◷ STEP-BY-STEP OVERVIEW
How invoice finance works in practice
Understand the operational lifecycle, from raising a commercial invoice to receiving your advance, plus a clear breakdown of charges.
THE DAILY OPERATIONAL CYCLE
From invoice generation to final settlement
STEP 01
Deliver & Invoice
Supply the agreed goods or complete the eligible work, raise your business invoice and submit the details required by the provider.
- Standard invoice format
STEP 02
Cash advance
The provider checks invoice eligibility and releases the agreed advance. Advance rates and payment timing depend on the facility and completed checks.
- Cleared within 24 hours
STEP 03
Customer Settlement
Your customer pays under the agreed credit terms. Payments follow the collection and account arrangements specified in your facility agreement.
- Standard 30–90 credit term
STEP 04
Balance Paid
After customer payment clears, the balance is released after the advance and agreed charges have been accounted for.
- Balance released immediately
INTERACTIVE ESTIMATOR
Estimate your invoice advance and net release
Adjust the sliders to explore an illustrative funding breakdown.
£10,000£250,000
70%90%
30 days90 days
CALCULATED BREAKDOWN
Estimated initial advance£42,500
Est. service charge (0.75%)£375
Est. discount charge (45d)£367
Remaining balance on settlement£6,758
Request an indicative quote →
Estimate assumptions
Illustrative estimate, not a funding offer. Assumes a 0.75% service charge on invoice value and a 7% annual discount rate on the advance, calculated daily over 365 days. Charges are deducted at settlement in this example. Actual rates, additional fees, eligibility and payment timings depend on the provider and facility.
— BE PREPARED
What you’ll need
Prepare the records that explain how your business trades and who owes you money. Exact requirements vary between providers and facilities.
The usual checklist
✓ Up-to-date aged debtor report
✓ Sample invoice and terms of sale
✓ Recent business bank statements
✓ Basic management figures
✓ Identification for relevant directors
✓ Details of existing borrowing or security
✓ Sample invoice and terms of sale
✓ Recent business bank statements
✓ Basic management figures
✓ Identification for relevant directors
✓ Details of existing borrowing or security
— SIDE BY SIDE
Factoring vs discounting
The funding mechanics are similar. The main difference is who manages collections and what customers see.
| Feature | Invoice factoring | Invoice discounting |
|---|---|---|
| Who manages collections? | Usually the provider’s credit control team | Usually your business |
| Customer visibility | Customers generally know about the provider | Confidential facilities may be available |
| Credit control support | Typically included | Usually stays with your business |
| What to consider | Collections service and customer communication | Your own credit control and reporting capacity |
| Costs | Compare service charges, funding charges and minimum fees | Compare funding charges, service fees and contractual commitments |
QUALIFICATION GUIDELINES
Who qualifies for invoice finance?
Providers consider your business, the quality of your invoices and your customers’ ability to pay. Eligibility requirements and any security arrangements vary between facilities.
UK business
Your business structure and trading history must meet the provider’s criteria.
Business-to-business sales
Invoices raised to business or public-sector customers on agreed credit terms.
Turnover and customer quality
Minimum turnover requirements vary. Providers assess your sales ledger and customers.
Completed goods or services
Evidence of delivery, approved timesheets or agreed milestones may be required.
READY WHEN YOU ARE
Let’s find a way forward for your cash flow.
Tell us a little about your business and what you need from invoice finance. We’ll help you explore the next step.