How Suppliers Access Early Payment Through ETR Digital’s Working Capital Notes™
Waiting 60 or 90 days to be paid has a real cost. That cash sitting in unpaid invoices is not available to fund inventory, cover payroll, or take on the next order. The question most suppliers ask is whether there is a better option than drawing an overdraft or entering a factoring arrangement that locks up the entire receivables book.
If your buyer has offered access to ETR Digital’s Working Capital Notes™ programme, this guide explains what it means, how early payment works in practice, what the financing cost looks like, and what you need to do to participate. This is not a sales pitch for the instrument. It is a practical explanation so you can make an informed decision.
ETR Digital’s Working Capital Notes™ are designed to give suppliers access to cash that is already owed to them, sooner, at a financing cost anchored to the buyer's credit strength rather than their own.
What are ETR Digital’s Working Capital Notes™?
ETR Digital’s Working Capital Notes™ (WCN) is a digital negotiable instrument. Once your buyer approves an invoice and issues a WCN, that note becomes a formally structured, legally enforceable payment commitment. A bank or liquidity provider can then finance it, advancing cash to you before the invoice matures.
The critical distinction from a standard invoice is legal standing. An invoice is a request for payment. ETR Digital’s Working Capital Notes™ is a formally issued instrument under the UK Electronic Trade Documents Act 2023, with the same legal characteristics as a traditional negotiable instrument. That legal standing is what makes it financeable at competitive rates.
For a full technical overview of the instrument: What Are Working Capital Notes?
How Suppliers Access Early Payment Through ETR Digital’s Working Capital Notes™: Step by Step
The process follows six stages from invoice issuance to settlement. Participation in Step 4 is your choice, made invoice by invoice.
Stage | What Happens |
Invoice issued | You deliver goods or services and issue an invoice as normal under your agreed payment terms. |
Buyer approves | Your buyer approves the invoice and requests the creation of a Working Capital Note™. This is the step that makes early payment possible: the approved instrument becomes a formally issued, legally enforceable payment commitment. |
WCN issued | The Working Capital Note™ is created digitally through Flownote™. It records the parties, the amount, and the maturity date, and it carries the legal standing of a negotiable instrument. |
Early payment offered | A bank or liquidity provider finances the Working Capital Note™. You choose whether to access early payment on this instrument. Participation is optional and invoice by invoice. |
You receive cash | If you opt in, you receive payment within days, up to 100% of the invoice value less an agreed financing discount. You do not wait until the original maturity date. |
Buyer settles | On the maturity date, your buyer pays the liquidity provider directly. Your commercial relationship and agreed payment terms remain unchanged throughout. |
What Does Early Payment Cost?
The financing cost is the discount applied when the liquidity provider advances payment before the maturity date. The rate reflects the number of days remaining until maturity and the credit quality of the buyer who issued the note, not your own credit profile.
To make this concrete: on a £100,000 invoice with 50 days to maturity and an illustrative financing rate of 1.5% annualised, the discount would be approximately £205. You receive £99,795 within days rather than waiting 50 days for the full £100,000.
Whether that cost is worthwhile depends on your alternative. If your overdraft costs 8% per annum, the same 50-day funding from that facility would cost approximately £1,096 on £100,000. The WCN financing, anchored to your buyer's credit strength rather than yours, is typically materially cheaper for suppliers whose own borrowing cost is higher than that of their buyer.
How ETR Digital’s Working Capital Notes™ Compare to Invoice Finance for Suppliers
If you currently use invoice discounting or factoring, the comparison below covers the practical differences that affect your day-to-day experience.
Factor | Working Capital Notes™ | Traditional Invoice Finance/Factoring |
Invoice value accessible | Up to 100% of invoice value less an agreed financing discount. | Typically 70–85% advance rate, with the balance held as a reserve until customer payment. The reserve may be subject to further deductions. |
Commitment required | None. You choose which invoices to finance when you need liquidity, without committing your entire receivables book. | Many factoring facilities require you to assign all receivables from specific customers or across your whole debtor book. |
Administration | Low. The instrument is issued digitally through a governed workflow. No physical documents, courier delays, or manual reconciliation. | Higher. Traditional factoring typically involves ongoing credit checks, collections management, debtor notifications, and reconciliation overhead. |
Customer notification | Your buyer already knows: they initiated the programme. The commercial relationship is transparent and unchanged. | Disclosed factoring requires notifying your customers that their invoices have been assigned to a third party, which some buyers object to. |
For a broader comparison of working capital financing options: Supply Chain Finance: What It Is, How It Works, Example
What Suppliers Need to Do to Participate
Onboarding is a four-step process. Once you are set up, participation in individual invoices takes minutes rather than days.
Step | What to Do | What to Confirm |
Confirm eligibility | Check with your buyer which invoices or transaction flows are included in the programme | Which invoices qualify; minimum and maximum amounts; any excluded transaction types |
Review the terms | Obtain the programme documentation and review the financing rate, calculation method, and opt-in process | How the discount is calculated; whether the rate is fixed or variable; notice required to opt in or out |
Complete onboarding | Provide the documentation requested by the programme administrator or funding partner | KYC and AML requirements; bank account details for payment; signatory authority confirmation |
Select invoices | Once onboarded, choose which approved invoices you want to finance based on your current liquidity needs | You are not required to finance every invoice; participation is discretionary and can vary month to month |
The programme is designed so that you retain control throughout. You are not obligated to finance every invoice, and you can adjust your participation level based on your liquidity position at any given point.
FAQ: Early Payment Through ETR Digital’s Working Capital Notes™
Does participating in a WCN programme affect my relationship with my buyer?
No. Your buyer initiated the programme and is aware of your participation. The commercial terms of your trading relationship remain unchanged. Working Capital Notes™ are structured to benefit both buyer and supplier, which is why buyers offer access to them in the first place.
Can I choose not to take early payment on some invoices?
Yes. Participation is discretionary and invoice by invoice. You access early payment when it makes financial sense for your business, and you hold invoices to maturity when it does not. You are not committing to a facility that requires ongoing drawdown.
What happens if my buyer disputes an invoice after I have taken early payment?
The programme administrator will have specific terms covering disputes. In most structures, you should not take early payment on an invoice that is subject to dispute or likely to generate a credit note. Confirm the dispute handling process with your buyer or programme administrator during onboarding, before financing any invoices.
Are ETR Digital’s Working Capital Notes™ legally enforceable?
Yes. ETR Digital’s Working Capital Notes™ are issued as digital negotiable instruments under the UK Electronic Trade Documents Act 2023 and operate within a framework aligned to the UNCITRAL Model Law on Electronic Transferable Records. This legal standing is what enables financing providers to fund them with confidence. For a full treatment of enforceability: https://etr.digital/insights/are-working-capital-notes-legally-enforceable
What platform is used to manage ETR Digital’s Working Capital Notes™?
ETR Digital’s Working Capital Notes™ are issued and managed through Flownote™, ETR Digital's digital negotiable instrument platform. You will interact with the programme through the interface your buyer's programme administrator provides. More on Flownote™
The Decision Is Straightforward
If your buyer has offered access to ETR Digital’s Working Capital Notes™ programme, the core question is simple: does receiving cash earlier, at a financing cost lower than your current borrowing rate, create value for your business? For most suppliers managing 60 or 90-day payment cycles, the answer is yes for at least some of their invoices.
The optionality is the key feature. You are not entering a facility that changes your commercial relationship or commits your receivables book to a third party. You are accessing a financing option that exists precisely because your buyer chose to create it for you.
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