Invoice finance for UK businesses: unlock cash tied up in unpaid invoices

Summary: Invoice finance converts unpaid customer invoices into immediate working capital so you can cover payroll, buy stock or fund growth without taking on new long-term debt. Fast Business Loans does not lend money — we quickly match UK limited companies and SMEs (loan needs from around £10,000 and up) with specialist invoice finance brokers and lenders for free, no-obligation quotes. Complete a short enquiry to get matched and receive tailored options fast: Get your Free Eligibility Check.

Quick snapshot: is invoice finance right for your business?

• You raise B2B invoices to creditworthy businesses (often 30–120 day payment terms).
• Your business turnover and facility requirement is typically from about £10,000 upwards.
• You need faster access to cash tied up in invoices without waiting for customer payments.
• Your sales ledger is predictable enough that a funder can assess debtor credit quality.

Want to check quickly? Get a Free Eligibility Check and we’ll match you to brokers who specialise in your sector.

What is invoice finance and how does it work?

Invoice finance is an umbrella term for products that let businesses access cash against unpaid invoices. It accelerates cash flow by advancing a percentage of the invoice value up front, with the balance (less fees) released when the debtor pays.

Simple step-by-step:

1. You raise an invoice to a business customer.
2. You submit that invoice to a finance provider or broker.
3. The provider advances typically 70–90% of the invoice value (advance rate depends on debtor risk).
4. The customer pays the invoice to the provider (or to you, depending on the facility).
5. The provider pays you the remainder minus fees and any reserves.

Invoice factoring vs invoice discounting vs selective facilities

There are three common approaches:

• Invoice factoring – the funder often takes control of credit control and collections. Customers may be notified. Good for businesses wanting outsourced debtor management.
• Invoice discounting – confidential facility where you retain control of collections; customers need not know. Ideal for businesses that prefer to keep finance invisible.
• Selective or spot finance – finance a single invoice or chosen invoices rather than the full ledger. Useful for one-off needs or testing the market.

Typical differences at a glance:

If you’re unsure which fits, our brokers can compare options. Compare options with a specialist broker.

Benefits of invoice finance for UK SMEs

• Improve cash flow instantly — access most of an invoice value within 24–48 hours of submission once set up.
• Scale faster — reinvest working capital in purchasing stock, hiring or tendering for larger contracts.
• Negotiate with suppliers — better payment terms or volume discounts become possible with improved liquidity.
• Flexible cover — selective facilities let you finance only the invoices you choose.
• Optional credit control support — factoring packages can reduce admin time chasing payments.

Costs, fees and what to watch out for

Costs vary by provider and debtor profile. Typical charges include:

• Discount charge (like interest) — charged on funds advanced, usually quoted as a percentage per annum or per invoice term.
• Service fee — a percentage of turnover or a fixed monthly fee for administration and credit control.
• Other fees — set-up, audits, minimum usage or reporting charges may apply.

Keep in mind: offers depend on debtor creditworthiness, sector risk and contract length. No provider can guarantee acceptance — that’s why a quick, no-obligation enquiry helps you compare real options.

Eligibility criteria and documents required

Common requirements:

• Company trading details (limited company or SME entity).
• Typical invoices and recent sales ledger.
• Details of major debtors and payment terms.
• Basic financials (management accounts, VAT returns) depending on facility size.

Start-ups with strong, creditworthy customers can sometimes qualify even with limited trading history — lenders focus on debtor quality as much as trading length.

Free Invoice Finance Eligibility Check

The Fast Business Loans matching process

We make introductions in four simple steps:

1. Complete our short enquiry form (takes under 2 minutes).
2. We match your details to specialist brokers and lenders suited to your sector and invoice profile.
3. Matched partners contact you with eligibility feedback and indicative quotes.
4. You compare offers and decide — there’s no obligation to proceed.

Data security is central: we share your information only with relevant partners, and initial enquiries do not affect your business credit score. Typical response times are within hours on business days.

“Fast Business Loans matched us with a broker who understood construction payment cycles — we had a facility ready within days.” — example testimonial (for future use)

Types of businesses using invoice finance (use cases)

Growth and scaling

Businesses winning new, larger contracts can use invoice finance to fund materials and labour without waiting for payments.

Seasonal industries

Retailers and hospitality firms smooth seasonal swings by converting peak-season sales into working capital for off-season costs.

Construction & projects

Contractors with long payment cycles can fund on-site costs and equipment while awaiting milestone payments.

