Invoice Finance Broker UK

Your invoices are worth money. Most businesses wait 60 days to find that out. Discover the best invoice finance facility now.

I’m Mark Smillie. I’ve been arranging invoice finance and invoice factoring for UK businesses for over 30 years, and it’s the product I wish more business owners understood before they went looking for a business loan.

Here’s the thing most finance brokers don’t say clearly enough. If your business raises invoices and waits for customers to pay them, you’ve already earned the money. It’s sitting in your debtors ledger right now. Invoice finance lets you access it today rather than in 30, 60 or 90 days when your customer gets around to settling.

No lengthy loan application. No business plan. No personal guarantee in most cases. Just the cash you’ve already earned, available when you need it.

“Our invoice financing deal is now ten times better than it was before, thanks to Mark Smillie.” William Fulcher, FMS Global Media

What is invoice finance?

Invoice finance is a funding facility that lets UK businesses unlock the cash tied up in their unpaid sales invoices. Rather than waiting for customers to pay on their terms, you draw against the value of those invoices as soon as you raise them.

It works like this. You deliver goods or services and raise an invoice. Instead of waiting 30, 60 or 90 days for payment, you pass that invoice to a finance company who advances you a percentage of its value, typically up to 90%, usually within 24 hours. When your customer pays the invoice, the finance company takes its fee and releases the remaining balance to you.

The result is a consistent cash flow that moves in line with your sales rather than lagging weeks behind them. The faster you grow and the more invoices you raise, the more working capital you have available. It’s one of the few finance facilities that actually scales with your business rather than creating a ceiling.

Invoice finance vs invoice factoring vs invoice discounting: what’s the difference?

These three terms get used interchangeably and they shouldn’t. They’re related but they’re not the same thing, and picking the wrong one can cause real problems. Here’s a plain English explanation.

Invoice finance is the umbrella term covering all facilities that use your invoices as security for funding. Factoring and discounting are both types of invoice finance.

Invoice factoring is where the finance company buys your invoices and takes over the job of collecting payment from your customers. Your customers are notified that the invoices have been sold and they pay the finance company directly. The finance company handles your credit control. This is known as disclosed factoring because your customers know about the arrangement.

Invoice discounting is where you retain control of your own credit control and your customers continue paying you directly as normal. The finance company provides the funding against your invoices but operates in the background. Your customers have no idea the arrangement exists. This is confidential invoice discounting and it’s what most established businesses prefer because it keeps the client relationship exactly as it was.

Selective invoice finance, sometimes called spot factoring, lets you choose which individual invoices to fund rather than committing your entire sales ledger. You pick a specific invoice, get the advance, and repay when the customer pays. No whole-ledger commitment, no minimum volumes, no long-term contract.

Most of the businesses I work with start by asking for invoice factoring because it’s the term they’ve heard. What they usually end up with depends on their turnover, their customer relationships, whether they want to manage their own credit control, and whether they want to commit their whole ledger or just selected invoices. Getting that right from the start matters, and it’s exactly what I do.

How does invoice finance work in practice?

Let me walk you through a typical example.

You run a manufacturing business. You complete an order, deliver the goods, and raise a £50,000 invoice with 60-day payment terms. You need to pay your suppliers and your wages this month.

Without invoice finance: you wait. 60 days later, if your customer pays on time, the money lands.

With invoice finance: you pass the invoice to the finance company. Within 24 hours, they advance you £45,000, which is 90% of the invoice value. You pay your suppliers and your wages. 60 days later, your customer pays the £50,000. The finance company takes their fee, let’s say £750, and releases the remaining £4,250 to you.

Your net cost is £750 to access £45,000 for 60 days. Your business keeps running. Your suppliers get paid on time. Your customer sees nothing different.

That’s how invoice finance works at its simplest. The more invoices you raise, the bigger your available facility, automatically, without going back to ask for more.

Types of invoice finance I arrange for UK businesses

Selective invoice finance (spot factoring)
You choose which invoices to fund, one at a time if you want. No whole-ledger commitment, no minimum volumes, no contractual tie-in, no personal guarantee. Ideal for businesses with a small number of high-value invoices or clients with long payment terms. Fast, flexible and completely confidential. Your customers see nothing different.

Confidential invoice discounting
You retain full control of your credit control and customer relationships. The finance company provides the funding in the background and your customers pay you directly as normal. Available as a whole-ledger facility or on a selective basis. Preferred by most established businesses who want the cash flow benefit without their customers knowing about the arrangement.

