Invoice Finance
Turn outstanding invoices into working capital within 24 hours. Advance up to 90% of your B2B invoice book without waiting 30, 60 or 90 days for customers to pay. No property required. Assessed on your customers, not on your credit history.
Free Consultation
Get a quick quote
Step 1 of 3: Security
No upfront fees · Business enquiries only · Min. £25,000
What is Invoice Finance?
Invoice finance is a working capital facility that advances a percentage of your outstanding B2B trade invoices before your customers pay them. Instead of waiting 30, 60 or 90 days for payment, you access up to 90% of each invoice value within 24 hours of raising it. The remaining balance (less fees) is released when your customer pays in full. There are two main forms: factoring, where the finance provider manages your sales ledger and chases payment on your behalf; and invoice discounting, where you retain control of your own ledger and the facility remains confidential to your customers. Both are assessed primarily on the creditworthiness of your customers, not on your own business financial history or director credit.
- Advance 70 to 90% of B2B invoice value within 24 hours of raising an invoice
- Remaining balance (less fees) paid when the customer settles
- Factoring: provider manages the sales ledger and chases payment (disclosed to customers)
- Invoice discounting: you manage the ledger; facility is confidential to your customers
- Assessed on your customers' creditworthiness, not your own credit history
- No property required as security
- Facility grows automatically as your turnover grows
- Available to businesses with as little as six months trading history
How Does Invoice Finance Work?
Application and debtor assessment
The finance provider assesses the creditworthiness of your customer base (your debtors) rather than your own financial position. They review your invoice book, your customer payment history and the credit quality of your largest customers. Most applications are assessed within 24 to 72 hours.
Facility agreed and limits set
The provider agrees a facility limit based on your assessed invoice book. Individual debtor limits are set for each of your customers. Invoices raised against approved customers are eligible for funding up to that customer's limit.
Raise an invoice and draw funds
Each time you raise an eligible invoice, you notify the provider (via an online portal in most cases) and 70 to 90% of the invoice value is transferred to your account within 24 hours. This replaces the waiting period entirely.
Customer pays
In factoring, your customers pay the finance provider directly. In invoice discounting, your customers pay your normal bank account and you pass the funds through. Either way, when payment is received, the provider releases the held-back balance (typically 10 to 30%) less their fee.
Facility revolves with your business
Unlike a fixed loan, invoice finance is a revolving facility. As you raise new invoices and customers pay old ones, the facility automatically adjusts. As your business grows and your invoice book increases, more capital becomes available without a new application.
Is Invoice Finance a Good Idea?
Advantages
- Converts your sales ledger into immediate working capital
- Grows automatically with your business turnover
- No property or fixed assets required as security
- Assessed on customer creditworthiness, not your own credit history
- Available even during an active IVA (with insolvency practitioner consent)
- Factoring removes the cost and time of in-house credit control
- Confidential invoice discounting available for businesses concerned about disclosure
- Faster than arranging any property-backed facility
Considerations
- Only available to businesses with B2B (business-to-business) customers
- Not available if your customers are consumers (retail, direct to public)
- Factoring discloses the arrangement to your customers
- Minimum invoice values and minimum annual turnover thresholds apply
- Fee structure can be complex: service fee, discount charge, bad debt protection
- The facility is tied to invoice quality: disputed or overdue invoices reduce availability
How to Secure Invoice Finance
Prepare your debtor book
Gather a list of your current outstanding invoices with customer names, invoice amounts, invoice dates and due dates. The provider uses this to assess the quality of your receivables and set facility limits.
Decide: factoring or discounting
Factoring is simpler to manage and includes credit control. Invoice discounting is confidential but requires you to manage your own ledger. We can help you assess which is most appropriate for your customer relationships and internal capacity.
Submit enquiry
Provide your most recent 3 months of bank statements, your aged debtor report and details of your three to five largest customers. We identify the most suitable invoice finance providers and return indicative terms typically within 24 hours.
How Much Can I Borrow?
The available facility is determined by the value and quality of your outstanding invoice book, not by a fixed loan amount.
- Advance rate: 70 to 90% of eligible invoice value (varies by debtor quality)
- Minimum annual turnover: typically £100,000 to £250,000 depending on provider
- Minimum invoice value: typically £500 to £1,000 per invoice
- No fixed maximum: facility scales with your invoice book
- Individual debtor limits set based on customer credit assessment
What Are the Costs?
How Quickly Can I Get a Loan?
Initial facility set-up typically takes three to seven working days from submission of a complete application. Once the facility is active, individual invoice advances are transferred within 24 hours of notification. For businesses in urgent situations, some providers can onboard in 24 to 48 hours.
Eligibility Criteria & How to Apply
- UK limited company, LLP or sole trader with B2B customers only
- Minimum six months trading history (some providers accept shorter)
- Minimum annual turnover typically £100,000 to £250,000 depending on provider
- Customers must be UK-registered businesses (some providers accept overseas debtors)
- Invoices must be for goods delivered or services completed (not pro-forma or advance)
- Director adverse credit accepted: facility is assessed on debtor quality
- Active IVA: factoring available with insolvency practitioner consent
- Not available for B2C (consumer) businesses or construction with retentions
9 Example Uses of Invoice Finance
Slow-paying large customer
A professional services firm has a single customer representing 60% of revenue who pays on 90-day terms. Invoice finance on that single debtor converts each invoice to cash within 24 hours, removing the cash flow strain.
Rapid growth outpacing cash flow
A recruitment agency doubled its headcount placed in a six-month period. The wage bill grows before the invoice book is collected. Invoice finance provides the working capital to fund payroll without drawing on reserves.
Business with adverse credit director
A trading business has a director with a satisfied CCJ from three years ago. A bank declined a working capital facility. Invoice finance is approved based on the quality of the debtor book, with no credit check on the director.
Active IVA director
A director in an active IVA runs a profitable manufacturing business. With insolvency practitioner consent, a factoring facility is arranged against the business invoice book, providing working capital without a property charge.
Seasonal cash flow gap
A food manufacturer supplies major retailers who pay on 60-day terms, but raw material suppliers require 30-day payment. Invoice finance bridges the 30-day gap, allowing the business to take on larger orders without a cash shortfall.
Replacing an overdraft
A bank withdraws a £200,000 overdraft facility from a business following a change in lending policy. Invoice finance replaces the overdraft with a revolving facility that grows with the business rather than being capped at a fixed amount.
Construction subcontractor
A specialist subcontractor is paid by a main contractor on 60-day terms but must pay its own labour weekly. Selective invoice finance against specific main contractor invoices provides weekly payroll cover.
Import business with long supplier terms
An importer pays suppliers in Asia on 30-day terms but collects from UK wholesale customers on 60-day terms. Invoice finance on the UK receivables covers the supplier payment gap.
Funding a tender win
A business wins a significant new contract that requires immediate resource mobilisation. Invoice finance on the new contract invoices funds the upfront cost of delivery before the first payment is received.
Ready to proceed?
No obligation. No upfront fees. Speak directly with a specialist.
Get a Invoice FinanceFrequently Asked Questions
Related Products