What is invoice finance and how does it work?

Invoice finance is a way to unlock the cash tied up in your approved B2B invoices. Instead of waiting 30, 60 or 90 days for customers to pay, a lender or broker advances most of the invoice value up front. When your customer pays, the remaining balance (minus fees) is released to you.

Two common models:

• Invoice factoring: the funder often handles credit control and collections. Useful for faster growth or businesses that prefer outsourced debtor management.
• Invoice discounting (confidential): you retain control of collections; your customers typically won’t know you use a facility. Ideal for established businesses with in-house credit control.

Invoice finance can solve timing gaps in working capital, help meet payroll and supplier bills, support seasonal peaks and enable you to take larger contracts without cash strain.

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Key benefits at a glance

• Improve liquidity within 24–48 hours of submitting eligible invoices once a facility is live.
• Funding scales with your sales — facilities grow as your invoicing grows.
• Optional credit control support via factoring reduces admin burden.
• Selective or spot factoring options let you finance single invoices or customers.
• Confidential discounting keeps your operations private when required.

Note: terms, fees and availability depend on lender assessment and debtor credit quality.

How Fast Business Loans helps you secure the right invoice finance partner

We are an introducer — we don’t lend money or give regulated advice. Instead we:

1. Match your business to experienced invoice finance brokers and lenders who specialise in your sector and required facility size.
2. Reduce the time and admin of searching multiple providers — you complete a short form and we do the matching.
3. Pass your enquiry to partners most likely to give competitive, relevant terms.

Is invoice finance right for your business?

Typical situations where invoice finance helps

• Rapid growth creating long supplier payment cycles while customers take long to pay.
• Seasonal peaks where payroll and stock purchases need bridging.
• Large contracts with extended payment terms requiring working capital to deliver.
• Businesses looking to outsource credit control and collections.

Quick self-check before you enquire

• You supply B2B invoices to creditworthy businesses.
• Minimum facility expectations: lenders typically consider facilities from around £10,000 upward.
• Reasonable invoice volume and an aged debtor ledger (lenders will request details).
• Low concentration risk (not all invoices owed by a single customer), or if concentrated, that customer has strong credit.

If you’re unsure about any point, our matched partners can assess — the enquiry is free and without obligation.

Types of invoice finance we can help you explore

Full-service factoring

Advance typically 70–95% of approved invoice values. The factor may take over credit control and collections. Best for firms that want cash plus support managing debtors.

Confidential invoice discounting

You keep collections in-house and your customers usually remain unaware. Suits larger SMEs with established credit control teams.

Selective / spot factoring

Finance single invoices or customers as needed — ideal for one-off contracts or selective support without committing to a full facility.

Specialist solutions

Options exist for exports, construction supply chains, recruitment payroll bridging and other sector-specific needs. Availability depends on lender appetite and due diligence.

What to expect after you submit an enquiry

Typical process timeline:

1. We match your enquiry to lenders/brokers and pass your details (you approve the sharing on our form).
2. A partner contacts you for an initial call and to request documents (aged debtor ledger, recent accounts/management accounts, proof of invoices).
3. Indicative terms are discussed; soft credit checks may be used at this stage.
4. On approval and onboarding, advances can be released within 24–48 hours of submitting eligible invoices. Full onboarding may take 3–10 days depending on checks.

Talk to an Invoice Finance Specialist

Understanding costs, fees and typical facility sizes

Common cost elements:

• Discount rate / finance charge: charged on the advanced amount (varies by sector and debtor risk).
• Service charge: for administration, reporting and account management.
• Arrangement / setup fee: one-off fee on facility agreement.
• Audit / renewal fees: occasional charges for confirming your invoicing and controls.

Indicative market ranges (for guidance only; subject to lender status): discount rates might typically range from low single digits to higher teens depending on risk; service and arrangement fees vary. Your matched broker will provide full cost disclosure before you sign.

How invoice finance compares to other short-term options:

Real-world impact: three short examples

Construction supplier (anonymous): Used selective factoring to release cash against a backlog of certified invoices; funded materials for two larger projects and avoided delayed deliveries.

Recruitment agency: Confidential discounting smoothed payroll while the business grew headcount quickly; the agency retained client relationships and met weekly payroll runs.

Manufacturer: Factoring facility allowed rapid fulfilment of a large order without taking on expensive short-term loans; the supplier expanded production and secured repeat business.

Results vary by case. Each lender will assess your application individually.

Questions we hear most (FAQ)

What’s the difference between invoice factoring and invoice discounting?

Factoring commonly includes lender-led credit control and collections; discounting lets you retain debtor management. Both release a proportion of invoice value subject to approval.

How much can I release against an invoice?

Advances typically range from around 70% to 95% of approved invoice values. Exact levels depend on debtor creditworthiness, sector and facility type.

Will my customers know I’m using invoice finance?

With confidential invoice discounting they usually won’t. Factoring arrangements can involve notifying debtors — your broker will explain the options.

How quickly can I receive funds?

Once a facility is live, advances are usually released within 24–48 hours of submitting eligible invoices; initial onboarding can take a few days for checks and documentation.

Does enquiring affect my credit score?

No — an initial enquiry through Fast Business Loans does not affect your business credit score. Lenders may carry out formal credit checks later in their process.

What paperwork will lenders ask for?

Common requests: aged debtor ledger, recent management accounts or statutory accounts, company details and sample invoices. Requirements vary by partner.

Can I use invoice finance alongside other funding?

Yes — many businesses combine invoice finance with asset finance, loans or supplier facilities. Be transparent with potential partners so they can structure a suitable solution.

Why use Fast Business Loans instead of contacting lenders directly?

We save you time by matching your business to the most suitable lenders and brokers from our panel. Our service is free, quick, and reduces the risk of multiple unproductive approaches.

Next steps — get matched to the right invoice finance provider today

Complete a short enquiry (it takes under 2 minutes). We’ll match your business to the most relevant partners and you’ll receive contact and indicative terms — no cost and no obligation to proceed. Start with a Free Eligibility Check now.

Get Started — Free Eligibility Check

Helpful resource: If you want a deeper primer on options and differences, see our detailed guide to invoice finance.