Start by choosing the type of invoice funding that best suits your business. The two most common options are:

  1. 1.

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

  2. 2.

    Invoice factoring where the lender buys your outstanding invoice from you and then collects payment from your customers.

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

  • Export financing, for businesses that export overseas

  • Recruitment financing, for businesses that operate in the recruitment sector

  • Construction financing, for business in the construction sector

If your business trades in any of these areas or sectors, check if these types of working capital finance will better suit your needs.

Choose how much of the invoice you need to release

When you enter into an invoice finance agreement, the lender will release a set percentage of the invoice value to you upfront - usually up to 85-90% of its value.

The rest is then released to you once it has been paid by your customer.

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

Compare the costs

Once you know which type of invoice finance is right for your business you need to look for the cheapest solution on the market.

There are usually two main costs to your business:

  1. Fees for setting up your invoice finance arrangement with the lender

  2. Interest charges on each invoice you finance

Exactly how much your business will have to pay depends on lots of different factors, including your business turnover, credit record and the value of your business assets.

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

Invoice finance FAQs


Who is responsible for collecting the invoice payments?


This depends on the type of invoice finance you choose. With invoice discounting you collect the money, with factoring you pay the lender to do it.


Can I borrow if my business has bad credit?


Yes, some lenders will consider your application if you have had credit issues in the past, but it may be more expensive.


Will my customers know if I choose factoring financing?


Yes, in most cases your customers will know you are using a factoring company to collect the money owed to your business.


How long will I need to have been trading?


Most invoice factoring companies ask for at least 12 months of accounts when you apply, but some will accept less than this.


What is LIBOR?


The London Interbank Offered Rate (LIBOR) is the reference rate businesses use to borrow money from each other. Some fees are based on the LIBOR.

About our comparison


Who do we include in this comparison?


We include invoice finance available from lenders and through brokers on our panel. Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.