What is invoice finance?

Invoice finance is a way for businesses to access the value of unpaid sales invoices instead of waiting for customers to pay. It’s a form of working capital that converts invoices into immediate cash, helping you cover payroll, suppliers and day‑to‑day costs.

There are two common approaches:

• Invoice factoring – the provider (or their broker) advances a large portion of the invoice value and typically manages collections. This can be helpful if you want external credit control support.
• Invoice discounting – you retain control of collections; the facility is usually confidential and suits businesses that prefer to keep the funding arrangement invisible to customers.

Invoice finance is most suitable for UK limited companies and growing SMEs with B2B invoices (commonly 30–120 day terms). If your business needs cash fast and you have invoices owed by creditworthy customers, invoice finance may be a practical solution. Find out if you qualify – Free Eligibility Check

Why UK businesses choose invoice finance

Common cash flow challenges we hear from SMEs

• Late-paying customers causing short-term gaps
• Rapid growth that outstrips working capital
• Seasonal sales cycles and supplier bills due before receipts
• Large public-sector or trade customers with long payment terms

Key advantages of invoice finance

• Release cash tied up in invoices—often within 24–48 hours of approval
• Flexible facilities that grow with your turnover
• Option to outsource credit control via factoring
• Less need to use property as collateral

If you’d like tailored options, we can connect you to brokers who specialise in invoice funding. Get Quote Now

How invoice finance works with Fast Business Loans

Step-by-step: From enquiry to funding

1. Complete our short enquiry form (takes around 2 minutes) — Start Your Free Eligibility Check.
2. We match your business with specialist brokers and lenders that best fit your sector and invoice profile.
3. A broker or lender contacts you to verify details and outline potential offers.
4. Compare proposals, choose the most suitable, complete the provider’s due diligence, and draw down funds.

What information you’ll need ready

• Company name, turnover and trading history
• Typical invoice values and average debtor days
• Top debtor concentration (if any single customer represents a large proportion)
• Recent management accounts and aged debtor report

Compliance & transparency

Fast Business Loans introduces you to lenders and brokers — we do not provide regulated financial advice and we do not lend. Our service is free to businesses. All offers, fees and terms are provided by the lenders or brokers you choose to contact.

Start Your Invoice Finance Enquiry

Types of invoice finance solutions on our panel

Invoice factoring

Provider buys (or advances against) invoices and usually manages collections. Good for businesses that want to outsource debtor management. Pros: immediate cash and credit control; cons: customers may be aware of factoring.

Invoice discounting

Confidential facility where you keep collections and the facility is typically invisible to customers. Requires stronger internal credit control and is often suited to established firms.

Selective / spot invoice finance

Fund individual invoices on an ad hoc basis—useful if you only need occasional support for specific invoices.

Specialised variants

Solutions tailored to sectors such as construction, export finance, recruitment payroll support and agricultural supply chains.

Compare these options and get matched to a specialist broker quickly: Compare with a broker partner.

Learn more about invoice finance in depth on our pillar guide to invoice finance: invoice finance.

Eligibility criteria & typical costs

Minimum requirements our broker partners commonly look for

• UK-registered limited companies (trading generally 6+ months)
• B2B invoices with verifiable customers
• Reasonable debtor credit profiles (varies by lender)
• Clear, up-to-date accounting records

Indicative costs & fees

Costs depend on the provider, debtor risk and facility type. Typical elements include:

• Discount fee – a percentage of invoice value charged for advancing funds (commonly from around 0.5%–2% monthly depending on risk).
• Service/admin fees – set-up or monthly facility fees (varies).
• Interest on drawn amounts – for some facilities or blended products.

All figures are illustrative. Exact pricing depends on lender assessment. Get personalised invoice finance quotes — free and no obligation.

Industries we commonly support

We match businesses across many sectors that commonly use invoice finance:

• Construction
• Recruitment
• Manufacturing
• Wholesale & distribution
• Logistics & transport
• Tech & SaaS (B2B)
• Food & drink
• Healthcare and medical suppliers
• Creative and marketing agencies

See if we have a specialist for your sector: Free Eligibility Check

Case snapshot: realistic invoice finance scenario

Business profile

Mid-sized manufacturing firm, annual turnover £2.5m, invoicing large retailers on 60‑90 day payment terms.

