Invoice Finance Broker
Release the cash tied up in your unpaid invoices
/ FCA Registered
Reference: 729876
No longer wait 30, 60 or 90 days to be paid
When you invoice another business, the money you have earned can sit unpaid for weeks or months while you still have suppliers, wages and your own growth to fund. Invoice finance releases most of that cash as soon as you raise the invoice, rather than leaving it tied up until your customer pays.
Mill Wood Finance helps UK businesses put the right invoice finance facility in place, matched to how your business trades rather than to whatever a single provider happens to sell.
What is invoice finance?
Invoice finance is funding secured against your unpaid invoices. A lender advances you most of the value of an invoice soon after you raise it, and you receive the balance, minus their fee, once your customer pays. The funding is secured against your sales ledger, the invoices you have issued and are waiting to be paid on.
Because it is secured against money you have already earned rather than against property or other assets, invoice finance releases working capital without adding conventional debt to your balance sheet. That makes these invoice financing solutions well suited to service-led or asset-light businesses, and to businesses growing faster than their cash flow can comfortably support. As your sales grow the funding available grows with them, which a fixed overdraft or loan does not.
Invoice finance is an umbrella term rather than a single product. The two main forms are invoice factoring and invoice discounting, and the right one depends on how much of the credit control you want to keep in-house.
Invoice factoring and invoice discounting: which fits your business
Most invoice finance falls into one of two types. The practical difference is who chases your customers for payment:
Funding can also be arranged selectively rather than across your whole ledger, financing individual invoices or a single customer account instead of committing every invoice. Part of our job is working out which of these structures fits before you commit to a facility.
Invoice finance for small and newer businesses
Invoice finance can work for businesses that would struggle to secure a conventional loan, including newer ones. Because a lender is largely assessing the creditworthiness of your customers rather than your own trading history, a business can often qualify from early in its life, provided it sells to other businesses on credit terms.
For a smaller business that means funding based on the strength of who you sell to, that scales as you invoice more, and that does not require property or equipment as security. Minimum facility sizes vary between lenders, so part of what we do is find the ones whose criteria fit where your business is now.
Solutions by indsutry
Some sectors lean on invoice finance more than others, usually because long payment terms are built into how they trade. The right facility often depends on the sector, so it is worth knowing how these invoice financing solutions apply to yours.
Invoice finance for accountants
Accountancy practices invoice for work already done, then wait on client payment terms that can run well beyond the month the work was completed. Invoice finance releases fees as they are billed rather than when clients settle, which smooths the gap around quarter and year ends when workload and outstanding fees both peak. Practices moving to fixed monthly billing can use it to steady cash flow while that transition beds in.
Invoice finance for construction
Construction is one of the harder sectors to fund because payment often comes in stages and can involve applications for payment, retentions and contractual terms that standard invoice finance is not built for. Specialist construction finance handles staged and contractual payments in a way general facilities do not. We work out which lenders will support the way your contracts are structured.
Invoice finance for recruitment companies
Recruitment agencies placing temporary and contract workers have to pay those workers weekly while waiting far longer for clients to pay. Invoice finance closes that gap, funding the wage bill against invoices already raised, and facilities can often include payroll and back-office support geared to the volume of timesheets agencies process. It is one of the sectors where invoice finance is most established.
Invoice finance for import and trade businesses
Businesses importing and reselling goods often use invoice finance to release cash from sales while they wait for customers to pay, which frees up working capital to reinvest in stock. For the other side of the cycle, funding the purchase of goods before you sell them, import finance and trade finance are usually the better fit, and the two often run alongside invoice finance.
What invoice finance can include?
Alongside the funding itself, a facility can include bad debt protection: cover that steps in if a customer becomes insolvent or fails to pay, so a single bad debt does not undo the cash flow benefit of the facility.
It is worth considering when you extend credit to customers you cannot easily vet, and it is one of the things we can weigh with you when comparing facilities.
