What is invoice finance?

Invoice finance is a working capital solution that lets a business access most of the value of its outstanding invoices immediately, instead of waiting for customers to pay. It’s commonly used by limited companies with invoices to other businesses (B2B). Funds released can help cover payroll, supplier invoices, stock, or growth needs.

If you want to check whether invoice finance could be right for your business, start a quick, free eligibility check now: Free Eligibility Check.

Types of invoice finance: invoice factoring vs invoice discounting

Invoice factoring

With factoring, a provider or broker buys your invoices and typically handles collections. The factor advances a percentage (commonly 70–90%) of the invoice value, then pays the remainder minus fees when the customer settles.

Invoice discounting

Discounting provides a confidential facility: you retain responsibility for collecting payments while a lender advances funds against your invoices. It’s preferred where you don’t want customers to know you’re using finance.

How invoice finance works — step-by-step

1. Sell goods or services and issue invoices to your customers as normal.
2. Submit eligible invoices to the invoice finance provider or have them picked up automatically via accounting integrations.
3. The provider advances up to a set percentage of the invoice value (e.g. 80%) — funds can be available within 24–48 hours once approved.
4. When the customer pays the invoice, the provider returns the reserve (minus fees) to you.
5. Fees include a service fee and a financing/discount rate; exact terms vary by lender and sector.

Ready to explore options? Get Started — our matching process is free and carries no obligation.

Benefits for UK SMEs

• Improved cash flow: turn unpaid invoices into working capital fast.
• Scale with your sales: facilities grow as your invoiced turnover increases.
• Protect supplier relationships: pay suppliers on time and avoid penalties.
• Flexible use of funds: finance can be used for payroll, stock, equipment or seasonal needs.
• No long-term dilution: it’s not equity — you don’t give up ownership.

Compare tailored offers from specialist brokers and lenders — Get Quote Now.

When invoice finance makes sense (common use cases)

Invoice finance is particularly useful when a business:

• Has rapid growth and needs working capital to fund new contracts.
• Operates in seasonal sectors with peaks and troughs in sales.
• Faces slow-paying customers and wants to stabilise cash flow.
• Needs to take on larger projects without tying up cash in debtor days.

Learn more about how invoice finance helps specific industries on our invoice finance page: invoice finance.

Eligibility & documentation checklist

Fast Business Loans typically helps businesses seeking facilities from £10,000 upwards. While criteria vary between lenders, common requirements include:

Basic criteria

• Registered limited company trading for typically 6–12 months (requirements vary).
• Business invoices to VAT-registered or creditworthy companies.
• Reasonable debtor credit profile (dependant on facility type).

Information you’ll need to hand

• Recent management accounts or bookkeeping records.
• Copies of invoices you want to finance and a sample debtor ledger.
• Company registration details and director ID/contact information.

Submitting an enquiry does not affect your credit score. Start a Free Eligibility Check now — it takes under two minutes.

Invoice finance costs & important considerations

Costs typically include:

• Advance rate: percentage of invoice value advanced (varies by industry and debtor quality).
• Discount rate / interest: charged on funds advanced for the period outstanding.
• Service fees: monthly or transaction fees for administration and credit control (especially with factoring).

Things to check before committing:

• Whether the facility is confidential (discounting) or disclosed to customers (factoring).
• Which invoices are eligible (domestic B2B, not consumer invoices).
• Minimum contract terms and termination fees.

Costs and terms vary. We match you to providers who specialise in your sector so you can compare real quotes. Get Quote Now.

Why use Fast Business Loans to find invoice finance?

We are a connector: we do not lend. Our role is to match your business with the most suitable brokers and lenders from our panel so you get faster, more relevant quotes. Our service is free, quick and carries no obligation.

How our matching works

1. You complete a short enquiry about your business and funding needs.
2. We match your details to lenders/brokers who specialise in invoice finance for your sector.
3. You receive responses and quotes directly from matching providers to compare.

Get Started — Free Eligibility Check.

Getting started today — simple 3-step checklist

1. Click “Get Quote Now” and complete the short enquiry (under 2 minutes): Get Quote Now.
2. We match you to suitable brokers and lenders who contact you with options.
3. Compare offers, ask questions, and proceed directly with the provider you choose.

There’s no cost from Fast Business Loans and no obligation to proceed with any lender.

Expert tips from invoice finance specialists

• Audit your aged debtors and remove inaccurate invoices before applying — cleaner ledgers speed approval.
• Integrate your accounts software with providers where possible — this reduces admin and improves turnaround.
• Consider debtor insurance if you have concentration risk with a few large customers.
• Ask for an example pricing schedule and a worked example so you can compare like-for-like quotes.

Want tailored advice? Complete a short enquiry and we’ll match you to specialists: Start Your Enquiry.

Success snapshots (illustrative)

Frequently asked questions

How quickly can my business access funds?

Many businesses can unlock up to 80–90% of eligible invoices within 24–72 hours once terms are agreed. Exact timings vary by provider and sector.

Will my customers know I’m using invoice factoring?

Factoring is usually disclosed because the factor handles collections. Invoice discounting can be confidential so customers are unaware.

What invoices are eligible?

Typically B2B invoices for supplied goods or services. Consumer invoices and very high-risk debtors may be excluded.

Will applying affect my credit score?

Submitting an enquiry via Fast Business Loans does not affect your credit score. Lenders may undertake checks later if you proceed.

Can start-ups use invoice finance?

Eligibility depends on trading history and the creditworthiness of your customers. Many lenders will consider businesses with a track record of trading and reliable debtors.

What happens if a customer doesn’t pay?

Handling depends on facility type. With factoring the provider often manages collections and credit risk; with discounting you typically retain collection responsibility. Always check terms.

How long does a facility last?

Facilities can be short-term or ongoing. Some are on rolling monthly terms; others are longer. Check notice periods and exit fees.

What fees should I expect?

Fees usually include a discount/finance rate (charged on advanced funds) and a service fee. Percentage rates and structures vary — always request an example schedule.

Still have questions? Complete a quick enquiry and a specialist will be in touch: Free Eligibility Check.

Compliance & transparency

Fast Business Loans is an introducer — we do not provide loans. Our service is free to businesses and designed to connect you with lenders and brokers who can provide quotes. Eligibility, fees and approval are set by lenders. We strive to be clear, fair and not misleading in all communications. If unsure, consider seeking independent professional advice before committing to any finance.

Ready to unlock cash from your invoices?

Get matched quickly to specialist lenders and brokers for invoice finance facilities from £10,000 upwards. No cost, no obligation — just relevant quotes from providers who understand your sector.

Get Quote Now — Free Eligibility Check