Invoice Finance Solutions
Transform your invoices into immediate working capital with invoice finance.
What is invoice finance?
Invoice finance helps your business get funds quickly by using outstanding invoices owed to your business. Instead of waiting for customers to pay, you can get the value of your invoice right away. This keeps your cashflow steady and predictable.
How does invoice finance work?
With invoice finance, you can get the agreed invoice amount as soon as you send it to your customer.
This differs from traditional loans because it can grow with your business and provides a flexible way to manage cash flow.
As your sales increase and you issue more invoices, the available funding can also rise. This means that you can have access to cash that matches your current business activity, making it easier to manage day-to-day operations and invest in growth opportunities.
By shifting the focus from your business to the creditworthiness of your clients, we aim to level the playing field for businesses seeking fast access to working capital.
What are the different types of selective invoice finance?
There are two main types of selective invoice finance, invoice factoring and invoice discounting. While the concepts are similar, there are some key differences to keep in mind.
Spot Invoice Financing
(Factoring)
Payment collection
Customer contact
Ledger & credit control
One or more invoices
Fees based on invoice
One-off or occasional
Confidential Invoice
Discounting
Payment collection
Customer contact
Ledger & credit control
One or more invoices
Fees based on invoice
One-off or occasional
The key difference
One key difference between invoice factoring and invoice discounting is who handles the payments.
With invoice factoring, we take care of your sales ledger, manage credit control, and collect payments from your customers for you. This means you don’t have to spend time chasing payments and can focus on running your business.
If you’d rather keep control of collecting payments yourself, check out invoice discounting.
Both methods let you access the funds from your unpaid invoices* the same day you issue them. Keep reading to learn more about each option.
What is invoice factoring?
Invoice factoring is a way to get fast funds where your customers pay their invoices directly to the factoring company.
With this option, we handle everything related to your invoices. We manage credit control and collect payments from your customers on your behalf, giving you time to focus on the day-to-day running of your business.
Raise an invoice
Get paid instantly
We collect payment
What is invoice discounting?
Invoice discounting is a way to get cash quickly and confidentially, where your customers continue to settle their invoices directly with you.
This method keeps the process private - your customers don’t know a third party is involved. With invoice discounting, you keep control of managing payments and your sales ledger.
You send a copy of the invoice to the discounting provider and receive the agreed amount right away.
Raise an invoice
Get paid instantly
You collect payment
What industries use invoice finance?
Invoice finance is ideal for businesses that struggle with waiting for lengthy payment terms. It helps companies get cash quickly by using your unpaid invoices,* so you don’t have to wait days or weeks for payment.
This type of financing is used successfully by a wide range of industries, including recruitment, manufacturing, healthcare, and engineering.
Our team of experts has experience across many different industries and is dedicated to finding the best funding solution for your business.
Advantages of UK invoice financing
Invoice finance offers a range of benefits that can help your business run smoothly, such as:
Fast access to funds
Get money from unpaid invoices* right away, so you don’t have to wait for customer payments.
Flexible use
Choose which invoices to finance and when, with no long-term commitments.
Scale with your business
As your business grows, so does your ability to finance invoices with us.
Simplified collections
We can handle collecting payments from your customers, saving you time and effort.
Better financial planning
Quick access to cash helps you plan your finances more effectively and reduces stress from waiting for payments.
Pay suppliers on time
Have cash on hand to pay suppliers promptly, improving relationships and possibly getting better deals.
Support business growth
Use the funds to invest in growth opportunities like buying more stock, hiring staff, or expanding your business.
Improved cash flow
No more waiting for customers to settle invoices - you can keep day-to-day operations running smoothly.
Disadvantages of UK invoice financing
To help you make an informed decision, there are a few things to keep in mind:
Fees
Fees for using invoice finance will be deducted from the funds you receive. It’s worth considering how these fees might affect your overall costs.
Less control
With factoring, we handle the collection of payments for you, which means you’ll have less direct control over the process.
Customer relationships
Some customers might not like a third party handling their payments. We aim to manage this smoothly to keep your customer relationships positive. Alternatively, we offer a confidential option.
Paperwork
Some administrative work is involved in managing and submitting invoices for financing. That’s why we made our online submission process as easy as possible so it takes only a matter of minutes.
