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Within business, invoice finance has historically had a stigma associated with it as the ‘lender of last resort’ and that was largely true before the recession as the debtor book was usually the last remain asset to use as security for a business to borrow. Today though that perception has changed dramatically and the service offering of invoice finance has improved significantly. Today, invoice finance is an extremely valuable cash flow tool which can drastically shorten the time it takes to get paid which in turn means you can utilise the money within your business quicker.

So, who can use invoice finance? If you are a business that has business to business transactions and you offer credit terms to your clients, then it is highly likely that you can take advantage of invoice finance.

There are three main types of invoice finance and these are:


This is also known as a disclosed facility. Factoring will allow you to draw against the invoice, it will also include bad debt protection and the invoice finance provider will be responsible for collecting the balance from the client.

Invoice Discounting

This is also known as a non-disclosed facility. Invoice discounting ill also allow you to draw against the invoice, however you will be responsible for the credit collection of the invoice. Also, the need for bad debt protection is removed, unless stipulated by the lender at the time of application.

Spot Factoring

This has many different names and looks slightly different with each lender however the basic principles are the same. With the previous two options, typically, you will need to fund all of your debtors through the facility. With spot factoring, you can elect to only fund a particular debtor. This is particularly useful if you have one larger client and need the funds quickly and the rest of your clients are generally smaller or if the client related to one item of work and you need the funds to help provide the working capital to service the client.

Whichever option you think may suit you, get in touch and we’d be delighted to talk through the options with you in more detail… helping you to establish which cash flow solution can have the greatest impact for your business.

Rates and Fees


Invoice finance has a couple of different costs associated with it.

Discounting fee – This an interest rate charged on the amount of fund you use and is calculated on a daily basis, in exactly the same way as a traditional over draft. Rates are quoted as XX% + Base Rate. These rates can start from as little as 1%.

Service fee – This is a charged levied on all invoices which are processed through the facility and is payable regardless of you drawing against the facility or not. This can start from as little as 0.25% per annum and is driven by the amount of turnover. This fee covers the cost of the software and processing the invoices so that they are available to draw against.


This varies greatly between providers. We’ll guide you through all the associated fees so you can make an informed decision on your provider.

Lender arrangement fee

On occasion, there can be a lender fee however this market place is very competitive and this can be negotiated. Often, lenders will pay early exit fees if you are already using a provider to bring you on to their offering sooner

Broker fees

There are no broker fees associated with this type of transaction as we are remunerated by the lender. We will always disclose our reward from the lender.

How to Apply

As a whole of market broker, we understand how best to present your proposal to the lender and which lender would be most favourable for your circumstances.

Fact Find

We will always engage with you to fully understand you lending requirements. This will often involve understanding your wider business and commitments. Once we have an understanding of the proposal we will give you a steer on the likely appetite for your application.

What information do you need to provide?

As with all lending application we need to gather information to present to the lender. Here’s a general list of the information that will be required;

  1. Proof of identity, address (this can be done quickly and effectively via our mobile onboarding app)
  2. Financial accounts (if available)
  3. An understanding of your trade cycle
  4. Aged debtor list (if available)
  5. Cash flows (if available)
  6. Understanding of business plans
  7. Assets and Liabilities details

We will also identify any other relevant information required when we discuss your requirements at the fact find stage.

What next?

Call us on 02921 303 888 to speak with one of our team. Not convenient now? Complete our contact form and we’ll get back to you when it is.