Invoice Finance: Unlock Working Capital from Unpaid Invoices

Summary: Invoice finance converts unpaid B2B invoices into working capital so your business can pay staff, buy stock and grow without waiting for customer payment terms. Fast Business Loans doesn’t lend — we match UK limited companies and SME finance teams with specialist lenders and brokers offering factoring, discounting and selective invoice finance. Complete a short, no‑obligation enquiry and get matched to the best providers for your sector. Free Eligibility Check (takes around 2 minutes).

What is invoice finance?

Invoice finance is a way to release cash that’s tied up in your unpaid B2B invoices. Instead of waiting 30–120 days for customers to pay, a provider will advance a percentage of the invoice value (typically 70–90%) so you have immediate funds to run the business. The remaining balance (minus fees) is paid to you when the customer settles the invoice.

How it works (quick flow)

1. You raise an invoice to a business customer for goods or services.
2. You submit the invoice(s) to an invoice finance provider or they collect directly from your sales ledger.
3. The provider advances up to around 70–90% of the invoice value within 24–72 hours.
4. When the customer pays, the provider releases the remaining balance minus agreed fees and charges.

Invoice factoring vs invoice discounting

Benefits of invoice finance for UK SMEs

• Improves cash flow quickly without adding traditional debt to your balance sheet.
• Helps you accept larger orders or offer longer payment terms to win business.
• Scales with sales — facilities often increase as your invoiced turnover grows.
• Gives predictable working capital for payroll, suppliers and investment.

Note: late payments are a common problem for UK businesses; unlocking invoice cash can reduce reliance on overdrafts or unsecured loans.

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Is invoice finance right for your business?

Invoice finance suits limited companies and growing SMEs who trade B2B and invoice other businesses. It’s commonly used by:

• Manufacturers and wholesalers fulfilling large orders.
• Recruitment and professional services waiting on client invoices.
• Distribution, transport and logistics firms with extended client terms.
• Seasonal businesses needing working capital ahead of busy periods.

If your business issues regular B2B invoices and needs cash quickly (from around £10,000 facility value upward), this can be a fast, flexible option. For more detailed guidance, read our full invoice finance resources or complete a quick enquiry to get matched with a specialist.

How Fast Business Loans connects you to the right lenders

1. Complete a short enquiry — basic company details, turnover, debtor profile and the funding need.
2. We review and match you with lenders/brokers experienced in your sector.
3. A broker or lender contacts you to discuss terms, run checks and prepare an offer.
4. You compare quotes and decide — there’s no obligation to proceed.

We only introduce you to partners who can help — we don’t provide finance or financial advice. Submitting an enquiry is not a loan application and won’t impact your credit score. Get Quote Now

Types of invoice finance facilities we can introduce

Invoice Factoring

Provider manages collections and advances funds. Suited where you’d like credit control support or have slower-paying customers. Can be recourse or non‑recourse (bad debt cover for approved debtors).

Invoice Discounting

Confidential facility where you keep collections in-house and the provider advances against your ledger. Suited to established businesses that want discretion.

Selective (Spot) Invoice Finance

Finance for specific invoices only — useful for one-off large orders or when you want flexibility without a full facility.

Sector/Contract Solutions

Construction and contract-specific funding that aligns with staged billing and retentions — lenders exist who specialise in these complexities.

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Typical costs & eligibility criteria

Costs vary by provider, debtor quality and facility type. Typical charges include:

• Discount rate or funding fee (charged on the advanced amount; ranges vary by risk).
• Service or management fee (for ledger administration or credit control).
• Arrangement or exit fees in some contracts.

What providers commonly look for

• UK limited company trading B2B (not sole traders).
• Consistent sales ledger with creditworthy debtors.
• Minimum turnover thresholds — many providers prefer established businesses.
• Transparent debtor information and clean accounting records.

Will invoice finance affect customer relationships? Confidential discounting keeps arrangements private. With factoring, providers manage collections professionally to protect your brand. Do you need personal guarantees? Some facilities may request security or director guarantees depending on circumstances — your broker will explain options.

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Documents & information to have ready

• Recent management accounts and bank statements (typically last 3–6 months).
• Aged debtor list and sample invoices.
• Company registration details and beneficial owner information.
• Contract/PO copies for large orders or construction work.
• Forecasts or pipeline information if available.

