Invoice finance jargon, decoded: the only glossary you'll need

Invoice finance comes with its own vocabulary, and the jargon can make a simple product feel complicated. Here are the terms that matter, in plain English.

The essentials

• Advance rate — the percentage of an invoice paid to you upfront, commonly up to 90%.
• Service fee — a percentage of turnover for running the facility.
• Discount charge — a charge on the funds you actually draw, similar to interest.
• Recourse — if a customer doesn't pay within an agreed period, the advance on that invoice reverses to you.
• Non-recourse — the funder carries the risk if a customer becomes insolvent (usually for an extra fee).

A few more you'll meet

• Disclosed vs confidential — whether your customers are told a funder is involved.
• Notice of Assignment — the notice telling a customer to pay the funder (in disclosed facilities).
• Concentration limit — a cap on how much funding one large customer can represent.
• Selective / single-invoice — funding chosen invoices rather than the whole ledger.
• Verification — a light check that an invoice relates to genuine, delivered work.

Knowing these makes comparing quotes far easier — and if a provider can't explain a charge in plain terms, that tells you something too.