Get paid on the day you invoice, not ninety days later.
If your customers are large and slow, the cash you are owed is doing nothing. Invoice finance releases most of it immediately and settles up when they pay.
The money is already yours — this brings it forward
With What this meansReleasing cash tied up in unpaid invoices. A lender advances most of the invoice value now and settles up when your customer pays., a lender advances typically 80–90% of an invoice as soon as you raise it, then pays you the balance, less their fee, once your customer settles. The facility grows as you grow: bigger sales mean a bigger limit, automatically.
There are two shapes. What this meansInvoice finance where the lender also chases payment from your customers, so they know the facility exists. The alternative, invoice discounting, stays confidential and you keep the credit control. hands credit control to the lender, who chases payment directly — cheaper, and your customers know. Confidential invoice discounting leaves the chasing with you and your customers see nothing.
Who it works for
It suits businesses that invoice other businesses on terms. It does not suit retail or anything paid at the point of sale.
Typically a good fit when
- You invoice other businesses, on 30 to 120 day terms
- Growth is being held back by cash sitting in the debtor book
- Your customers are creditworthy — the lender is relying on them as much as on you
- Invoices are raised after the work is finished, not in advance
- You would rather fund growth from your own sales than take on a loan
How the cost is built
Two charges, usually. A discount charge, which works like interest on the money advanced, and a service fee, a small percentage of turnover for running the facility. Together they typically land between 1% and 5% of the invoice value.
Watch the small print rather than the headline: minimum fees, concentration limits if one customer dominates your book, and how long a facility ties you in. We will read that with you before anything is signed.
The five things to ask any provider
- The advance rate — what percentage arrives on day one
- The discount charge and the service fee, quoted separately
- Minimum monthly fees, whether or not you draw
- The notice period and any termination fee
- What happens if a customer simply does not pay (recourse)
Questions we are asked most
Will my customers know?
With factoring, yes — the lender collects payment and your customers deal with them. With confidential invoice discounting, no: you continue to invoice and collect as normal, and the arrangement stays between you and the lender. Discounting usually requires stronger systems and a bit more scale.
What if a customer refuses to pay?
That depends on whether the facility is with recourse or without. With recourse — the common and cheaper option — the debt comes back to you after an agreed period. Without recourse, the lender carries the loss, and charges more for doing so.
This is the clause worth understanding properly before you sign, because it is the one that bites in a bad quarter.
Can I fund only some invoices?
Often, yes. Selective or spot invoice finance lets you pick individual invoices or a single customer rather than committing the whole book. It costs more per invoice but avoids tying up the entire sales ledger.
Find out how much cash your debtor book is holding.
Send us an aged debtor report and we will come back with realistic numbers.
Or email info@nemekfinance.co.uk · Call 07483 159369
No obligation, no credit check to talk, and a straight answer if finance is not the right move.