Invoice factoring
The finance company purchases your invoices and manages credit control on your behalf. Your customers are notified and pay the finance company directly. Useful if you want to remove the administrative burden of chasing payments as well as solving the cash flow gap. Particularly effective for businesses with a large number of smaller invoices where managing credit control in-house is a significant overhead.

Secured invoice finance (loans against book debts)
Rather than drawing against individual invoices, this facility provides a lump sum loan secured against your overall debtor book. Fixed rate, interest only, with capital repayments whenever it suits you or a rollover at the end of the term. No personal guarantee required. Facilities from £50,000 to £5 million with a five-day turnaround.

Construction invoice finance and uncertified applications for payment
Most invoice finance companies won’t touch uncertified applications for payment. I know the specialist lenders who will. If you’re a contractor waiting on main contractors, councils or developers to certify work you’ve already completed, I can arrange funding against that uncertified debt. This is niche, genuinely useful, and almost nobody offers it properly. Read more on my construction finance page.

Recruitment invoice finance and payroll funding
Recruitment agencies have a specific version of the invoice finance problem: weekly payroll going out, client invoices not settling for 30 to 60 days. I arrange invoice finance and payroll funding facilities specifically structured around the recruitment cycle, including back office support if that’s needed. Read more on my recruitment finance page.

How much does invoice finance cost?

I’ll give you a straight answer rather than directing you to a calculator.

Invoice finance charges are made up of two elements. A service charge, which covers the administration of the facility, and a discount charge, which is the interest on the funds advanced. These are quoted separately and combined they give you the total cost of the facility.

The service charge is typically between 0.2% and 3% of your annual turnover. The discount charge is typically between 1% and 3% over base rate, charged on the daily balance outstanding.

In practical terms: on a £10,000 invoice at a combined rate of 1.5%, your total cost is around £150. You receive £9,000 today, and when your customer pays, the finance company takes the £150 fee and releases the remaining £850.

What pushes the rate up: high-risk sectors, slow-paying customers, low invoice volumes, a thin or patchy credit history.

What brings the rate down: strong, creditworthy customers, consistent invoice volumes, a clean ledger, established trading history.

The other costs to know about are what some providers bury in the small print. Minimum monthly fees. Audit fees. Legal fees. Early termination charges. Concentration limits that penalise you if too much of your ledger sits with one customer. I’ll go through all of this with you before you sign anything, because the headline rate is never the full picture and choosing the wrong provider on rate alone is one of the most common mistakes I see.

Invoice finance for small businesses

You don’t need to be a large business to use invoice finance. Some of the facilities I arrange are for businesses invoicing as little as £100,000 a year.

Selective invoice finance in particular is well-suited to small businesses because there’s no whole-ledger commitment. You use it when you need it, on the specific invoices where the cash flow gap is hurting you, and you pay nothing in the months when you don’t need it.

For small businesses the main questions are usually about minimum turnover requirements and whether the facility is cost-effective relative to invoice sizes. I’ll give you an honest answer on both once I know your situation.

Invoice finance for businesses with bad credit

Invoice finance is asset-based, not credit-based. That’s an important distinction.

When a traditional lender looks at a loan application, they focus heavily on your credit score and your trading history. When an invoice finance company looks at your application, they focus primarily on the quality of your invoices and the creditworthiness of your customers. If your customers are solid, established businesses who pay their invoices, the finance company cares a lot more about them than about marks on your credit file.

I regularly arrange invoice finance for UK businesses with County Court Judgments, previous company failures, adverse credit history, and finance applications that have been turned down by banks and other lenders. If you’re owed money and it’s collectable, there’s a very good chance I can help you access it regardless of your own credit position.

For the most challenging credit situations I have access to specialist lenders who will consider businesses with severe adverse credit where the invoice book is strong. Five-day turnarounds, £50,000 to £5 million, and no personal guarantee required.

Invoice finance with no personal guarantee

One of the biggest advantages of invoice finance over traditional business loans is that in most cases no personal guarantee is required. The security is the invoices themselves, not you personally.

This is a significant point for company directors who’ve already signed personal guarantees on other facilities and don’t want to stack up more personal liability. It’s also important for business owners who’ve been told they need to put their home on the line to access finance, because with invoice finance that’s usually not the case.

I’ll always look for the facility that keeps your personal assets out of the equation. If a personal guarantee is genuinely unavoidable in your specific situation, I’ll tell you that upfront and explain why, rather than just asking you to sign one because it’s the easier route for the lender.

The problem with choosing the wrong invoice finance company

There are over 90 invoice finance companies operating in the UK right now. Most business owners who go direct, or who use a broker who doesn’t specialise in this area, end up with whichever lender they’ve heard of or whichever one came up first online. That’s how people end up with the wrong facility for their business and spend years paying for it.