Is invoice finance right for my business?
Invoice finance lets you use your unpaid invoices* to get quick cash. Here’s a checklist to help you decide if it’s right for your business:
Understanding
Do you know what invoice finance is and how it works? Are you clear on the differences between factoring and discounting?
Needs
How much money do you need and why? Will invoice finance meet your needs? Have you planned how you will use the funds?
Suitability
Does your business issue invoices? Does invoice finance fit with your business goals?
Eligibility
Do you have unpaid invoices*? What’s their value? This affects how much money you can get.
Amount
Are you looking for an amount that aligns with what invoice finance providers typically offer?
Status
Are you an established business with a history of receiving payments on invoices?
Financials
Are your financial records detailed and up-to-date? Do your statements show a good record of payment? How long does it take you to get paid?
Accounts
Are your accounts in good shape? Invoice finance providers will check your financial statements and credit report. Are you confident in their accuracy?
Usage
How will you use the funds if you get them? Have you thought about the impact on your business?
Costs
Do you know how much invoice finance will cost you? What are the fees and margins?
Management
Will you manage the sales ledger and collect payments, or will the finance provider do it?
Agreement
How long will the invoice finance arrangement last? What happens when it ends?
Secure your funding today
With our real-time results, you can discover how much funding you can access straight away. Simply enter a few details to get your instant quote. Create a free account and give it a go - it’s that easy.
Am I eligible for UK invoice finance?
To be eligible for invoice finance with Penny, you need to:
Have an invoice value of £500 to £500,000
Be a limited company, partnership, or sole trader
Be HMRC registered and based in England, Scotland, or Wales
Have B2B invoices for goods or services delivered
How much does invoice finance cost?
The cost of invoice finance can vary because it’s customised to fit your business' needs. We work closely with you to create a plan that suits your specific situation and goals This means we aim to offer a pricing structure that is fair and flexible for your business.
That’s why we offer a free, no-obligation quote to give you a clear idea of the costs involved. If you have any questions, we’re here to provide clear answers and help you understand the details.
Feel free to reach out with any questions - we’re here to help.
How do I apply for invoice finance?
It’s quick and easy to apply for UK invoice finance with Penny.
Open an account
Register with us in just a few minutes. There are no long-term commitments, and you don’t need to finance your entire sales ledger to open an account.
Upload your invoices
In your account dashboard, choose which customer invoices you want to finance and when you want to do it. We’ll then carry out the necessary checks and give you a no-obligation quote.
Get paid within 24 hours
Once your invoice is approved, we’ll pay you the agreed amount of the selected invoice. Thanks to Open Banking, you’ll receive the funds in your account in as little as two hours.
Frequently asked questions
How can invoice finance generate fast cash flow?
Invoice finance helps you get cash quickly by letting you access the money tied up in your unpaid invoices.*
- When you send an invoice to a customer, you usually have to wait weeks or months for them to pay.
- With invoice finance, you send the invoice to a finance provider like Penny.
- We give the agreed invoice amount in as little as two hours.
- This way, you get quick access to cash without waiting for your customers to pay.
What are the risks of invoice finance UK?
While invoice finance has many benefits, there are some risks.
Some customers might not like that a third party is handling their payments, which could affect your relationships with them. To overcome this, we also offer a confidential facility that means you can get the funds upfront without your customer’s knowledge.
Furthermore, if you use disclosed invoice finance, the finance company will manage payment collection, so you have less control over the process. On the other hand, this will save you time, giving you greater capacity to focus on what matters most - your business.
Understanding these risks can help you decide if invoice finance is right for your business.
Who manages the sales ledger and collects payments?
In UK invoice financing, who manages the sales ledger and collects payments depends on the type of invoice finance you choose:
Invoice factoring: With invoice factoring, you don’t have to worry about collecting payments yourself. We take over the management of your sales ledger and handle the collection of payments from your customers. We’ll track your invoices, followup on payments, and take care of the entire credit control process.
Invoice discounting: With invoice discounting, you retain control over your sales ledger and continue to collect payments from your customers directly.
We’ll give you the funding based on your invoices but we don’t handle the payment collection process.
Get started with Penny
Over 10,000 business owners have already changed the way they manage their cash flow.
*Unpaid invoices refers to invoices within their agreed payment terms.