Invoice Finance for UK Businesses

Quick summary: Invoice finance helps UK businesses convert unpaid invoices into immediate cash via factoring or discounting. It improves cash flow, supports growth, and can be arranged quickly. Fast Business Loans does not lend money — we match companies to lenders and brokers who offer invoice finance so you can get tailored quotes fast. Ready to see options? Get a Free Eligibility Check now: Get Your Free Invoice Finance Quote.

Table of contents

• Introduction — Why invoice finance matters
• What is invoice finance?
• Two main types: factoring vs discounting
• Why UK businesses use invoice finance
• Quick checklist: is it right for you?
• How Fast Business Loans helps
• Matching process — step by step
• Eligibility & required information
• Costs, fees & key considerations
• Benefits and risks
• Case study snapshot
• FAQs
• Ready to get started?
• Compliance & transparency

Introduction — Why invoice finance matters

Growing businesses often have cash tied up in customer invoices while bills, payroll and suppliers still need paying. Invoice finance unlocks that cash so companies can operate, invest or take on new contracts without delay. It’s especially useful for limited companies and SMEs with turnover from regular invoicing and debtor days that stretch beyond payment terms.

Free Eligibility Check — submit a short enquiry and we’ll match you to brokers and lenders who specialise in invoice solutions.

What is invoice finance?

Invoice finance is an umbrella term for products that allow a business to access funds secured against invoices issued to customers. Instead of waiting 30–120+ days for payment, you receive a large portion of the invoice value up front. Two common styles are invoice factoring and invoice discounting; both release working capital but have different operational implications.

Two main types: factoring vs discounting

There are also selective (spot) facilities, non-recourse options, and hybrid arrangements — providers vary widely. For more detail on how invoice finance compares with other cashflow options, see our invoice finance resource on invoice finance.

Why UK businesses use invoice finance

• Release working capital fast to pay suppliers, wages or to purchase materials.
• Support growth or seasonal peaks without taking on longer-term debt.
• Bridge long customer payment terms and reduce pressure on overdrafts.
• Outsource collections (with factoring) to save time and improve cash predictability.

Typical sectors that benefit include manufacturing, wholesale & distribution, construction subcontractors, logistics and business services — businesses that regularly invoice other companies and have a substantial debtor book.

Quick checklist: is invoice finance right for you?

• Your business issues regular invoices to commercial customers (B2B).
• Invoices total at least £10,000 in the debtor book (many funders set minimums).
• You need working capital quickly or want to support growth without diluting ownership.
• You can provide an aged debtor list and recent management accounts.

If this sounds like you, Get a Free Eligibility Check to see what your options look like.

How Fast Business Loans helps

We’re not a lender. We’re a matchmaker: tell us about your business and funding needs via a short enquiry and we’ll introduce you to lenders or brokers who specialise in invoice finance for your sector and size. Our service is free, quick and non-binding — you can compare offers and decide if you want to proceed.

Matching process — step by step

1. Complete a short enquiry (under 2 minutes) — supply business type, turnover band, debtor size and contact details.
2. We screen and match — your details are passed to selected lenders/brokers who can help.
3. Partners contact you with tailored quotes and next steps — this may include initial checks or requests for invoices and accounts.
4. Compare offers and choose a provider; lender/broker will complete checks and arrange funding if approved.

Submit your enquiry now and expect a fast response from suitable partners.

Eligibility & required information

While each funder has unique criteria, most will ask for:

• Company details and registration (limited companies only)
• Recent management accounts and VAT returns
• Aged debtor list and copies of the invoices to be funded
• Details of major customers, including payment history and credit terms

Minimum facility sizes typically start around £10,000. Some funders can consider companies with previous credit issues on a case-by-case basis via specialist brokers.

Costs, fees & key considerations

Key considerations: fees compound with time outstanding, contract length (spot vs long-term), recourse vs non-recourse politics, and whether customers will be notified. Always compare overall cost, not just headline rates. To compare offers quickly, Get Quote Now.

