What is invoice finance?
Invoice finance allows a business to borrow against the value of money owed to it by customers. Instead of waiting 30, 60 or 90 days for invoices to be paid, the business receives an advance — typically 80–90% of the invoice value — almost immediately. When the customer pays, the remaining balance is released, minus the lender's fees.
It's a revolving facility: as new invoices are raised, they can be added to the facility, giving the business continuous access to working capital without the fixed repayment schedule of a term loan.
The invoice finance process — step by step
You complete work and raise an invoice to your customer for, say, £10,000 with 60-day terms.
You upload the invoice to your lender's platform. They advance 85% (£8,500) to your bank account — usually within 24 hours.
Your customer pays the invoice at 60 days. The lender receives payment (in factoring) or you collect it (in discounting).
The remaining £1,500 is released to you, minus the lender's fees — typically a discount charge (like interest) and a service fee.
How much does invoice finance cost?
Invoice finance has two main cost components:
Total annual cost for a typical facility often works out at 3–6% of funded turnover. The cost reduces significantly as your turnover grows and your track record with the lender improves.
Share your monthly invoicing volumes and we'll model the cost across multiple invoice finance providers and compare to alternative options.
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