Invoice Finance

Last updated: 18 August 2026 - Written by James Dutton - James heads our Invoice Finance division with over 15 years of commercial finance experience, focusing on invoice finance for companies.

Invoice Finance for UK businesses 

Invoice finance is a form of working capital finance that allows businesses to access funds tied up in their unpaid invoices. Invoice finance provides immediate access to up to 90% of the invoice value, usually within 24 hours of setting up the invoice finance facility. It involves selling or assigning outstanding invoices to a finance provider, who then advances a percentage of the invoice value (usually up to 90%) to the business. The remaining balance is paid to the business once the customer pays the invoice, minus the finance provider's fee.

At MAF Finance Group, we provide a range of invoice finance solutions including invoice factoring, invoice discounting and selective invoice finance. We have a large panel of lenders and explore the entire market to find the right solution for you. Regardless of your invoice finance requirement we will deal with the whole process through from start to finish allowing you to continue day-to-day business operations.

Invoice finance offers a number of business benefits and can deliver clear  cashflow improvements day to day and support business growth through providing the funding needed to invest in new staff, materials, marketing or technology needed to grow your business. 

What is Invoice Finance?

Invoice finance is a financing option that allows you to unlock the value of a customer’s invoices that are owed to your business. Companies that have B2B consumers within the goods or services sector tend to use this type of funding.

Invoice finance is an general term that includes options such as invoice factoring and invoice discounting, allowing businesses to choose the right finance option for their businesses cashflow finance needs. This type of funding enable businesses to access the value of outstanding customer invoices before they are due and is commonly used by SME businesses looking to improve working capital and manage day-to-day cashflow.

Having to wait for anything from 30 to 90 days for a business to pay for your products or services can be a frustrating process for most business owners and have an adverse impact on cashflow. Rather than waiting for customers to pay you, our specialist funders can advance you up to 85%-90% up front against the invoice value.

Different invoice finance options

There are two main types of invoice finance:

Invoice Factoring – is where the funder takes control of your sales ledger and lends against your customer invoices. This means that your business will receive most of the invoice value (usually up to 90%, minus a lender fee) immediately, instead of the typical 30-90 days.

Invoice Discounting - is a type of finance product where businesses sell their unpaid invoices to a third-party company to receive immediate cash, rather than waiting for their customers to pay. This improves cash flow and allows businesses to fund their operations or invest in growth. The discounter advances a percentage of the invoice value, typically 70-90%, and the business retains responsibility for collecting the payment from their customer.

Who would use invoice finance?

Any UK business that sells to other businesses on credit are eligible for invoice finance. Whether you are a limited company, PLC or a partnership, we can help all businesses. 

The businesses we can help span across many different industries including:

• Manufacturing
• Construction
• Agriculture
• Transport
• Retail
• Technology
• And many more

How much can I borrow with invoice finance?

 Invoice finance funding scales with your sales ledger, unlike a fixed business loan the amount funding levels grow as your invoicing increases, rather than being capped at a set amount agreed up front.

Funders on our panel will typically advance between 70% and 90% of the value of an invoice, with the remaining balance paid once your customer settles, minus the funder's fee. The exact advance rate and facility size will depend on a number of factors, including:

• Your sector and the type of goods or services you invoice for
• The creditworthiness of your customers
• How concentrated your invoices are across a small number of customers
• The overall size and quality of your sales ledger

We work with a broad panel of funders, so we can source facilities to suit businesses of most sizes, from smaller selective facilities right through to larger, whole-ledger arrangements.

How does Invoice finance work?

1. Invoice finance works by a business sending clients or customers an invoice for the service/goods provided. Once that is done, the invoice finance provider will send the agreed percentage of the overall payment to the business within 48 hours.
2. As agreed with the finance provider, the business can choose to either take responsibility and chase payments due or the finance provider will do it – this is the main difference between invoice factoring and invoice discounting.
3. Once the client has paid the invoice, the total remainder of the invoice is paid to the business, minus any agreed service fees agreed with the funder.
4. Depending on the company turnover, a minimal service charge and discount charge of typically between 0.75% and 2.5% is added by the finance provider, which covers the lender’s management, collections and administration costs. The interest paid to the finance lenders by the business is based on the amount borrowed.

