Invoice & debtor finance · factoring
Hand over the receivables, get the cash, focus on the business.
The financier buys your invoices, advances most of the value immediately, collects from your customers directly. Visible to your customers but takes credit control off your plate. Often suits growing businesses where collections are eating into productive time.
What it is, when it fits
Plain English, with the trade-offs.
Factoring is debtor finance where the financier purchases your invoices outright, advances 80% to 90% of the face value within 24 hours, then collects directly from your customers on the agreed payment terms. When your customer pays, the financier balances the remaining 10% to 20% to you, less their service fee. Critically, factoring is visible: your customers know the financier is involved, remit payment to the financier directly, and may receive collection follow-up from the financier rather than from you. That visibility is the difference between factoring and confidential invoice discounting. For some businesses, visibility is a feature: handing collection to a specialist financier frees up internal capacity, accelerates collection cycles, and adds a layer of credit assessment on new customers. For others, particularly relationship-led B2B services, the visibility is unwelcome and discounting is the better fit. Pricing reflects the financier carrying both funding and collection cost: typical service fee 1.5% to 4% per invoice plus interest on the advance.
Pen on a settlement document, two people deciding together.
Typical scenarios
Rapid-growth manufacturer outpacing internal credit team
Why: Trading scaling 50% YoY; collection eating ~20 hours a week of CFO time.
Outcome: Whole-ledger factoring, $1.5M facility, freed CFO capacity, accelerated collection cycle.
Transport company with hundreds of small invoices
Why: High invoice count, long head-contractor terms, thin internal admin.
Outcome: Factoring outsources collection volume; advance rate aligned to receipt cycle.
Construction subbie consolidating debtor risk
Why: Multiple head contractors with varying credit; subbie wants downside protection.
Outcome: Non-recourse factoring shifts bad-debt risk to the financier for an additional fee.
Seasonal business needing cash plus collections support
Why: Quarter-on-quarter growth, internal team fully utilised.
Outcome: Selective factoring on largest invoices; full ledger out of scope.
Lenders for this product
Who we work with.
- Scottish Pacific
- Earlypay
- Apricity Finance
- Marketlend
Lender accreditation varies; not every lender is available for every deal. We pick from the panel based on your specific situation.
How it works
From brief to settlement.
- 01
Receivables and operations review
We review the debtor book, customer mix, internal AR capacity, and your view on visibility. The right structure depends as much on operations as on the numbers.
- 02
Recourse decision
We model recourse vs non-recourse on your debtor profile so the bad-debt protection decision is explicit, not implied.
- 03
Lender shortlist and audit
Two or three lenders return indicative terms; the chosen lender runs a debtor audit (typical 1 to 2 weeks).
- 04
Onboarding and first draw
Customer notification letters, portal set-up, first invoice assignment. Collection runs through the financier from go-live.
Indicative pricing & terms
Ranges, not promises.
Rate range
1.5 to 4% service fee per invoice + interest on advance
Loan size
80 to 90% advance rate
Term
Ongoing facility, typical 12 to 24 month commitment
Security
Receivables ledger; recourse or non-recourse structure
Indicative only; specific pricing depends on lender, security, and your business profile.
Frequently asked
Honest answers, plain English.
Customer perception of factoring?
In the 1990s factoring carried a "business in trouble" stigma; that's now mostly outdated for sectors like manufacturing, transport, and wholesale where factoring is recognised as a normal growth tool. In B2B services and creative industries, perception can still be sensitive; for those, confidential invoice discounting is usually the better fit.
Recourse vs non-recourse, what's the difference?
Recourse means unpaid invoices come back to you after a set period (typically 90 days past due). Non-recourse means the financier carries bad-debt risk for an additional fee (typically 0.3 to 0.7% of invoice value). Non-recourse only protects against customer insolvency, not commercial dispute.
What happens at end of facility?
Most factoring agreements run 12 to 24 months with rolling renewal. Exit notice is typically 60 to 90 days. Wind-down works as the existing debtor book clears; new invoices stop being assigned during the wind-down period.
Switching from factoring back to in-house?
Doable but takes 2 to 4 months to fully unwind, particularly if collection has been outsourced for a long time. Plan to rebuild internal collection muscle before triggering exit; the worst time to discover a thin AR team is during transition.
Industry restrictions?
Most factoring lenders have favoured industries (manufacturing, transport, wholesale, B2B services) and avoided ones (construction with progress payments, anything with high dispute rates, retail with low B2B share). We pre-qualify against industry appetite.
How is the discount fee calculated?
Most lenders quote a "service fee" (% of invoice value) and an "interest" or "discount" charge (% on the advance, accruing daily until customer pays). Total cost depends on debtor days. We translate into effective cost per dollar of advance over your typical receipt cycle.
Related products
If this isn't quite the fit.
Next step
Twenty minutes, no obligation.
Tell us the shape of the deal and the timing. We'll send a lender shortlist for factoring or, if it isn't the right fit, an honest signal of what is.