Exporters

Exporters with extended terms to overseas buyers can access funding against export invoices (subject to provider terms).

Invoice finance vs other funding options

When to choose invoice finance:

• When cash is tied up in receivables and you want short-term, scalable funding that grows with sales.
• When you prefer borrowing against current assets rather than taking a fixed-term loan or overdraft.

Consider traditional business loans or asset finance if you need long-term capital for equipment, property or restructuring existing debt. Unsure? Discuss the best fit for your business.

How to prepare for a strong enquiry

• Tidy your sales ledger — clear, accurate invoices speed assessments.
• Diversify debtors where possible — fewer customers representing a large percentage of invoices increases risk in a funder’s view.
• Document large contracts and payment terms.
• Be ready to explain how you use the cash (growth, suppliers, payroll).

Pro tip: be transparent with customers about third-party involvement if using factoring — it avoids surprises and preserves relationships.

Frequently asked questions

How quickly can I access funds after approval?

Once a facility is approved, funds can often be released within 24–48 hours of submitting eligible invoices. Exact timings depend on the chosen lender or broker and verification steps.

Will my customers know I’m using invoice finance?

It depends. Factoring typically involves notifying customers, while invoice discounting or confidential selective finance can keep arrangements private.

What happens if a debtor doesn’t pay?

Arrangements vary. Many providers have procedures for recoveries; some offer bad debt protection for eligible invoices at additional cost. Always check the provider’s policy on defaults.

Can I finance invoices from overseas customers?

Yes, some providers can finance export invoices, but terms depend on the country, currency risk and debtor creditworthiness.

Is selective or single-invoice finance available?

Yes — many providers offer spot or selective finance to cover single invoices or chosen customers without committing your whole ledger.

Does applying affect my credit score?

No — an initial enquiry via Fast Business Loans does not impact your business credit file. Lenders may run checks later if you proceed, and they will explain this before doing so.

Are there minimum turnover or invoice value requirements?

Providers differ, but Fast Business Loans typically works with businesses seeking facilities from around £10,000 upwards. Our matching will put you in touch with partners able to consider your scale.

Start your Free Invoice Finance Enquiry

Ready to unlock cash flow?

Invoice finance can be a fast, flexible way to free working capital and support growth without long-term borrowing. Fast Business Loans is here to save you time by matching your business with specialised brokers and lenders who understand your sector.

What happens after you submit the enquiry:

• We screen your submission and match it to relevant partners.
• Matched brokers/lenders contact you with eligibility feedback and quotes.
• You compare offers and choose the best fit — no obligation to proceed.

Get invoice finance quotes now — Free Eligibility Check

Explore more about invoice finance options and how they can help you on our main invoice finance guide: invoice finance.

– What is invoice finance and how does it work?
Invoice finance lets UK SMEs unlock cash tied up in unpaid B2B invoices by advancing typically 70–90% upfront and releasing the balance (minus fees) when the customer pays.

– How quickly can I get cash from my unpaid invoices?
Once your facility is set up, funds are usually available within 24–48 hours of submitting eligible invoices.

– What’s the difference between invoice factoring, invoice discounting and selective invoice finance?
Factoring includes outsourced credit control and customer notification, discounting is usually confidential with you collecting payments, and selective finance lets you fund chosen invoices only.

– Am I eligible for invoice finance if I’m a start-up or have limited trading history?
Yes—many lenders focus on the credit quality of your business customers, so start-ups invoicing creditworthy buyers can often qualify.

– Will my customers know I’m using invoice finance?
Customers are typically notified with factoring, while discounting and many selective facilities can remain confidential.

– What are the typical costs and fees for invoice finance?
Expect a discount charge (interest on funds advanced) plus a service fee, with possible setup, audit or minimum usage fees depending on the provider.

– What’s the minimum facility size and who is invoice finance suitable for?
Facilities usually start from around £10,000 and scale with your sales ledger, making them suitable for UK limited companies and SMEs invoicing other businesses.

– What happens if a debtor doesn’t pay—can I get bad debt protection?
Many providers offer optional bad debt protection (non-recourse) on eligible invoices and have recoveries processes, so check coverage and costs in the quote.

– Does submitting a Fast Business Loans enquiry affect my credit score or commit me to anything?
No—our quick enquiry is free, does not impact your credit score, and carries no obligation to proceed.

– How does Fast Business Loans help and how soon will I receive quotes?
We’re not a lender; we match you with specialist UK invoice finance brokers and lenders who typically respond within hours with eligibility feedback and no-obligation quotes.