Invoice finance
for UK SMEs
Waiting 30, 60, or even 90 days for customers to pay is a burden most small businesses can't afford. Invoice finance turns your unpaid invoices into immediate working capital.
At SMEmoney.co.uk
We find the right invoice finance solution for your business
We are not a lender or a broker. We simply refer your details to specialist brokers, based on your requirements, who have access to over 70 UK lenders.
Whether you have one large invoice or a whole sales ledger, we help you find the right partner to release that cash.
Why use invoice finance?
Why use invoice finance in 2026?
The primary reason businesses use invoice finance is certainty. It removes the payment gap that often stalls growth - or worse. Big businesses can take an age to pay and that really hits cash reserves.
Since invoice funding is secured against the value of your invoices, it is more accessible than a traditional bank loan with a much higher acceptance rate.
Invoice finance allows you to:
- Bridge the Gap: Pay staff and suppliers on time, regardless of when your customers pay you.
- Take on Bigger Contracts: Confidently bid for larger projects knowing you have the cash flow to fulfil them.
- Remove Collection Stress: Some options include professional credit control, so you can focus on running your business.
- Scale with Sales: As your turnover grows, the amount of funding available to you grows automatically.
Choosing the right invoice solution
Not every business wants the same level of support
Your choice depends on whether you want to manage your own collections or keep the facility confidential. There are two general types - Invoice Factoring and Invoice Discounting. With factoring you do less work but it costs a bit more. With discounting you manage the collections yourself.
| Feature | Invoice Factoring | Invoice Discounting | Selective Invoice Finance |
|---|---|---|---|
| Credit Control | The lender manages your collections. | You maintain control of your credit control. | You choose which specific invoices to fund. |
| Confidentiality | Your customers will know a lender is involved. | Usually confidential; customers don't know. | Can be confidential or disclosed. |
| Used for | Smaller SMEs without a dedicated accounts team. | Established businesses with internal finance teams. | Businesses with occasional large, one-off invoices. |
| Cost Structure | Service fee plus interest on the funds used. | Typically lower service fees; you manage the chasing. | A single fee per invoice funded. |
A closer look at your options
Invoice factoring
Factoring is a complete package for businesses that want to save time. The lender provides up to 90% of the invoice value immediately and handles the collections process for you. It is a popular choice for growing businesses that do not have the resources to chase late payers.
A closer look at your options
Invoice discounting
If you have an established finance team and want to keep the facility private, invoice discounting is the better fit. You keep control of your sales ledger and collect payments as usual. The lender provides the cash behind the scenes. This is ideal for larger SMEs with strong internal processes.
A closer look at your options
Selective invoice finance
You may not need to fund your entire ledger. Selective or spot factoring allows you to pick and choose specific invoices to fund. This is a flexible, no-commitment way to manage cash flow during particularly busy months or when dealing with a single large client.
The SMEMoney process
Getting your invoices funded should be as fast as the work you do.
Calculate Your Costs
Use our free tools to estimate how much cash you could release today.
From the SMEmoney family
Need help growing the business behind the funding?
The Fractions is our sister digital marketing and web development agency, working with founder-led SMEs turning over roughly £1m-£15m on paid advertising, customer journey optimisation, and technical growth strategies - with a particular focus on automotive and financial services.
FAQs
Frequently asked questions
No. We simply refer your details to a suitable broker from our panel, based on your requirements, who then searches the market to find the best invoice finance deal for you.
Most lenders will advance between 70% and 90% of the invoice value immediately. The remaining balance is paid to you, minus fees, once the customer pays.
Not necessarily. Lenders look primarily at the creditworthiness of your customers. This makes it a great option for startups or businesses in recovery.
With Factoring, yes. With Invoice Discounting, it is usually completely confidential.
Yes. Many of the 70+ lenders our brokers work with specialise in export and international trade finance.
Some lenders require a minimum annual turnover of £100,000, but our brokers have access to specialist providers for smaller startups too.
A full ledger facility can take one to two weeks to set up. Selective invoice finance can often be arranged much faster.
Only if you choose a whole-ledger facility. If you want more control, Selective Invoice Finance allows you to fund only the invoices you choose.
You can opt for Bad Debt Protection (Non-Recourse Finance). This protects your business if a customer becomes insolvent or fails to pay.
You typically pay a service fee (for the administration) and a discount rate (interest on the money you draw down). Your broker will explain these clearly before you sign.
There can be restrictions if you are heavily reliant on a few key accounts. Typically, this would be a restriction on lending or a lower percentage of the invoice being funded. You can also have your percentages changed if clients regularly go out of scope for the terms you have agreed with them.
Often, yes. This is because the lender is relying on the strength of the debtor's business and their ability to pay, rather than just yours.