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Invoice finance
Release cash tied up in invoices your business customers haven’t paid yet, with the true monthly cost shown on your own sales ledger.
How invoice finance works
When you invoice another business, a provider advances most of the invoice value, often 70% to 90%, within a day or two. When your customer pays, you receive the rest minus the provider’s charges. The facility grows with your sales.
With factoring the provider runs your sales ledger and chases payment, so customers know. With invoice discounting you keep collecting yourself and the arrangement is usually confidential. Selective invoice finance funds individual invoices you choose.
What invoice finance costs
There are usually two charges: a discount charge, like interest, on the money advanced, and a service fee, often a percentage of turnover. Some providers add minimum monthly fees, set-up or audit charges and bad-debt protection.
The invoice finance calculator turns those charges into a monthly cost and a yearly rate on the cash you actually use.
Who can use invoice finance
It suits businesses selling on credit terms to other businesses. Common published conditions:
- Invoices to business customers, not consumers.
- A minimum annual turnover or ledger size.
- Limits on how much one customer can represent.
- A clean aged debtor report and clear credit terms.
Verified providers
We’re verifying the first providers for this route
Products appear here only once we have checked them against the provider’s own published information. Meanwhile, the calculator shows what this kind of finance could cost.
Invoice finance cost calculatorQuestions, answered
What is the difference between factoring and invoice discounting?
Factoring includes credit control: the provider collects payment from your customers, so they know you use finance. Invoice discounting leaves collection with you and is usually confidential, but providers expect stronger in-house credit control and a larger turnover.
How much can I borrow against my invoices?
Typically 70% to 90% of each approved invoice, depending on your customers, your sector and the provider. The rest, minus charges, is paid when your customer settles.
Does invoice finance mean my customers will know?
With factoring, yes, because the provider collects payment. Confidential invoice discounting keeps the arrangement between you and the provider.
Is invoice finance a loan?
Not in the usual sense. You are being advanced money against invoices you have already earned, so the amount available follows your sales rather than a fixed limit.