Invoice Factoring

Release cash tied up in unpaid invoices

Invoice factoring allows you to access a percentage of your invoice value immediately, rather than waiting 30, 60, or 90 days for your customers to pay. It is one of the most widely used forms of working capital finance for UK businesses.

With factoring, the lender typically advances 80–90% of eligible invoice value within 24 hours of invoice submission. The remaining balance, less fees, is released once your customer settles the invoice.

Unlike invoice discounting, factoring is a disclosed arrangement — your customers will be aware that a third-party provider is managing collections. This suits businesses that prefer to outsource credit control.

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Same-day or next-day funding

Access up to 90% of your invoice value within 24 hours of raising the invoice.

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Outsourced credit control

The lender manages collections and chases payment on your behalf, freeing up your team.

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Grows with your turnover

Your facility scales as your sales ledger grows — no need to renegotiate as your business expands.

How it works

The factoring process

1

You raise an invoice

Invoice your customer as normal and submit it to your factoring provider.

2

Funding is released

The provider advances up to 90% of the invoice value, typically within 24 hours.

3

Collections managed

The factoring provider chases payment from your customer on agreed terms.

4

Balance released

Once your customer pays, the remaining balance — less fees — is transferred to you.

Indicative costs

What does invoice factoring cost?

Service fee

0.5–3%

of annual turnover

Discount rate

1–4% p.a.

over base rate

Indicative figures based on the competitive end of the market. Actual pricing depends on turnover, debtor book quality, sector and facility structure. Use our funding insight tool to see figures specific to your profile.

Common questions

Invoice factoring FAQs

Yes. Invoice factoring is a disclosed arrangement. Your customers will be asked to make payments to the factoring provider rather than to you directly. If confidentiality is important, invoice discounting may be a better option, as it operates without your customers being made aware.

With recourse factoring, if a customer fails to pay you remain liable for the debt. Non-recourse factoring transfers the risk of bad debt to the provider. Non-recourse facilities typically carry higher fees to reflect this additional protection.

Requirements vary by lender. Some specialist providers will consider businesses from around £100,000 annual turnover; bank-led facilities typically require significantly more. The most important factors are debtor book quality, the nature of your customer base, and time in business.

Timescales vary by lender and complexity. Specialist providers often move significantly faster than bank-led structures. Most businesses can have a facility in place within two to four weeks from formal application, assuming documentation is available promptly.