Compare invoice financing

Invoice financing could help you with your day-to-day business expenses.

  • Compare invoice financing options from leading providers
  • Weigh up your options
  • Money.co.uk’s easy-to-use, fast service is offered at no charge

Compare business invoice financing from leading brokers and lenders

Looking through a range of options gives you more chance of securing a great deal. You'll only find results from genuine companies. Our data experts check each company before we add them to our comparisons.

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How to compare invoice financing business loans

1

Prepare a business plan

Work out the amount of money you need to release from your invoices. While many factors can determine the cost (such as turnover, credit history, assets etc.) how much you are able to retain of the value of the invoice can mean cheaper invoice financing agreements in some cases.

2

Compare your options

Have a look through the options to find the best invoice financing option for your business needs. Check any conditions attached to the loan as criteria can vary significantly between providers. Once you have decided that invoice finance is right for your business you need to look for the cheapest invoice financing deal on the market.

3

Apply for invoice financing

While there are commercial finance options offered by banks etc. some lenders and brokers only ever operate digitally, so to make sure you find the best invoice financing deals comparing quotes on the internet is a must. Once you've found the provider that best suits the needs of your business, simply apply.

Invoice finance deals

7 results found, sorted by affiliated products first. How we order our comparisons. Commission earned affects the table's sort order.
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Funding Options Business Loans
Advance amount
£1,000 to £2,000,000 (up to 95% of the invoice value)
Term
1 month +
Funding Options Business Loans
Funding Options is a Credit Broker and not a Lender. Their APR starts from 2.75% and has an average of 7.38%. They can help you prepare and submit your Recovery Loan Scheme application through multiple RLS accredited Lenders.
Minimum Turnover is £60,000 with 12 months minimum trading. Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Ignite Funding Business Loan
Advance amount
£25,000 to £30,000,000 (up to 95% of the invoice value)
Term
1 month +
Ignite Funding Business Loan

What is invoice finance?

It’s a way to borrow money for your business, using the value of your unpaid invoices as collateral.

How does invoice finance work?

An invoice finance lender effectively buys an unpaid invoice from your business, paying you some of the money immediately and a share of the rest when the invoice is paid by your customer. The lender usually retains part of the invoice value. 

There are both advantages and disadvantages to securing invoice finance.

Pros

  • You can pay off the credit as your business earns

  • Businesses with poor credit may be considered

  • You don’t have to chase payments

Cons

  • Charges can be high

  • It may be harder to get other finance

  • Payments may be taken from your customers

How to get the right invoice finance

Start by choosing the type of invoice funding that best suits your business. You can select from:

  • Invoice discounting: the lender pays you the money on your invoice and you repay them once your invoice is paid to you by your customer

  • Invoice factoring: the lender buys your outstanding invoice from you, then collects payment from your customer using their own credit management team

  • Asset-based lending: a combination of invoice finance and asset finance. This releases funds on your unpaid invoices and business assets, such as property, stock or machinery

Some companies offer other specialist forms of invoice financing, including:

  • export financing – for businesses that export overseas

  • recruitment financing – for firms in the recruitment sector

  • construction financing – for companies in the construction sector

If your business trades in any of these areas, check whether these types of working-capital finance might better suit your needs.

Find out how invoice finance and other business finance agreements work here.

Compare the costs of invoice finance

Once you know which type of invoice finance is right for your business, look for the cheapest solution.

There are usually two main costs:

  • fees for setting up your invoice finance arrangement 

  • interest charges on each invoice you finance

Exactly how much your business must pay depends on many factors, including its turnover, credit record and the value of its assets.

You can use the comparison table to find invoice-funding companies and visit their websites to check potential charges.

Choose how much of the invoice to release

When you enter into an invoice finance agreement, the lender releases a set percentage of the invoice value to you straight away – usually up to 85-90% of its value.

The rest is released once the bill has been paid by your customer.

You can usually choose the immediate payment percentage, but it may cost more to release a higher amount, and the maximum percentage varies between lenders.

Invoice finance example

You have an outstanding invoice that totals £100,000.

You choose an invoice discount finance option that releases 90% of the invoice immediately and which charges a 2% fee.

£90,000 is paid to your business once your finance application is approved, and another £8,000 once your customer pays the invoice. A £2,000 fee is retained by the lender.

Invoice finance FAQs

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Last updated: 7 April, 2022