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Invoice finance

Invoice finance

Turn unpaid invoices into working capital, with up to 90% of eligible invoices advanced and 95% to 100% in some sectors. We compare factoring, confidential invoice discounting and selective facilities so the structure fits how you trade.

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No credit search and no upfront fee.

of eligible invoices advanced
Up to 90%of eligible invoices advanced
in some sectors, such as recruitment and retail
95% to 100%in some sectors, such as recruitment and retail
factoring, discounting or spot facilities
Whole ledger or single invoicesfactoring, discounting or spot facilities
customers need not know
Confidential optionscustomers need not know

What is invoice finance?

Invoice finance is a facility that advances cash against your unpaid business-to-business invoices, so you do not wait 30, 60 or 90 days for customers to pay. A lender typically advances up to 90% of each eligible invoice straight away and pays the balance, less its fees, when your customer settles. The facility grows as your sales grow, because the funding available is tied to your debtor book rather than a fixed loan amount.

Factoring vs invoice discounting

Factoring

The lender runs your sales ledger and collects payment from your customers. It suits smaller or faster-growing businesses that want credit control handled for them. Customers will know a finance provider is involved.

Invoice discounting

You keep control of the sales ledger and collect payments yourself. Confidential invoice discounting (CID) means your customers are not told about the facility. Lenders usually look for established credit control and a track record of reliable debtor collections.

Selective or spot invoice finance

Instead of funding the whole ledger, you choose individual invoices or customers to finance. It suits businesses with occasional large invoices or lumpy cash flow that do not need a whole-turnover facility.

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Invoice finance

How it works

  1. 1

    You raise an invoice

    To a business customer for work done or goods delivered.

  2. 2

    The lender advances cash

    Against it, typically up to 90% of the invoice value, often more in some sectors.

  3. 3

    Your customer pays

    On normal terms, either to a trust account (discounting) or to the lender (factoring).

  4. 4

    The balance is released

    To you, less the lender's fees.

  5. 5

    The facility revolves

    So new invoices create new availability as you trade.

Who it suits

Invoice finance suits B2B businesses with a reliable debtor book and payment terms of 30 days or more, including:

What lenders look at

Debtor quality
The credit strength of your customers matters as much as your own.
Concentration
Heavy reliance on one or two customers can reduce the advance rate.
Aged debt
Lenders review your aged debtor report and how quickly invoices are paid.
Disputes and credit notes
A clean history of few disputes supports a higher advance.
Contract terms
Retentions, stage payments and contra trading can affect what is fundable.
Credit control
For confidential discounting, lenders want evidence of an established collection process.
At a glance

Typical terms

Typical terms
Advance rateUp to 90% of eligible invoices
Higher advance sectors95% to 100% in some sectors, such as recruitment and retail
Facility typesFactoring, confidential invoice discounting, selective or spot
StructureRevolving, linked to your debtor book
PricingPriced deal by deal, based on debtor quality and volumes

All figures are "up to" and subject to status and lender approval.

Our process

How GBF runs the process

We start with your aged debtor and creditor reports, recent accounts and management information. We then work out which structure fits - factoring, confidential invoice discounting, a selective facility or a wider asset based lending facility that also funds stock or plant. We prepare the credit case, approach suitable lenders, compare indicative terms side by side and manage due diligence and the audit through to drawdown. We are a broker and debt adviser, not a lender, so we can recommend the option that fits rather than a single product.

  • One senior adviser from first call to completion
  • A credit paper lenders take seriously
  • Indicative terms compared side by side
  • £0 upfront fee
Related facilities

Related facilities we arrange

Asset based lendingOne revolving facility across receivables, stock, plant and propertyTrade financeFund supplier payments before you invoiceBusiness loansTerm loans and revolving credit facilitiesGrowth Guarantee SchemeGovernment-backed facilities, including invoice financeInvoice finance guideA fuller explainer on costs and structures
FAQs

Invoice finance: common questions

How much can I raise with invoice finance?

Typically up to 90% of eligible invoices, and 95% to 100% in some sectors such as recruitment and retail. The final figure depends on your debtors, concentration and payment history.

What is the difference between factoring and invoice discounting?

With factoring the lender manages your sales ledger and collects from customers. With invoice discounting you keep control of collections, and confidential invoice discounting keeps the facility hidden from customers.

Will my customers know I am using invoice finance?

Not with confidential invoice discounting. With factoring and some selective facilities, customers are told to pay the lender directly.

Can I finance just one invoice or one customer?

Yes. Selective or spot invoice finance lets you fund individual invoices or customers rather than the whole ledger.

Is invoice finance the same as asset based lending?

Invoice finance funds receivables only. Asset based lending combines receivables with stock, plant and machinery and property in one facility, and suits larger businesses with more assets to borrow against.

Is GBF a lender?

No. Growth Business Finance is a commercial finance broker and debt adviser. Finance is subject to status and lender approval.

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