Why invoice finance can transform your cash flow

Late payments and long customer terms can squeeze working capital, slow growth and create risky cashflow gaps. Invoice finance unlocks the cash tied up in invoices so you can pay suppliers, meet payroll and invest in opportunities without waiting 30–120 days for customer payment.

Fast Business Loans does not lend. We connect limited companies and SMEs with brokers and lenders who specialise in invoice funding. Use our quick, no-cost enquiry to see which partners could help — Free Eligibility Check.

What is invoice finance?

Invoice finance is a form of working capital where a lender advances a percentage of your outstanding invoices so you receive cash now rather than later. The lender may also handle collections and credit control in the case of factoring. Typical advance rates vary by sector and debtor quality but commonly range between 70% and 95% of the invoice value.

Invoice finance is especially useful when your business has sales on credit, tight supplier terms, or seasonal peaks requiring short-term funding.

Types: Invoice factoring, invoice discounting and selective finance

Invoice Factoring

With factoring, the funder typically takes responsibility for collections and credit control (subject to the agreement). This can free internal resources and speed up cashflow, but customers may be aware their invoices are managed by a third party.

Invoice Discounting

Invoice discounting is confidential: you keep control of collections while receiving an advance against invoices. It suits businesses that prefer to maintain direct customer relationships and credit control functions.

Selective / Spot Invoice Finance

Selective or spot finance lets you fund specific invoices rather than the whole ledger. It’s flexible for one-off needs or testing invoice finance without committing your entire ledger.

Compare Invoice Finance Options

How Fast Business Loans helps

We make the process fast and simple. Our role is to match you with the lenders and brokers most likely to offer competitive terms for your circumstances.

1. Complete a short enquiry (takes under 2 minutes).
2. We match your business to suitable brokers and lenders from our vetted panel.
3. Partners contact you to discuss options and request supporting documents.
4. Receive tailored quotes and choose the best solution — no obligation to proceed.

Quick reassurance: Submitting an enquiry does not affect your credit score. Our matching service is free and no obligation. Get Quote Now.

Benefits of invoice finance for UK SMEs

• Immediate working capital: Turn unpaid invoices into money to run and grow the business.
• Improved cashflow forecasting: Predict cash available and plan with confidence.
• Support for growth: Fund new contracts without waiting for customer payments.
• Stronger supplier terms: Pay suppliers promptly and negotiate better rates.
• Flexible options: Choose whole-ledger, selective or confidential solutions to suit you.

“We freed up working capital to take on two new contracts — invoice finance arrived within a week of finalising terms.” — Managing Director, Manufacturing SME (client anonymised)

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Is invoice finance right for your business?

Use this quick checklist to see if invoice finance could work for you:

• Your business issues invoices to other businesses with 30+ day payment terms.
• You have recurring sales or invoices of reasonable size (options available from £10,000 upwards).
• Late payments or seasonal peaks are creating cashflow pressure.
• You want to scale quickly or cover payroll and supplier costs between invoicing cycles.

Industries commonly served include manufacturing, logistics, recruitment, professional services (limited companies), construction suppliers and wholesale/distribution. If you’re unsure, our partners will assess fit once you submit an enquiry: See If You Qualify.

Costs, fees & key considerations

Invoice finance costs vary by provider, debtor credit quality and the structure chosen. Typical costs to expect include:

• Discount/finance fee: A percentage of the invoice value charged while funds are advanced (varies by risk and term).
• Service/management fees: For administration, credit checks or credit control (more common with factoring).
• Setup or arrangement fees: One‑off onboarding charges in some agreements.
• Minimum contract terms or notice periods: Check each lender’s conditions before agreeing.

Fast Business Loans introduces you to potential providers — actual terms and pricing are set by lenders and brokers following their assessment.

Preparing your application

Having certain documents ready speeds the process. Typical items brokers may request include:

• Recent management accounts and latest VAT returns.
• Aged debtor list and sample invoices.
• Details of major customers and any long-term contracts.
• Proof of business structure and identity for directors.

Your Fast Business Loans enquiry is brief. After submission, matched partners may request the documents above to prepare a firm quote.

Real-world scenarios (illustrative)

Recruitment agency bridging payroll

A recruitment agency with weekly payroll and 60–90 day customer terms used invoice discounting to access 85% of invoice values, allowing uninterrupted payroll while bidding for new contracts.

Manufacturer waiting on long payment terms

A manufacturer with 60-day customer terms used whole-ledger factoring to unlock working capital, fund raw materials and grow production without taking on traditional bank debt.

Illustrative only; outcomes depend on lender assessment and customer credit.

Invoice finance vs alternatives

Consider alternatives to see which best suits your needs:

• Overdrafts: Useful for short-term top-ups but often more suitable for smaller, short spikes.
• Business loans: Good for one-off investments; may require security and longer-term commitment.
• Asset finance: Ideal for purchasing equipment rather than funding invoices.
• Merchant cash advance: Based on card sales; not tied to invoices.

Invoice finance is often the best fit when cash is tied up specifically in debtor balances and you need a scalable, repeatable solution.

FAQs

What percentage of an invoice can I advance?

Advance rates typically range from about 70% up to 95%, depending on debtor strength, sector and product type. Exact percentages depend on the lender’s assessment.

How fast can funds be released after approval?

Once terms are agreed and paperwork completed, many funders can release funds within 24–72 hours. Timing varies by provider and complexity of the deal.

Do I need to finance my entire sales ledger?

No. Options include whole-ledger, selective/spot funding, and confidential discounting. Your choice depends on your preference for confidentiality and control.

Will my customers know I’m using invoice finance?

It depends. Factoring is usually visible to customers; discounting is often confidential. Discuss confidentiality preferences with your matched broker.

Can I apply if I’ve been refused before?

Possibly. We work with a broad panel of partners and may be able to match you with lenders who consider different criteria.

Does applying impact my credit score?

No — submitting the Fast Business Loans enquiry does not impact your credit file. Lenders may carry out checks later if you progress an application.

Speak to an Invoice Finance Specialist

Next steps

Tell us a few details about your business and funding need → we match you with trusted brokers and lenders → receive tailored, no‑obligation quotes → choose the best partner for your business. It’s quick, free and does not affect your credit score.

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Compliance & disclosure notes

Fast Business Loans is an introducer and does not provide loans or regulated financial advice. Matches and finance offers are provided by third‑party brokers and lenders and are subject to their terms, status checks and eligibility criteria. Submitting an enquiry does not constitute an offer. All finance is subject to status and provider assessment. If in doubt, seek independent financial advice.

For more detail on invoice finance options and how they work, you can also read about invoice finance providers and products on our dedicated page about invoice finance.