Invoice Finance for UK Businesses: Unlock Cash Flow with Fast Business Loans

Summary: Invoice finance helps UK limited companies release cash tied up in unpaid business-to-business invoices. It includes factoring, discounting and selective/spot finance and can be arranged from around £10,000 upwards. Fast Business Loans does not lend but quickly matches businesses with specialist lenders and brokers so you can compare proposals and choose the best fit. Complete a Free Eligibility Check to get matched in minutes.

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What is invoice finance and how does it work?

Invoice finance is a working capital solution that lets UK limited companies access a portion of the value of unpaid B2B invoices immediately, instead of waiting for customer payment terms (30, 60 or 90+ days). It turns your outstanding sales ledger into usable cash to pay suppliers, meet payroll, or take on new work.

Here’s how it typically works:

• You raise an invoice to a business customer as normal.
• You submit that invoice to the invoice finance provider or broker.
• The provider advances a percentage (commonly 70–90%) of the invoice value quickly.
• When the customer pays, the provider releases the remaining balance minus fees.

Invoice factoring vs. invoice discounting — key differences

• Factoring — the provider usually takes responsibility for collections and may contact your customers; suitable if you want credit control support.
• Discounting — confidential facility where you continue to collect payments; best if you prefer to retain customer relationships.
• Selective / spot finance — finance for individual invoices, not the full ledger; flexible for irregular needs.

Want to see if your invoices qualify? Start Your Free Eligibility Check — it takes under two minutes and won’t affect your credit score.

Why UK businesses choose invoice finance to stabilise cash flow

Long payment terms and late-paying customers are common reasons profitable firms struggle to pay day-to-day bills. Invoice finance solves this by turning unpaid invoices into working capital you can use immediately.

Common benefits include:

• Faster access to cash — reduce days sales outstanding (DSO).
• Facilities scale with your sales — funding grows as your invoices grow.
• Freed-up banking lines — keep overdrafts or loans for other uses.
• Option to outsource credit control with factoring.

According to market data, many UK SMEs increase liquidity and shorten cash cycles by using invoice finance. If you’d like a quick comparison of how this could work for your business, Get Quote Now.

Types of invoice finance facilities we can introduce you to

We match businesses with lenders and brokers offering a range of invoice finance products. Typical facility types include:

Invoice factoring

Factoring advances the majority of each invoice and usually includes a collections/credit control service. Best for businesses that want working capital plus collections support.

Invoice discounting

Discounting is confidential and keeps collections in-house; suitable for businesses that prefer to manage customer relationships directly.

Selective (spot) invoice finance

Finance on a per-invoice basis. Ideal for occasional cashflow shortfalls without committing the whole ledger.

Tell us about your invoices and we’ll match you with specialists — Start Your Enquiry.

Who is eligible for invoice finance?

Typical eligibility criteria lenders and brokers look for:

• Limited company structures (LTD, LLP, PLC) trading to other businesses (B2B).
• Clear, tradeable invoices issued to creditworthy business customers.
• Minimum facility sizes often start from around £10,000 in advances.
• Reasonable debtor diversification (not all invoices to a single customer).
• Up-to-date management accounts and a recent aged debtor list.

Documents & information lenders usually ask for

• Recent management accounts and bank statements.
• Aged debtor book and copies of major contracts or purchase orders.
• Details of the invoices you want to finance and customer names.

Submitting an enquiry does not affect your business credit score — Check Eligibility Without Affecting Your Credit Score.

Costs, fees and typical funding limits

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

• Discount rate / interest — a percentage charged on the advanced amount until the invoice is paid.
• Service / management fee — a monthly or annual fee for the facility and account management.
• Arrangement / set-up fees — one-off onboarding charges in some cases.

What you pay depends on the quality of your debtor book and the level of support required (e.g. non-recourse options are usually more expensive). Using a specialist broker can help negotiate better rates and terms.

Example (illustrative): a manufacturer uses factoring to unlock £250,000 in invoices. Advance rate 85%, discount rate 0.5% per month, management fee 0.5% monthly — costs are balanced against improved cash flow, on-time supplier payments and ability to accept new orders. Figures are illustrative only; actual terms depend on lender assessment.

For personalised quotes, Request Personalised Quote Options.

How Fast Business Loans connects you with invoice finance specialists

Fast Business Loans is an introducer — we don’t lend or give regulated advice. Our role is to save you time and increase your chances of a suitable match by connecting your business with lenders and brokers who specialise in invoice finance.

Our simple 4-step process

1. Complete a short enquiry form (under 2 minutes) — Free Eligibility Check.
2. We match your details with lenders/brokers best suited to your sector and needs.
3. Matched providers contact you with tailored proposals and next steps.
4. You compare offers and proceed directly with the lender or broker you choose.

Our service is free to use for businesses. We only pass your details to selected partners who can help with your request. Fast Business Loans organises funding from approximately £10,000 and upwards.

Learn more about invoice finance and how it could work for your business on our detailed invoice finance page.