Benefits & risks

Benefits

• Immediate working capital improves stability and growth capacity.
• Often faster than bank loans or overdrafts — funding within days.
• Flexible options: selective invoice funding, whole turnover facilities, spot funding.

Risks & trade-offs

• Costs can be higher than traditional lending for high-risk debtors.
• Disclosed factoring may affect customer perception — consider contract terms.
• Recourse facilities leave you liable if customers don’t pay.

Case study snapshot (illustrative)

A Midlands manufacturer won a £500k contract but needed £250k for raw materials. With invoice finance arranged via a broker introduced by Fast Business Loans, the company received 85% advances against confirmed invoices and released £212,500 within 48 hours. The facility covered the contract period and allowed the business to meet the delivery schedule without using overdraft lines. (Illustrative only — outcomes vary.)

Frequently asked questions

Will applying affect my credit score?

Submitting an enquiry through Fast Business Loans does not affect your credit score. Lenders or brokers may perform checks later if you proceed.

Can I use invoice finance with existing bank facilities?

Sometimes. You may need bank consent due to inter-creditor arrangements. Our matched brokers will advise on interactions with existing lenders.

Is invoice finance only for large businesses?

No. Many lenders offer solutions for SMEs, though minimum facility sizes typically start around £10,000.

Do lenders fund all invoices?

Most fund invoices to creditworthy, commercial customers. Poor-quality or disputed invoices may be excluded or attract lower advance rates.

Ready to get started?

Complete our short enquiry form and we’ll connect you with lenders and brokers who can supply tailored invoice finance quotes. It takes under two minutes, is free and carries no obligation. Get Started — Free Eligibility Check.

Compliance & transparency

Fast Business Loans introduces businesses to finance partners; we do not provide regulated advice or loan products ourselves. When you submit an enquiry you agree to have your details shared securely with selected lenders or brokers who may contact you to discuss options. We encourage you to read partner terms carefully before entering any contract and to seek independent professional advice if needed.

Updated November 2025. Fast Business Loans connects UK businesses seeking invoice finance and other commercial funding. For more on how invoice finance compares to other cashflow options, see our detailed guide on invoice finance.

1) What is invoice finance and how does it work?
Invoice finance lets UK businesses unlock cash tied up in unpaid B2B invoices by selling them (factoring) or borrowing against them (discounting) so you don’t have to wait for customers to pay.

2) How quickly can I get funding through invoice finance?
Many providers release funds within 24–72 hours of invoice verification, depending on lender processes and debtor quality.

3) Am I eligible for invoice finance?
You’ll typically qualify if you’re a UK limited company that regularly invoices other businesses and has an aged debtor book of around £10,000 or more.

4) Will submitting an enquiry affect my credit score?
No—sending an enquiry via Fast Business Loans doesn’t impact your credit score, though lenders may run checks if you choose to proceed.

5) What are the typical costs of invoice factoring or discounting?
Expect advances of 70%–95% of invoice value with discount rates around 0.5%–3% per month plus a service/admin fee and possible setup costs.

6) What’s the difference between invoice factoring and invoice discounting?
Factoring is usually disclosed with the funder handling some collections, while discounting is typically confidential and you keep credit control.

7) What facility sizes and limits are available?
Minimum facilities often start around £10,000, with total limits tied to your turnover and the creditworthiness of your customers.

8) What documents will I need to provide?
Lenders commonly request company details, recent management accounts and VAT returns, an aged debtor list, and sample invoices or customer information.

9) Can I use invoice finance alongside my bank overdraft or existing loans?
Often yes, but you may need bank consent or an inter-creditor agreement arranged by your broker or lender.

10) How does Fast Business Loans help and what does it cost?
Fast Business Loans is a free UK introducer that matches your two-minute enquiry (not a loan application) to suitable invoice finance lenders and brokers so you can compare quotes with no obligation.