Invoice factoring in two minutes: the essentials

If you just want the essentials, here they are. Invoice factoring is a simple idea wrapped in technical-sounding language.

The idea in one line

You sell your unpaid invoices to a funder, who pays you most of their value straight away and the rest, minus a fee, once your customer pays.

How it works in practice

Raise an invoice, upload it, and receive an advance — commonly up to 90% — usually within a day or two. The funder collects payment from your customer, then releases the remaining balance to you, less the agreed fee. Because it's tied to your invoicing, the funding grows as your sales grow.

Why use it

It turns slow, uncertain receivables into fast, predictable cash, with no monthly repayments to service. That makes payroll, supplier payments and the next contract far easier to manage.

Who it's for

UK SMEs that invoice other businesses on credit terms and then wait to be paid. If that's you, factoring is worth a closer look — and we're happy to explain the detail in plain terms.