Invoice Factoring and Invoice Finance for UK Businesses

Invoice Finance Facilities We Arrange

Invoice Factoring works only in invoice finance and covers six facility types. That range matters, because the right answer depends on how your business invoices, who your customers are and how much of the collection work you want to keep. Each facility below is provided by a funder, and our role is to identify the one that fits and arrange it for you.

Funding with collections included

Invoice factoring releases an agreed share of each approved invoice, and the funder's credit control team then collects payment from your customers. It suits businesses that want cash flow funding and help with the sales ledger in a single arrangement. Confidential factoring keeps the funder in the background so customers continue to deal with you, although the eligibility conditions are usually stricter.

Funding that leaves you running the ledger

Invoice discounting is generally aimed at established companies with their own credit control. You keep chasing customers yourself while the funder advances money against the ledger as a whole. If you only need occasional support, selective and single-invoice factoring lets you choose particular invoices or customers rather than committing everything you bill.

Overseas sales and payment risk

Export factoring deals with invoices raised to buyers abroad, where longer terms, currency and cross-border collections add complications. Bad debt protection addresses a different problem: the risk that an approved customer becomes insolvent and never pays. It can sit alongside a factoring facility or be considered on its own.

How Working With Invoice Factoring Works

Every enquiry follows the same practical route, from your first message to a signed agreement with a funder. The aim is a proposal you understand fully before you commit to anything.

1. Tell us about the business. Share turnover, monthly invoice value, customer payment terms and the cash gap you want to close. Mention disputed invoices, existing finance or a single large customer at this stage.
2. The ledger and the need are reviewed. Invoice Factoring looks at your invoices, customers and funding requirement to work out which facility type fits and which features matter, such as confidentiality or protection.
3. A suitable funder is approached. The funder carries out its own assessment and due diligence, then sets the advance, fees and terms it is prepared to offer.
4. You weigh up the proposal. The terms, costs and responsibilities are explained in plain language so you can decide whether to proceed.
5. The facility goes live. Once you sign with the funder, you submit invoices under the agreement and the funder releases cash against those it approves.

Which Businesses Turn Unpaid Invoices Into Working Capital?

Across the UK, invoice factoring is used mostly by firms that sell to other businesses and then wait to be paid. Manufacturers, wholesalers, recruitment agencies, haulage firms, construction subcontractors and business service providers often find that slow-paying customers tie up the cash needed for payroll, materials and new contracts. Where customers are creditworthy and invoices relate to completed work, a facility can turn those receivables into usable funds.

Can a smaller or newer company apply?

Some funders consider start-ups and smaller companies, while others look for an established trading record or a minimum turnover. A business with one dominant customer may be assessed differently from one with a spread of accounts. Invoice Factoring takes these points into account before suggesting where an application is likely to be realistic.

When invoice finance is unlikely to help

Sales to consumers, invoices for unfinished work and heavily disputed accounts usually fall outside funders' criteria. Invoice finance also cannot repair thin margins, so if the real problem is profitability rather than timing, we will tell you that plainly.

Invoice Finance Costs at a Glance

Funders usually charge a service fee for running the facility and a discount charge on the money you draw, which works in a similar way to interest. Depending on the agreement, there may also be set-up fees, minimum charges, audit costs, fees for credit protection and a notice period or exit charge. The total depends on turnover, invoice volumes, customer quality and how much of the available funding you use.

As an illustration only, a funder advancing 85% against an approved £10,000 invoice would release £8,500 at the outset, with the remaining £1,500 paid once your customer settles, less the agreed charges. This example is not a quotation, and all funding is subject to the funder's assessment and agreement.

Invoice Factoring sets out the complete cost rather than one percentage, so you can compare the cash a facility releases with what it costs to run. Any fees connected with arranging the facility should be confirmed in writing before you proceed.

Why Businesses Enquire With Invoice Factoring

Many companies first come across invoice finance through a single funder's sales team, which naturally presents its own product. Because our work spans six facility types, the recommendation starts from your situation instead of one product. We begin by understanding the business, its invoices and its customers, not a headline rate.

Customer relationships are part of the decision

With most factoring, the funder contacts your customers about payment, so the way that happens matters. Collections, payment instructions and dispute handling are treated as part of the choice, and we ask about any sensitive accounts before a facility is proposed.

Accurate information from day one

We ask for the full picture up front, including overdue debts, disputes and existing security over the business. That avoids proposals that look attractive at first and then change once the funder completes its due diligence.

Will Your Customers Know About the Facility?

Under standard factoring, customers are told to pay the funder and may hear from its credit control team, so they will know a facility is in place. Many businesses find that acceptable, particularly where the funder handles reminders professionally and refers disputes back to them. Where discretion matters, a confidential or discounting arrangement keeps your own name on statements and reminders, subject to the funder accepting the business on those terms.

Start Your Enquiry for Cash Flow Funding

The simplest way to begin is to request a free quote using the form on this page. Include your annual turnover, typical monthly invoicing, customer payment terms and the amount currently outstanding, along with a note on whether you want collection support or a confidential arrangement. You can also email info@invoicefactoring.org.uk if you would rather write to us directly.

Invoice Factoring will review what you send, come back with any questions and explain which facility types look suitable. The quote is free and carries no obligation, so you can weigh the proposal against your other options before deciding.