Tip: clear, accurate debtor data speeds up onboarding and improves the likelihood of competitive terms.

Case snapshot: Manufacturing firm unlocks £250k for growth

An SME manufacturing business had substantial orders but 60–90 day payment terms. Fast Business Loans matched them with a broker specialising in manufacturing and supply chain finance. Within 72 hours of approval they received an advance equal to 85% of invoices, releasing £250k of working capital. Result: suppliers paid on time, production expanded and a new sales contract was fulfilled.

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Invoice finance vs other funding options

Choosing the right option depends on whether you need cash linked to sales (invoice finance) or capital for a specific purchase (asset finance/loan). Speak to a specialist broker after your enquiry to compare quotes and terms.

Why UK businesses trust Fast Business Loans

• We save you time by matching you with lenders and brokers who understand your sector.
• Our service is free for business owners — we’re paid by the partner if you proceed.
• Enquiries are quick, secure and obligation‑free; they don’t affect your credit score.
• We commonly support facilities from around £10,000 upwards.

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Invoice Finance FAQs

How quickly can I receive funds?

Many providers can release an advance within 24–72 hours of facility approval. The full onboarding process depends on document supply and debtor checks.

What happens if my customer doesn’t pay?

With recourse facilities you remain responsible for unpaid invoices. Non-recourse factoring can transfer some bad-debt risk to the provider for approved debtors — terms vary by lender.

Will invoice finance affect my relationship with customers?

Invoice discounting is confidential and keeps relationships unchanged. Factoring involves the provider contacting debtors, but professional providers protect your brand and communication style.

Is there a minimum or maximum invoice value?

Some providers have minimum invoice values; selective facilities are flexible. Facilities often suit businesses seeking £10,000+ in funding.

Does applying affect my credit score?

Submitting an enquiry to Fast Business Loans performs a soft eligibility check only. Formal lender applications may involve credit checks — your broker will explain this before proceeding.

Do you charge businesses for using your matching service?

No. Our service is free for business owners — we’re paid by the broker or lender if you proceed with a facility.

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Ready to unlock cash flow?

If unpaid invoices are limiting growth, the quickest way to explore options is to complete our short enquiry form. It takes around two minutes — we’ll match you with lenders and brokers experienced in your sector so you can compare tailored quotes. Submitting an enquiry is not a loan application and carries no obligation.

Start Your Enquiry — Free Eligibility Check

Important: Fast Business Loans is an introducer — we do not lend and we do not provide financial advice. By submitting an enquiry you consent to us sharing your details with selected lenders or brokers who may contact you about finance options. Outcomes, terms and approval depend on lender underwriting and your business circumstances. Consider independent financial advice if you are unsure.

Reviewed by a commercial finance specialist. Last updated: 01 November 2025.

– What is invoice finance and how does it work? It lets UK SMEs unlock 70–90% of unpaid B2B invoice values upfront, with the balance (minus fees) released when the customer pays.
– What’s the difference between invoice factoring and invoice discounting? Factoring is usually not confidential and the provider manages collections, while discounting is typically confidential and you retain credit control, with similar advance rates.
– How quickly can I get funds through invoice finance? After approval, many providers advance funds within 24–72 hours depending on onboarding and debtor checks.
– Am I eligible for invoice finance as a UK SME? You’re typically eligible if you’re a UK limited company trading B2B with creditworthy debtors, clean records and sufficient turnover.
– How much does invoice finance cost? Costs usually include a discount rate (funding fee) on the advance plus a service/management fee, varying by sector, debtor quality and facility type.
– Will invoice finance affect my customer relationships or be confidential? Invoice discounting keeps arrangements confidential, while factoring involves lender contact with customers carried out professionally to protect your brand.
– What happens if my customer doesn’t pay the invoice? With recourse facilities you remain liable, whereas non‑recourse factoring can include bad‑debt protection for approved debtors.
– What’s the minimum facility size or invoice value? Facilities commonly start from around £10,000 and some providers set minimum invoice values, while selective (spot) invoice finance allows one‑off invoices to be funded.
– Do I need a personal guarantee or security for invoice finance? Some facilities may require security or a director’s personal guarantee depending on risk and structure, which your broker will explain.
– How does Fast Business Loans work and will an enquiry affect my credit score? Fast Business Loans is an introducer that offers a free, no‑obligation eligibility check that won’t affect your credit score and matches you with suitable UK lenders and brokers.