Invoice finance and factoring for UK businesses

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.

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.

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.

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.

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.

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.

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 Ltd (FRN 1060885) is an Appointed Representative of White Rose Finance Group Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630772). We work with UK limited companies, LLPs, sole traders and partnerships.

No. We are not a lender. We are an invoice finance broker: we introduce UK limited companies, LLPs, sole traders and partnerships 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.

Tell us your annual turnover, who you invoice and on what payment terms, and whether you want the lender to run collections (factoring) or to keep them confidential (invoice discounting). Two minutes on the form or one call. We put the case to the invoice finance companies on our panel whose published criteria fit your sector and ledger, each one quotes its own advance rate, service fee and discount charge, and we lay the quotes side by side with the total annual cost in pounds. There is no fee to you, and enquiring does not affect your credit score.

The invoice finance lenders on the panel are listed by name in the table on this page and on our lender directory at capexpand.com/business-funding/lenders, with the size of book and the products each one writes. It runs from bank-owned factoring companies to independent providers that fund a single invoice or a start-up ledger. Naming a lender describes the panel and is not an endorsement; each one decides its own case, and panel composition changes over time.

Our panel currently includes 20 lenders for invoice finance, from names like Barclays, Lloyds, NatWest through to specialist funds, and 200+ lenders across all products. We do not send your details to all of them. We check criteria first and put your case only to the lenders whose requirements you actually fit. Panel composition changes over time and any figures are a guide, not a quote.

More often than with a loan, because the lender is advancing against your customers' invoices rather than your own trading history. On our panel 14 lenders will fund a start-up with invoices to factor, 15 accept businesses trading under a year, 8 accept minor adverse credit older than 24 months and 12 will consider a phoenix company or pre-pack (checked September 2026; panel composition changes over time). Every case is subject to the lender's own checks on you and on your debtors.

A new facility usually takes around a week to set up with an independent lender and nearer two with a bank, because the lender reviews your ledger and your customers before anything goes live. After that it stops being an application process: funds against a newly raised invoice normally land within 24 hours of uploading it, and you draw as you invoice rather than reapplying each time you win a bigger contract.

Not in the usual sense. You are releasing money you have already earned rather than borrowing against future profit, and the facility rises and falls with the sales ledger instead of sitting as a fixed monthly repayment. It is still a credit facility with fees, a notice period and, on a recourse facility, an obligation to make good an advance if the customer never pays, so read the terms as carefully as you would a loan agreement.