the five risks you are pricing; debtor-quality segmentation from blue-chip to government; and concentration limits — with Tunde’s government-paper reckoning.
- Flip the instinct — the debtor is where repayment lives · 22 min
- Debtor segmentation and the concentration cap · 20 min
6. Fraud Is the #1 Killer, and the Verification Workflow 2 lessons
The six fraud types that attack the gap between paper and reality; a dated global museum (Greensill, First Brands, TransCare) and Nigerian forgery cases; and the verification workflow whose critical control is an independent call to the debtor — with Amak
- The six fraud types and the dated museum · 24 min
- The verification workflow — the call that saves you · 22 min
7. The Legal Rails: Assignment, Registration and the Regulator 2 lessons
How the receivable legally becomes yours — deed of assignment, notice to the debtor and registration at the National Collateral Registry; the operating vehicles from CAC to a finance-company licence; and the Factoring Act 2026 and ISA 2025 — with Tunde re
- Deed, notice and registration — making the receivable yours · 22 min
- The regulator — vehicles, the Factoring Act and ISA 2025 · 20 min
8. Defaults, the Money Model and How Much to Start With 2 lessons
The savage asymmetry — one default erases 14 to 42 good deals; bad-debt sensitivity that sinks a borrowed book at ~1%; capital sized for diversification, not one deal; opex; and why a spreadsheet plus a hard checklist beats a platform at the start — with
- Defaults eat the spread — the savage asymmetry · 22 min
- How much to start with — sizing for diversification · 22 min
9. The Market, the Demand and the Customers 2 lessons
The SME finance gap as a range of dated estimates, never blended; the small-but-growing factoring market; the slow-paying buyers who are demand and risk at once, above all government; and the velocity paradox — with Tunde’s MDA-supply reality.
- The finance gap and the factoring market · 22 min
- Slow payers — the demand engine and the risk · 20 min
10. The Ponzi Landmine, the Launch and the Honest Verdict 2 lessons
The retail-investor landmine that turns a real business into a crime; a dated Nigerian Ponzi landscape and the honest gaps stated, not invented; the clean funding line; the launch sequence; and the honest verdict — with both personas resolving.
- The retail-investor landmine and the Ponzi museum · 24 min
- The clean line, the launch and the honest verdict · 22 min
Frequently asked
Is the certificate verifiable?
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Who teaches this course?
A vetted expert author — Sankofa Skills Studio. Every expert course is reviewed and fact-checked before publication, and the author earns a revenue share on your enrolment.
How long do I have access?
Lifetime. Once you enrol you keep access to the lessons, practice mode and flashcards — including future updates to this course.
What happens if I don't pass the exam first time?
You can retake it — up to 5 attempts, with a 12-hour wait between attempts. Practice mode is unlimited, so rehearse with the same verified question bank until you're ready.
Can my team enrol together?
Yes. Talk to us about group and organisation rates — certifying a whole team is faster and cheaper than one at a time.
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