What is invoice finance?

Invoice finance is a working capital solution that lets a business release funds tied up in unpaid B2B invoices. Instead of waiting 30–120+ days for customers to pay, you can receive a percentage of each invoice upfront and the balance (less fees) when the debtor settles.

Common forms include invoice factoring and invoice discounting; both help bridge cash-flow gaps, support rapid growth and reduce pressure during seasonal peaks.

• Access cash quickly — typically within days of approval.
• Scale funding in line with sales — the facility grows as your invoices grow.
• Free to enquire — use our matching service to compare tailored offers.

Need funds released in days, not months? Complete our 2‑minute form and we’ll match you with invoice finance partners who suit your business. Free Eligibility Check

How invoice finance works (step-by-step)

1. Issue an invoice to your B2B customer as normal.
2. You or the provider notifies the finance partner of the invoice(s).
3. The provider advances a percentage (often 70–90%) of the invoice value into your account.
4. When the customer pays the invoice, the remaining balance is released to you minus fees and charges.

Typical funding timeline: application & checks (24–72 hours to several days), funds advanced once facility agreed. Lenders usually assess the quality of your debtor book — sometimes running credit checks on your customers rather than on you.

Options include whole‑ledger facilities (covering all invoices) or selective/spot funding for chosen invoices.

Types of invoice finance explained

Invoice factoring

Factoring often includes the provider handling collections. It can be visible to your customers (they pay the factor). Best for businesses that prefer outsourced debtor management or need immediate, consistent cashflow.

Invoice discounting

Discounting is usually confidential — your business remains responsible for chasing payments. Good for firms that want to retain control of customer relationships.

Selective / spot finance

Fund individual invoices as needed rather than the whole ledger. Useful for one-off large invoices or for testing a provider.

Specialist & export invoice finance

Providers offer tailored solutions for construction supply chains, export sales and sector‑specific risks. If you invoice overseas customers, some lenders specialise in export finance and FX considerations.

Fast Business Loans can introduce you to providers that specialise in your sector — from our homepage to specialist partners for construction or seasonal industries.

Advantages & challenges

Terms differ across lenders — always review agreements carefully. Fast Business Loans introduces you to multiple partners so you can compare options and choose the best fit.

Costs, fees & typical terms

Invoice finance costs are usually made up of:

• Advance rate — the upfront percentage of invoice value (e.g. 70–90%).
• Discount fee / interest — charged on the advanced amount for the duration of the invoice.
• Service / management fees — monthly or facility fees for admin and collections.
• Arrangement or set-up fees — one-off costs to open a facility.

Illustrative example (not a quote): On a £100,000 invoice, an 85% advance gives £85,000 upfront. When the debtor pays, you receive the remaining £15,000 less the discount and fees. Actual rates and fees will vary by provider and debtor credit risk.

Get Quote Now to compare live offers from lenders and brokers matched to your business.

Eligibility & what lenders look for

Common criteria include:

• Trading company (limited company) with B2B invoices.
• Quality of debtors — preference for creditworthy, established customers.
• Minimum invoice values and a predictable debtor book.
• Management accounts, aged debtor reports and sample invoices.

Start-ups that invoice creditworthy businesses can sometimes qualify. Preparing recent accounts and an aged debtor list improves matching and speeds approval.

Industry use cases

Invoice finance is widely used across UK sectors. Examples:

• Construction: release cash to buy materials while waiting for retention payments.
• Manufacturing: smooth supply chain payments and scale production.
• Recruitment: cover payroll while waiting for client invoicing cycles.
• Logistics & distribution: manage fuel, fleet and seasonal demand.
• Professional services: maintain cashflow between project invoicing and client settlement.

Fast Business Loans connects you with partners experienced in your industry — helping you avoid unsuitable offers and reducing time to funding.

Invoice finance vs alternatives

How it stacks up:

• Overdrafts: flexible but may be withdrawn or more expensive; invoice finance scales with sales.
• Business loans: good for fixed-term projects; invoice finance ties funding to sales, not additional debt.
• Asset finance: suits equipment purchases; invoice finance releases working capital from sales.
• Merchant cash advance: tied to card receipts; usually higher cost and repayment linked to sales.

Choosing the right option depends on the purpose of funding, cost tolerance and impact on customer relationships. Use our free matching service to explore multiple routes.

Preparing your enquiry

Have this ready to speed the process:

• Recent management accounts and bank statements.
• Aged debtor report and sample invoices.
• Details of large or repeat debtors and typical payment terms.
• Basic business details: company number, turnover and contact information.

Our enquiry form takes under two minutes — and completing it does not affect your credit file. Start Your Free Eligibility Check

Why Fast Business Loans?

Fast Business Loans is an introducer — we do not lend and we do not provide regulated financial advice. Our role is to:

1. Collect a few details about your funding needs.
2. Match you with lenders and brokers experienced in invoice finance for your sector.
3. Get you no‑obligation quotes so you can compare terms and choose the best fit.

How it works:

1. Complete the short enquiry form (<2 minutes).
2. We match and share your details with selected partners.
3. Partners contact you with tailored quotes and next steps.

Ready to compare options? Get Quote Now

For more detailed sector guidance see our in-depth resource on invoice finance.

Frequently asked questions

What is the difference between factoring and discounting?

Factoring usually includes the provider managing collections and may be visible to customers. Discounting is typically confidential and you remain in control of debtor collections.

How quickly can I receive funds?

Some providers can release funds within 24–72 hours after approval. Speed depends on lender processes, sector and the completeness of your documents.

Will customers know I’m using invoice finance?

Factoring may involve the lender contacting customers. Discounting can remain confidential. Tell us which approach you prefer when you submit your enquiry.

Does applying affect my credit score?

No — completing the Fast Business Loans enquiry will not impact your credit file. Lenders may perform checks later if you proceed.

What minimum funding amounts do you handle?

We connect businesses seeking funding from approximately £10,000 upwards. If your requirement is below this, discuss it in the enquiry and we’ll do our best to match you.

Support & compliance notes

Your data is handled securely and only shared with finance partners relevant to your request. Fast Business Loans is an introducer and does not give regulated financial advice. All offers are subject to lenders’ criteria; terms and eligibility vary.

If you need help deciding, complete the short form and our team will guide which partners are best placed to help your business.