Invoice discounting in the UK: confidential cash from your ledger

Invoice discounting is a form of invoice finance that lets you draw down cash against your unpaid invoices while keeping full control of your sales ledger. For many established UK businesses, it's the most flexible, lowest-profile way to smooth cash flow.

How it works

You raise invoices as normal and the funder makes a percentage of their value — commonly up to 90% — available to draw straight away. You continue to collect payment from your customers yourself. As customers pay, the facility revolves, and you can keep drawing against new invoices.

Confidentiality is the headline benefit

Discounting is usually confidential: your customers see no change and need never know a funder is involved. You keep your own credit control and customer contact, which is why discounting tends to suit businesses with their own finance function and reliable collections.

Discounting vs factoring

The key difference is who chases payment. With discounting you keep that in-house; with factoring the funder does it for you. Discounting is typically a little cheaper as a result, but it assumes you have the systems to manage collections well.

Is it right for you?

As a guide, funders look for UK SMEs selling B2B on credit terms, with reliable credit control and a minimum turnover of around £50,000 — though every business is assessed on its own merits.