Industries we commonly support with invoice finance

We frequently match companies in:

• Manufacturing and engineering
• Construction and subcontracting
• Wholesale and distribution
• Logistics and transport
• Retail & e‑commerce (B2B sales)
• Healthcare suppliers and clinics
• Hospitality businesses selling to other businesses

Not seeing your exact sector? Speak to us today — our panel covers many specialist lenders and brokers.

Case snapshot: Releasing £250k for a UK manufacturer (example)

Profile: Mid-sized manufacturer supplying components to multiple large distributors. Challenge: growth orders required immediate cash for materials but customers paid on 60–90 day terms.

Outcome: Introduced to a factoring broker who provided an 85% advance facility on eligible invoices. Funds were released within 48 hours of submission, enabling timely purchase of raw materials and delivery of a profitable contract. Client avoided taking on longer-term debt and maintained supplier relationships.

Figures are illustrative and not a guarantee. Results depend on lender assessment and your business details. Discover Your Funding Potential.

Invoice finance vs. alternative cash flow solutions

Invoice finance is one of several options to release working capital. How it compares:

• Bank overdraft / short-term loan: May be quicker for familiar customers but might be difficult to increase quickly and can restrict other borrowing.
• Asset finance: Funds fixed assets (machinery, vehicles) rather than working capital from sales ledger.
• Invoice finance: Directly linked to sales ledger and scales with turnover; suitable when cash is tied in receivables.

When invoice finance could be a better fit

• You have a substantial ledger of unpaid B2B invoices.
• You need a facility that grows with sales.
• You prefer not to secure facilities against property.

When another option might suit better

• You need long-term capital for acquisition or property purchase (term loan or commercial mortgage may be better).
• Your business sells primarily to consumers (B2C) — lenders prefer B2B invoices.

To explore the right solution for your situation, Explore Your Options with a Quick Call-Back.

Invoice finance FAQs

Is invoice finance a loan?

Invoice finance is not a traditional term loan. It advances cash against unpaid invoices and is repaid when customers settle those invoices. The facility’s mechanics differ from a loan but both are finance solutions.

How quickly can funds be released?

Once a facility is approved, advances against eligible invoices can be released within 24–72 hours. Exact timing depends on the lender and completeness of documentation.

Will my customers know I’m using invoice finance?

With factoring, customers are usually contacted by the provider. Discounting can be confidential so customers remain unaware—choose the facility that suits your customer relationship needs.

Can new companies use invoice finance?

Some providers support companies that can demonstrate regular B2B invoices to creditworthy customers. Eligibility depends on the invoices and the credit risk of your debtors.

What happens if a customer doesn’t pay?

Terms vary: recourse facilities typically require you to repay advances; non-recourse options include bad debt protection but may have higher costs. Always check terms with the lender or broker.

Information here is general guidance. Always review specific terms with the lender or broker you are matched with.

Compliance & transparency statement

Fast Business Loans is an introducer connecting businesses with lenders and brokers. We do not provide regulated financial advice or supply lending directly. Our service is free for businesses and there is no obligation to proceed once you receive proposals. Enquiries do not automatically trigger credit searches; lenders or brokers may perform checks only if you choose to proceed. We handle data securely — see our privacy policy for details.

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Ready to find the right invoice finance partner?

If unpaid invoices are holding your business back, Fast Business Loans can match you with specialist lenders and brokers who understand your sector and funding needs. Complete a short Free Eligibility Check and receive tailored proposals — typically within hours.

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– What is invoice finance and how does it work?
Invoice finance lets UK limited companies unlock 70–90% of unpaid B2B invoice value upfront, with the remaining balance (minus fees) released when customers pay.

– What’s the difference between invoice factoring and invoice discounting?
Factoring includes provider‑led collections and is usually disclosed to customers, while invoice discounting is typically confidential and you retain credit control; selective/spot finance lets you fund individual invoices as needed.

– Who is eligible for invoice finance in the UK?
UK LTD/LLP/PLC businesses selling B2B with a tradeable debtor book and invoices to creditworthy customers are commonly eligible, with facilities generally available from around £10,000.

– How quickly can I access funds through invoice finance?
Once a facility is approved, advances on eligible invoices are typically released within 24–72 hours.

– Does submitting the Fast Business Loans enquiry affect my credit score?
No—our quick enquiry is not a loan application and won’t affect your credit score, and any credit checks occur later only if you proceed with a chosen lender or broker.

– What facility size and advance rate can I expect?
Facilities often start from about £10,000 and scale with your sales ledger, with advance rates commonly between 70% and 90% of eligible invoice values.

– How much does invoice finance cost?
Typical costs include a discount rate (interest on the advance), a service/management fee, and sometimes setup fees, with pricing based on debtor quality, facility type, and support level.

– What happens if a customer doesn’t pay an invoice?
Recourse facilities require you to cover unpaid invoices, while non‑recourse options add bad‑debt protection for an additional cost.

– What documents will lenders usually ask for?
Expect to provide recent management accounts, bank statements, an aged debtor list, details of invoices/customers to be financed, and key contracts or purchase orders.

– How does Fast Business Loans help me get invoice finance?
We’re a free, no‑obligation introducer that matches your business with specialist UK invoice finance lenders and brokers so you can compare tailored proposals and choose the best fit.