Boost Your Business Cash-flow and Accelerate Expansion
Unlock cash and get the funds you need to grow your business effortlessly. With this financing option, you can fulfill orders, issue invoices, and receive payment in as little as 48 hours. Keep your customer payment records private by managing them yourself, or let a lender handle the task of collecting overdue payments. Tap into the cash tied up in unpaid invoices or secure funds to purchase supplies for your next project. The flexibility this offers lets you stop worrying about cash collection and focus on scaling your operations.
What Is This Financing Option?
This solution is perfect for small to medium-sized businesses serving other companies (B2B). It speeds up cashflow by providing quick access to funds—sometimes within 24 hours—based on the value of your outstanding invoices. You can receive a significant portion of each invoice’s worth right after it’s issued, using those unpaid invoices as the foundation for short-term funding.
It’s designed for businesses with at least £25,000 in yearly revenue and payment terms of 14 days or longer. Depending on your products, services, and invoicing terms, lenders can advance up to 100% of an invoice’s value. This is especially helpful for companies with limited physical assets to use as loan security, as the invoices themselves serve that purpose—no extra collateral required.
How Does It Work?
Lenders use your unpaid invoices as security, giving you rapid access to a portion of their value—typically between 70% and 100%—within 48 hours of submission.
You maintain oversight of your customer payments and handle collections yourself. Payments from your clients go into a discreet account managed by the lender but styled to look like yours, keeping the process invisible to your customers. Once the invoice is settled, the lender deducts their fees and interest, then transfers the remaining amount to you.
You can apply this financing across all your invoices or pick specific ones to fund (known as selective financing). Think of it as a flexible credit line or a series of small, short-term loans—but without the need for asset-backed security or personal guarantees often required by traditional lenders.
What Are the Types?
This financing comes in two main flavors in the UK:
- Confidential Financing (Invoice Discounting) – You borrow against your unpaid invoices, manage your own payment collection, and keep the process private from your clients.
- Outsourced Financing (Invoice Factoring) – You sell your invoices to a lender who takes over collection duties. Your clients will know about this arrangement.
There’s also a hybrid option—selective financing—where you choose which invoices or clients to fund. Each type varies in how much you receive upfront and the associated costs.
A Quick Insight
“This financing leverages your unpaid invoices to secure funding fast. It’s ideal for businesses earning £25,000 or more annually with invoice terms of 14 days or longer.
It works like a revolving credit facility, but you stay in charge of collecting payments from your clients.”
*Paid once your client settles the invoice within terms. Note: This is an example—terms vary by lender.
Can Small Businesses Use It?
Yes, if your business earns £25,000+ annually and invoices B2B clients with terms of 14 days or more. Lenders look at:
- Annual revenue
- B2B transactions
- Invoice terms
- Client payment reliability
- Recent financial records
Why Choose This Option?
- Pros: No extra collateral needed, scales with your business, flexible eligibility, quick approval, and confidential if you choose. Factoring can also lighten your admin load.
- Speed: Funds in days, not weeks like bank loans.
What’s the Difference Between Factoring and Financing?
With financing, you borrow against invoices and collect payments yourself. Factoring means selling invoices to a lender who chases payments—less private, but less work for you. Both can release up to 100% of invoice value fast.
A Blockchain Twist
Some modern providers use blockchain—a secure, shared digital ledger—to handle this financing. It promises faster transactions and transparency, potentially cutting costs and boosting efficiency, especially for international businesses switching between currencies.
Watch Out for Fraud
Fraud can happen, like “phantom invoicing” (billing for uncompleted work) or fake invoices to grab cash. Both are illegal and risky for businesses and lenders alike.
Another Option: Supply Chain Financing
Unlike invoice financing, this helps you pay suppliers upfront. Say an order’s worth £80,000, but materials cost £40,000. A lender covers the £40,000, you deliver, and the client pays £80,000 later. The lender takes their cut, and you get the rest—keeping cash-flow smooth.
