Invoice finance for UK businesses
Do the work, raise the invoice, then wait two months to get paid. Invoice finance closes that gap: a lender advances most of the invoice the day you raise it. We introduce limited companies and LLPs to a panel of invoice finance lenders.
By the CapExpand Team, led by Alex Beardsley
·Updated June 2026
Up to 95%
Of the invoice upfront
24 hrs
Once set up
Ltd & LLP
Who we help
No fee
You never pay us
Cash unlocked from your sales ledger, so trade keeps moving.The short version
If you sell to other businesses on credit terms and the wait for payment is choking your cash flow, invoice finance is one option worth understanding. The funding is tied to your sales ledger, so it grows as you grow rather than being a fixed loan amount. For a business doing steady B2B invoicing, many find it works out cheaper than a loan or a cash advance for day-to-day cash flow. We don't give advice, but we'll explain the options so you can decide.
What it actually is
You borrow against money your customers already owe you. Raise an invoice, the lender advances most of its value within about a day, and you get the rest, minus the fee, when the customer pays.
Unlike a fixed loan, the facility grows as your sales ledger grows. That is why it suits firms winning bigger contracts on long payment terms, like recruiters, wholesalers, manufacturers and B2B service firms.
How much you get upfront
80-90%
Typical advance
Up to 95%
Strong debtor books
70-85%
Newer or riskier sectors
The advance depends on your customers and sector, with construction lower for retentions. A general guide, not a quote.
The main types
Factoring
Ledger managed for youThe lender advances against invoices and runs your credit control, chasing payment from customers. Good for smaller firms who want collections handled.
Invoice discounting
Usually confidentialYou keep control of collections and your customers need not know. Suits larger, established businesses with their own finance team.
Selective / single invoice
Pick and chooseFund one invoice or one customer at a time, with no whole-ledger commitment. Flexible, at a higher fee per invoice.
Non-recourse
Bad debt protectionThe lender carries some of the risk if a customer fails to pay. Costs more, but protects you from a bad debt sinking the business.
What it costs
Service fee
Typically 0.5% to 3% of turnover
For running the facility. Usually lower for discounting than factoring.
Discount charge
Around 1.5% to 3.5% over base rate
Interest on what you actually draw, so an idle facility costs little.
Price moves with your turnover, sector, customer quality and whether you add bad debt protection. Watch the small print: minimum fees, notice periods and termination terms. We put the real annual cost in front of you, not just the headline. Figures are a general guide, not a quote.
Who it suits
It tends to be a good fit if:
- ✓You sell to other businesses on credit terms
- ✓You wait 30, 60 or 90 days to get paid
- ✓You are winning bigger contracts and feeling the squeeze
Not for you if you invoice consumers or take payment upfront, where a loan or cash advance fits better. Lenders look at your sales ledger, your customers, your turnover and trading history.
A note on who we take on
We currently work with UK limited companies and LLPs only. We complete non-regulated introductions and are not authorised by the Financial Conduct Authority, so we cannot take on sole traders or partnerships right now.
How it works
Tell us about your sales ledger
Your turnover, who you invoice, and your payment terms. Two minutes on the form or a quick call.
We match you to lenders
We put your case to the invoice finance providers on our panel best suited to your sector and size.
You compare facilities
We talk you through the advance rate, the fees and the terms, and flag anything in the small print.
Set up and draw down
Once the facility is live, you draw against invoices as you raise them. The cash lands fast.
Common questions
What is invoice finance, in plain English?▼
You sell to other businesses on credit terms and wait 30, 60 or 90 days to get paid. Invoice finance lets a lender advance you most of that money straight away, usually 80% to 90% of the invoice value and up to 95% for strong debtor books, then release the rest (minus their fee) once your customer pays. It turns your unpaid invoices into working capital you can use now.
What is the difference between factoring and invoice discounting?▼
With factoring, the lender also runs your sales ledger and chases payment from your customers, so they know a facility is in place. With invoice discounting, you keep control of collections and it is usually confidential, so your customers do not know. Factoring suits smaller businesses that want the credit control taken off their plate. Discounting suits larger, established businesses with their own finance function.
Can I finance just one invoice, or do I have to commit the whole ledger?▼
Both exist. A whole-turnover facility covers your full sales ledger and tends to be cheaper per pound funded. Selective or single invoice finance lets you pick individual invoices or customers to fund as and when you need it, with no obligation to put everything through. Selective is more flexible but usually carries a higher fee per invoice.
How much of each invoice do I get upfront?▼
Typically 80% to 90% of the invoice value, up to 95% for strong debtor books, and lower (around 70% to 85%) for newer businesses or sectors like construction where retentions apply. It is advanced within a day or so of the invoice being raised and verified, with the remaining balance, less the lender fees, paid once your customer settles.
What does invoice finance cost?▼
Two charges usually apply: a service fee, often a small percentage of your turnover for running the facility, and a discount charge, which is interest on the money you have drawn, commonly priced over the Bank of England base rate. The exact numbers depend on your turnover, sector, customer quality and how you use the facility. We will get the full cost laid out before you commit.
What is recourse and non-recourse?▼
With recourse factoring, if your customer never pays, you have to repay the advance. With non-recourse, the lender carries some or all of the bad debt risk, usually through bad debt protection, for a higher fee. If a customer going under would seriously hurt you, non-recourse is worth pricing up.
Is invoice finance regulated by the FCA?▼
Invoice finance is a commercial, business-to-business product and is generally not regulated as consumer credit by the FCA. Many providers follow the UK Finance Standards Framework for Invoice Finance and Asset Based Lending, which sets out fair treatment and a complaints route. CapExpand introduces limited companies and LLPs to lenders and is not an FCA-authorised firm.
Does CapExpand lend the money?▼
No. We are not a lender. We introduce UK limited companies and LLPs to a panel of invoice finance providers and help you compare them. We are paid a commission by the lender if a facility completes, never by you.
Sources
- UK Finance, Invoice Finance and Asset Based Lending
- British Business Bank, types of business finance
- FCA, when business lending is regulated
- Bank of England, base rate
Important information
CapExpand Ltd is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We work with UK limited companies and LLPs only, for business purposes. We are not a lender and we do not provide financial, tax or legal advice. We work with a panel of lenders whose particulars are available on request, and we receive commission from the lender if a facility completes, at no cost to you. All facilities are subject to status and the lender's own checks.
Cash stuck in unpaid invoices?
Tell us your turnover and who you invoice, and we'll come back with the lenders best placed to release it. Free to use, no obligation.