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Finance type

Invoice Finance

Working capital secured against your accounts receivable. Get up to ~80% of approved invoices today instead of waiting 30–90 days for customers to pay.

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Quick answer

Invoice finance (also called debtor finance or factoring) lets you draw cash today against your unpaid customer invoices, typically up to ~80% of the approved invoice value, with the remaining balance paid through once the customer settles. It is a working-capital solution rather than an asset finance product — useful when your business carries long debtor terms but needs cash now to fund operations, payroll or growth. Fees and margins vary by lender, customer quality and invoice volume; indicative all-in cost typically runs 1.5%–4% per month on funds drawn.

Who it suits

  • B2B business with creditworthy customers and 30–90 day invoice terms
  • Cash-flow gap between paying suppliers/staff and getting paid by customers
  • Growing fast and need working capital that scales with revenue
  • Construction, transport, manufacturing, recruitment, wholesale

Pros

  • · Cash today against invoices that would otherwise sit 30–90 days
  • · Scales automatically as your invoicing grows — no fixed loan limit
  • · No property collateral required — the invoices themselves are the security
  • · Often available to younger businesses where traditional lending is harder
  • · Can be confidential (your customers do not know you are using it) or disclosed

Cons

  • · More expensive than secured asset finance (working-capital pricing, not term-loan pricing)
  • · Only as good as your customers — bad-debtor risk usually sits with you
  • · Reporting requirements (invoice ledger, customer aging) can be ongoing
  • · Some lenders require a minimum monthly invoice volume

At a glance

Product typeWorking capital, not asset finance
SecurityAccounts receivable (the invoices)
Typical advance70–85% of approved invoice value
SettlementRemainder paid once customer pays the lender
Cost~1.5%–4% per month on funds drawn (indicative)
TermRolling — facility, not term loan
Best fitB2B with creditworthy customers and 30–90 day terms
Confidential / disclosedBoth available depending on lender

Invoice finance pricing varies widely by lender, customer quality and invoice volume. Always model the all-in cost across discount fee + service fee + facility fee before committing.

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Related finance options

Hire purchase

Different product — for buying assets rather than funding working capital.

Equipment finance

For funding business equipment purchases on a fixed term.

Frequently asked questions

Invoice finance (also called debtor finance or factoring) lets your business draw cash against unpaid B2B customer invoices instead of waiting 30–90 days for customers to pay. The lender typically advances 70–85% of approved invoice value upfront and pays through the balance (minus fees) once the customer settles.