Complete Invoice Finance Guide

Invoice Finance for
UK Businesses

Release cash tied up in eligible B2B invoices instead of waiting for customers to pay. Facility size, advance rate and availability depend on your debtor book, trading record and lender criteria.

£10k - £500k Available
Up to 90% Invoice Value
Eligible B2B Invoices
Debtor Quality Assessed

What is Invoice Finance?

Invoice finance releases cash tied up in unpaid invoices, providing immediate working capital while you wait for customer payments.

How It Works

1. Invoice Raised

You raise invoices to your customers as normal for goods or services provided.

2. Agreed Advance

The provider advances an agreed proportion of eligible invoice value after its checks and verification.

3. Customer Payment

When customer pays, you receive balance minus service fee (typically 0.5-3%).

Invoice Finance Benefits

  • Immediate cash flow improvement
  • Grow sales without cash flow strain
  • No fixed monthly repayments
  • Scale with your business growth
  • Bad debt protection available

Types of Invoice Finance

Different invoice finance solutions to match your business needs and customer relationships

Invoice Factoring

The factor manages your sales ledger and collects payments directly from customers. Higher advances, full service.

✓ Best For:

Businesses wanting to outsource credit control

Advance Rate:

70-90% of invoice value

Service Fee:

1-3% of turnover

  • Professional debt collection
  • Bad debt protection available
  • Higher advance percentages

Invoice Discounting

You retain control of sales ledger and customer relationships. Confidential funding that customers don't see.

✓ Best For:

Businesses maintaining customer relationships

Advance Rate:

60-85% of invoice value

Service Fee:

0.5-2% of turnover

  • Confidential funding arrangement
  • Maintain customer control
  • Lower service fees

Selective vs Whole Turnover

Choose how much of your invoice book to include in the finance facility

Selective Invoice Finance

Choose which invoices to finance on a case-by-case basis. Perfect for occasional cash flow needs.

How it works:

  • • Select individual invoices to finance
  • • No ongoing commitment required
  • • Pay fees only on invoices used

Perfect for:

  • • Seasonal businesses
  • • One-off cash flow needs
  • • Testing invoice finance

Whole Turnover

Finance all eligible invoices automatically. Better rates and higher advances for ongoing cash flow management.

How it works:

  • • All invoices automatically financed
  • • Ongoing facility with better terms
  • • Higher advance rates available

Perfect for:

  • • Growing businesses
  • • Regular cash flow management
  • • Maximum facility utilization

Invoice Finance Requirements

Eligibility depends on the sales ledger, debtor quality, contracts, disputes, concentration and the applying business.

Eligibility Requirements

  • B2B Sales: Invoice business customers, not consumers
  • Credit Terms: Minimum 7-day payment terms
  • Turnover: Usually £50K+ annual turnover
  • Customer Quality: Creditworthy business customers
  • No Minimum: Many providers have no minimum turnover

Typical Costs & Terms

Service Fees:

Typically 0.5%–3% of turnover, depending on facility type and volume.

Interest / Discount Margin:

Typically charged at a margin above base rate, on funds drawn only.

Advance Rate:

Typically 70%–90% of invoice value.

Rates shown are indicative and based on published lender pricing. The actual rate available to you depends on the lender's assessment of your business, the deal, and your circumstances. These figures are not quotes or offers of finance.

Factoring or invoice discounting?

With factoring, the provider usually manages the sales ledger and collections. With invoice discounting, the business normally retains credit control; confidential facilities may be available to businesses with suitable systems. Neither option is automatic, and lender criteria apply.

If the cash requirement is not supported by eligible invoices, compare unsecured working-capital finance instead.

Invoice finance guidance

Why Choose LoanLogic as Your Broker?

Independent broker with 15+ years finance experience, now focused exclusively on helping South West businesses

15+ Years in Finance

Our founder brings over 15 years of finance industry experience to every client relationship. We understand funding from both sides - lenders and borrowers - giving you the insights you need.

Commission-Based Service

We earn commission from lenders when you're successfully funded. That means our service is completely free to you, with no upfront fees or hidden costs. We only succeed when you do.

Whole-of-Market Access

As an independent broker, we search 70+ specialist lenders to find your best match. We work for you, not the lenders, ensuring you get competitive rates and terms.

Ready to Improve Your Cash Flow?

Check whether your invoices and debtor book may support a suitable facility, or use the urgent route if timing matters.

Commission-based broker • No upfront fees • South West specialists

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