Every week I speak to business owners who are trapped in a factoring or invoice discounting arrangement that was wrong for them from the start. The complaints are almost always the same.

Hidden charges that weren’t disclosed at the outset. A verification process that contacted their customers and damaged relationships they’d built over years. Staff turnover so high they never spoke to the same person twice. A facility that was completely inflexible when the business needed it to adapt. Locked into a long-term contract with punishing early exit penalties.

These aren’t isolated incidents. They’re the predictable result of choosing a provider based on brand name and headline rate rather than fit.

The finance company that’s right for a recruitment agency placing temporary workers is not the same one that’s right for a manufacturing business with 10 major clients on 90-day terms. The one that works for a small service business with selective invoice needs is not the right one for a construction company with uncertified applications. Provider fit matters as much as the rate, and it matters more than the brand.

I’ve seen every version of the wrong provider problem. I won’t put you in front of one.

Who is invoice finance suitable for?

Invoice finance works well for any UK business that raises invoices for goods or services and waits for customers to pay them. It’s particularly effective for:

Businesses with customers on 30, 60 or 90 day payment terms. Businesses growing quickly where the cash flow gap is widening faster than revenue is landing. Construction companies with retentions or uncertified applications for payment. Recruitment agencies funding weekly payroll against monthly client invoices. Manufacturing businesses with large individual orders and long customer payment cycles. Any business where late-paying customers are creating a consistent cash flow problem.

It’s less suitable for businesses that take payment at point of sale, businesses with very low invoice volumes, or businesses whose customers are consumers rather than other businesses. If you’re not sure whether your business qualifies, call me and I’ll tell you straight.

Invoice finance vs a business loan: which is right for you?

Both solve cash flow problems but in different ways and for different situations.

A business loan gives you a lump sum upfront that you repay over a fixed term with fixed monthly payments. It’s the right choice if you need capital for a specific purpose, buying equipment, funding expansion, covering a one-off large cost, and you know what you need and when.

Invoice finance gives you a revolving facility that grows and shrinks with your sales ledger. It’s the right choice if your cash flow problem is structural, caused by the gap between raising invoices and receiving payment, and you want a facility that automatically provides more working capital the more you sell.

For many businesses the right answer is both, a loan for the capital investment and invoice finance for the ongoing working capital gap. I’ll tell you which combination makes sense for your specific situation rather than pushing you toward whichever product is easier to arrange.

Frequently asked questions about invoice finance

Will my customers know I’m using invoice finance?
With confidential invoice discounting, no. Your customers pay you directly as normal and see nothing different. With disclosed factoring, yes, they’re notified that invoices have been assigned. Most established businesses opt for the confidential route.

Can I use invoice finance if I only have a few large customers?
Yes, but some lenders apply concentration limits, meaning they limit how much of your ledger can sit with a single customer. I’ll identify lenders who are comfortable with your customer spread before we submit anything.

What’s the minimum turnover for invoice finance?
It varies by lender and facility type. Selective invoice finance has no minimum in most cases. Whole-ledger facilities typically start from around £100,000 annual turnover. If you’re below that, tell me and I’ll find the right route for your size.

How quickly can I get funds once the facility is set up?
Once a facility is established, funds against new invoices are typically available within 24 hours of submission. Setting up the facility initially takes five to ten days from first conversation.

Can I switch from my current invoice finance provider?
Yes. Switching is more common than people think and I help businesses move from a bad provider to a better one regularly. The process is straightforward once I know the terms of your current arrangement.

What happens if my customer doesn’t pay?
It depends on whether your facility includes bad debt protection. With non-recourse factoring, the finance company absorbs the loss if a customer fails to pay. With recourse factoring, the risk stays with you. I’ll make sure you know which you’re signing up for before you commit.

Does invoice finance affect my relationship with my customers?
With confidential invoice discounting, not at all. With disclosed factoring, there’s a notification process, and some business owners worry about how this lands with customers. In practice, invoice finance is widely used across UK businesses and most customers are entirely unbothered by it. The ones who aren’t are usually the ones taking liberties with your payment terms anyway.

Can I use invoice finance alongside other facilities?
Yes. Invoice finance works alongside existing bank overdrafts, term loans, asset finance and other facilities. It doesn’t replace them, it complements them.

Ready to release the cash sitting in your invoices?

One call. Tell me what you’re owed, who your customers are, and how long you’ve been waiting. I’ll tell you what facility makes sense, which provider is right for your business, and what the real cost looks like.

No credit checks at this stage. No commitments. No cost to you at any point. I’m paid by the lender when a deal completes.

Or call me directly: 07710 466166