Challenge

Growth in orders strained working capital—supplier invoices due before customer payments arrived, delaying new production runs.

Solution

Fast Business Loans introduced the business to an invoice discounting broker. The chosen facility advanced 85% of invoice value and retained confidentiality.

Outcome

Immediate cash flow improvement allowed continuous production, supplier discounts negated extra costs, and turnover increased without using property as security.

Discuss your scenario with a specialist

Comparing invoice finance to other funding routes

How invoice finance stacks up for common business needs:

• Overdraft – flexible but often more limited and can be withdrawn; invoice finance scales with sales.
• Term loan – good for fixed investments; invoice finance is working capital linked to sales.
• Asset finance – funds equipment purchases; invoice finance uses receivables as security.
• Merchant cash advance – repaid via card receipts; can be expensive compared with invoice finance for B2B firms.

Let us match you to the most appropriate route: Let us match you

How to get the most from your invoice finance facility

Practical tips

• Keep debtor ledgers and invoices accurate—lenders rely on clear records.
• Integrate your accounting software where possible to speed approvals.
• Aim to diversify debtor concentration to reduce risk-based fees.
• Review facility limits regularly as turnover grows.

Monitoring & reviews

Arrange periodic reviews with your broker or lender to renegotiate terms or increase limits as your business improves.

Why work with Fast Business Loans

• Access to a wide panel of specialist brokers and lenders experienced in invoice funding.
• Fast matching process designed to save time and surface relevant offers.
• Free service for businesses — no obligation to proceed after you’re matched.
• Data handled securely and shared only with relevant partners for your enquiry.
• We organise facilities from around £10,000 and upwards.

Get Started – Talk to an Invoice Finance Specialist

Invoice Finance FAQs

Is invoice finance the same as a loan?

No. Invoice finance is an advance against unpaid invoices rather than a conventional term loan. Depending on the product it may affect your balance sheet differently; your chosen lender will explain.

How quickly could funds be released?

Once approved, funds can often be released within 24–48 hours. Exact timing depends on the lender and the checks required.

Will my customers know I’m using invoice finance?

With factoring, customers are usually notified and pay the factor directly. With discounting, the arrangement is typically confidential.

Can start-ups use invoice finance?

Start-ups with minimal trading history may face limits. Most providers prefer some trading history and verifiable invoices, but selective/spot finance options can suit newer businesses.

What happens if a customer doesn’t pay?

Terms vary. Some factoring products include collections and bad debt protection; others pass unpaid risk back to you. Check each provider’s terms carefully.

Does invoice finance affect my credit score?

Submitting an enquiry via Fast Business Loans does not affect your credit score. Providers may perform checks later in the application process if you choose to proceed.

Do I need to finance all invoices?

Not necessarily. Selective or spot finance lets you fund specific invoices rather than the entire book.

Can we add bad debt protection?

Yes—some facilities offer protection or insurance options. Your broker will outline availability and cost.

What documents will the lender request?

Common requests include recent management accounts, VAT returns, bank statements and an aged debtors report. Exact requirements vary.

Does Fast Business Loans charge any fees?

Our service is free for businesses submitting enquiries. Any fees for the finance facility are charged by the lender or broker you select.

Submit Your Invoice Finance Enquiry

Ready to improve cash flow?

Invoice finance can release working capital quickly and help your business grow without waiting for customer payments. Fast Business Loans will match you with specialist brokers and lenders who understand your sector and can provide personalised quotes. The process is free and non‑binding.

• Complete a short enquiry (under 2 minutes)
• We match you with suitable providers
• You receive offers and decide which to pursue

Start Your Free Invoice Finance Eligibility Check

Fast Business Loans is an introducer that connects businesses to brokers and lenders. We do not provide regulated financial advice or lend directly. Facilities and terms are provided by the lender or broker you select and are subject to their assessment.