What is Invoice Finance and How Can It Help Your Business?

Invoice finance is a working‑capital solution that converts unpaid B2B invoices into immediate cash. Instead of waiting 30, 60 or 90+ days for customers to pay, a finance provider advances a large portion of the invoice value so you can run the business without interruptions. This is a common and proven way for growing UK companies to smooth seasonal peaks, accelerate growth or handle supplier and payroll costs.

Fast Business Loans is an introducer: we’ll match your limited company with brokers and lenders who specialise in invoice funding. We don’t lend ourselves — we help you compare options quickly so you can decide which provider suits your needs.

Free Eligibility Check — takes 2 minutes

How Invoice Finance Releases Cash Tied Up in Your Sales Ledger

Step‑by‑step: From issued invoice to funds in your account

1. You raise an invoice to a creditworthy business customer.
2. You submit the invoice ledger to your chosen invoice finance provider or broker.
3. The provider advances an agreed percentage (typically 70–95%) of the invoice value.
4. When your customer pays, the provider releases the remaining balance minus fees.

Typical advance rates are 70–95% of invoice value; fees vary by sector and risk but often sit in the 1–5% range per invoice or as a monthly service margin. Funding can be arranged in 24–72 hours after acceptance, depending on checks and onboarding.

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Types of Invoice Finance

• Invoice factoring: The funder usually manages collections and deals with your debtors. This is useful if you want to outsource credit control.
• Invoice discounting: Confidential funding where you keep control of collections — suitable if you don’t want customers notified.
• Selective / single‑invoice finance: Finance for one or a few invoices rather than the whole ledger — good for one‑off cash needs.
• Asset-backed revolving facilities: Ongoing facilities that grow with your sales ledger for established businesses.

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Benefits of Invoice Finance for UK Businesses (and things to consider)

If you want help weighing pros and cons for your sector, we’ll match you with brokers who specialise in your industry. Free Broker Match — Get Started

How Fast Business Loans Matches You with the Right Invoice Finance Partner

Our process is designed to be quick, fair and transparent:

1. Complete a short enquiry (takes under 2 minutes).
2. We check your needs and match you with suitable lenders or brokers.
3. A partner contacts you to discuss terms and performs necessary checks.
4. You receive quotes and decide which offer to progress with — no obligation.

We only share your details with partners relevant to your request. Your submission is an enquiry — not a loan application — and it won’t affect your credit score. Get Quotes from Trusted Brokers

Case snapshot: A UK distributor with £250k monthly sales used invoice discounting to unlock £175k in working capital, enabling a seasonal bulk buy that increased margin by 12% within three months.

Who Benefits Most from Invoice Finance?

Invoice finance is commonly used by limited companies across many B2B sectors. Typical industries that benefit:

• Manufacturing and wholesale — cover supplier lead times and bulk purchases.
• Transport & logistics — smooth seasonal income and fuel or payroll peaks.
• Recruitment agencies — bridge client payment cycles and pay temporary staff.
• Creative & marketing agencies — fund retainer and project cashflow.
• Construction (where suitable) — note that some construction retentions need specialist solutions.

Unsure if your business suits invoice finance? Speak to a specialist matched to your sector via our simple enquiry. Free Eligibility Check

Invoice Finance Eligibility: What Lenders Look For

Common criteria lenders or brokers will assess:

• Company status: UK‑registered limited companies (trading name, company registration).
• Trading history: many funders expect at least 6 months trading; some prefer 12+ months.
• Minimum invoice volume or turnover thresholds (varies by provider).
• Invoice type: predominantly B2B invoices to creditworthy, verifiable customers.
• Existing finance: outstanding facilities or security can affect options.

Information to have ready: recent turnover, debtor ledger or sample invoices, average debtor days (DSO) and any current funding arrangements. Share your details — No credit impact

Understanding Invoice Finance Costs and Typical Terms

Common charging structures

• Advance fee / discount margin: a percentage charged on the advanced amount (often expressed monthly or as a margin over base rate).
• Service or platform fees: setup, monthly administration or audit fees on top of margin.
• Interest on drawn amounts: where facilities include an interest charge on funds used.

Always ask providers for a full, written cost breakdown and examples based on typical invoice values. When comparing offers, consider total effective cost and impact on margins, not just advance percentage. Request Transparent Quotes

For alternative cashflow options see our guides on cashflow loans and asset finance.

Invoice Factoring vs Invoice Discounting vs Alternatives

Which option is best depends on control, confidentiality and the scale of funding you need:

• Factoring: Funders usually handle collections — good for businesses wanting outsourced credit control.
• Discounting: Confidential — you retain debtor relationships and collections.
• Selective finance: Ideal for one‑off invoices or seasonal spikes.
• Alternatives: Short‑term business loans or merchant cash advances may suit some needs but compare costs carefully.

If you’d like tailored advice on the best fit for your business model, we’ll match you with brokers who specialise in these products. Find Your Best‑Fit Funding Solution

Learn more about invoice finance options including industry‑specific approaches on our invoice finance page: invoice finance.

Maximising the Value of Invoice Finance

Tips to get the most from invoice funding:

• Implement clear credit terms and sales contracts to reduce disputes.
• Integrate your accounting software with the funder to speed up onboarding and reconciliations.
• Monitor debtor days (DSO) and prioritise collections to reduce fees.
• Plan seasonal funding needs in advance so facilities are in place when required.
• Consider debtor protection or bad‑debt insurance where available.

Talk to an Invoice Finance Specialist

Invoice Finance FAQs

How quickly can funds be released after approval?

Once a facility is agreed and onboarding is complete, many providers can fund within 24–72 hours. The speed depends on checks and the complexity of your invoices.

Will my customers know I’m using invoice finance?

With factoring, customers are often notified because the funder manages collections. Invoice discounting is typically confidential — ask your broker which option suits your preference.

Can newly established companies access invoice finance?

Some providers will consider businesses trading for 6 months or more; many prefer longer trading histories. If you trade to established B2B customers, selective options may still be available.

What happens if a customer doesn’t pay?

Funding agreements set out how disputes and bad debts are handled. Some facilities include recourse to the business, others carry bad‑debt protection. Your matched broker will explain the terms.

Will applying affect my credit score?

Submitting an enquiry via Fast Business Loans is a neutral, non‑credit application. Lenders or brokers may carry out checks later if you decide to proceed.

What minimum or maximum amounts are available?

Our partners typically work with funding requests from around £10,000 upwards. Larger facilities (hundreds of thousands to millions) are also available via specialist brokers.

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Transparent Introductions You Can Trust

Fast Business Loans introduces your business to lenders and brokers who can help arrange invoice funding. We’re committed to clear, fair and accurate information so you can make an informed decision. Your data is handled securely and only shared with partners relevant to your request. Submitting an enquiry is not a loan application and does not impact your credit record.

Next step: complete a short enquiry and we’ll match you to suitable providers — Get Started — Free Eligibility Check