Do I qualify for invoice finance?

Invoice finance is assessed differently to most other forms of business lending. Rather than focusing solely on your business's own credit history, funders look at the quality and reliability of your outstanding invoices, and the creditworthiness of the customers who owe you money.

You could apply for invoice finance if you meet the following criteria:

• Business trades with other businesses (B2B) on credit terms
• Invoices are raised for completed work or delivered goods
• Limited company, LLP, PLC, partnership or sole trader
• Business is based in the UK
• Customers have a reasonable track record of paying on time

Because eligibility is largely based on your sales ledger and your customers' payment history, invoice finance can be accessible to businesses that might not qualify for a traditional loan, including newer businesses or those with a limited trading history.

Benefits of invoice finance

Some of the benefits of using invoice finance are:

• Faster access to cash tied up in unpaid invoices
• No property or physical assets required as security
• Funding grows in line with your sales, rather than being fixed
• Assessed primarily on your customers' creditworthiness, not just your own
• Can suit businesses with a limited trading history
• Choice of confidential (discounting) or fully managed (factoring) arrangements
• Frees up time by outsourcing credit control (with factoring)
• Can be used across the whole ledger or selectively for specific invoices

Invoice factoring vs invoice discounting

The difference between invoice factoring and invoice discounting is that invoice discounting is the more private facility available and invoice factoring is a more hands-on, visible facility for the lender.

If the facility needs to remain confidential from the business’s client, then invoice discounting is the right product as it means that the business maintains control of their sales ledger and is responsible for chasing payment.

However, if the business is happy to pass this control and responsibility onto the invoice finance provider, then factoring could be a better solution. This will mean that the provider is responsible for chasing payments, thus notifying the business’s client that an invoice finance facility is in place.

Advantages of invoice finance

One of the many advantages with invoice financing is the increased availability of cash flow.

A benefit to the business is that once an invoice is issued, rather than waiting days, sometimes months to be paid by a customer, a business has the advantage to release up to 95% of the value of an invoice within 24-48 hours.

Invoice financing can be either used for certain areas of the business or for the entire business, and especially useful for securing larger invoices.

Alternative solutions to invoice finance

Asset-based lending: A broader funding solution that can combine invoice finance with borrowing against other assets such as stock, plant or machinery.

Working capital loan: A short-term finance solution for businesses requiring funding to cover day-to-day operations and provide sufficient cash flow.

Stocking finance: A facility designed to help businesses fund the purchase of stock, particularly useful for businesses with seasonal demand.

Unsecured business loan: A lump sum loan based on creditworthiness, suited to businesses that would rather borrow a fixed amount than fund against their sales ledger.

Why use a finance broker for invoice finance?

Navigating the invoice finance market can be complex, with a wide range of funders offering different advance rates, fee structures and approaches to factoring versus discounting. That's where a finance broker can be of significant value.

When you apply for invoice finance through MAF Finance Group, we compare offerings from a wide panel of funders to identify the facility best suited to your sector, sales ledger and preference for confidentiality, allowing you to continue with your day-to-day operations while we manage the process.

How to apply for an invoice finance facility

If you would like to get a quote or need further information, simply fill in the form and we will contact you. If you want to speak to someone directly, you can call us on 0115 958 6872 and a member of our team will be happy to speak to you. Alternatively, email us at [email protected]. We can compare finance offerings from a wide panel of lenders to find the best option for you.

Step 1 - You contact us and we gather your information. We'll typically ask for your latest accounts, an existing debtor report showing your outstanding invoices, and details of your customer base. Requirements depend on your business and the type of facility you need.

Step 2 - We approach our lender panel on your behalf. We submit your application to funders best suited to your sector and sales ledger. Most funders come back with a decision quickly, with Know Your Customer (KYC) and identity checks carried from this point.

Step 3 - You receive an offer and set up your facility. Once you're happy with the terms, you'll sign the facility agreement. Selective facilities can be set up within a few days, while whole-ledger facilities may take slightly longer to onboard fully.