You may be suitable for trade finance if...
- You sell to other businesses on credit terms and wait weeks or months to be paid
- Cash is regularly tied up in your sales ledger when you need it for suppliers, wages or growth
- Your overdraft or existing facility no longer stretches to cover the gap
- You are growing faster than your cash flow comfortably allows
- You would rather fund the business against money already earned than take on more debt
- You want to offer customers credit terms without carrying the cash flow cost yourself
Why use an invoice finance broker?
Every one of the largest invoice finance providers is a lender promoting its own facility. The difficulty for a business is knowing whether that advance rate and that fee are actually competitive, and whether factoring or discounting is the better fit in the first place. A lender answers for its own product. It has no reason to tell you a different provider would serve you better.
A broker such as Mill Wood Finance works across a panel of lenders rather than for any one of them. We compare what different providers will offer against how your business trades, identify the structure that fits, and handle the process through to the facility being in place. Where a business already has invoice finance, we can benchmark the existing facility against the wider market to see whether the terms still stand up, which is not something the incumbent lender is ever going to do for you.
We connect UK businesses with the invoice finance lenders and structures that fit how they trade.
Who are Mill Wood Finance
Since 1999 we have been arranging finance on behalf of UK businesses. We work with businesses whose funding needs sit outside what their bank is willing or able to provide.
Our Ethos
We take the time to understand how your business works before we recommend anything. Our advice is shaped by what your business needs, not by what suits any single lender.
Our Services
We manage the process from first enquiry through to completion, matching you with the right facility from our panel and staying with the case until the funding is in place.
FAQs
Invoice discounting vs factoring: what is the difference?
Both are invoice financing solutions that advance cash against your unpaid invoices. The difference is who runs your credit control. With factoring, the lender manages your sales ledger and collects payment from your customers directly, which is usually visible to them. With discounting, you keep control of collections and customer relationships, normally on a confidential basis, while still drawing funding against your invoices. Factoring tends to suit businesses that would rather hand over chasing payment, while discounting suits those with an established credit control function of their own. We cover each in full on its own page.
How does invoice finance work?
When you raise an invoice to a customer, a lender advances you most of its value soon after the invoice is issued. You receive the remaining balance, minus the lender’s fee, once your customer pays. The facility is secured against your invoices, and the amount available grows as your invoicing grows.
How much does invoice finance cost?
Charges are usually made up of two parts: a service fee for running the facility, and a discount or finance charge on the funds you draw, which works in a similar way to interest. What you pay depends on your invoice volumes, the credit terms you offer and how the facility is structured, so comparing providers matters. We set out the likely cost clearly before you commit to anything.
Is invoice finance suitable for small businesses?
Often, yes. Because a lender is largely assessing the creditworthiness of your customers rather than your own trading history, invoice finance can work for small and newer businesses that sell to other businesses on credit terms. It is worth checking a lender’s minimum facility size, which is something we help with.
Will my customers know I am using invoice finance?
Not necessarily. Invoice discounting is usually confidential, so your customers are not told a facility is in place. Factoring is generally disclosed, because the lender collects payment directly. If confidentiality matters to you, we can prioritise lenders and structures that provide it.
How is invoice finance different from a business loan?
A business loan gives you a fixed lump sum to repay over a set term. Invoice finance instead releases cash you have already earned, secured against your invoices rather than your assets, and the funding available rises and falls with your sales rather than staying fixed.
What happens if my customer does not pay?
This depends on whether your facility includes bad debt protection. Without it, responsibility for an unpaid invoice usually returns to you. With it, you are covered against a customer becoming insolvent or failing to pay. We can talk through whether that protection is worth building into your facility.
Is Mill Wood Finance regulated?
Yes. Mill Wood Finance Limited is authorised and regulated by the Financial Conduct Authority for its credit broking activities. Our Firm Reference Number is 729876 and can be verified on the FCA register. We have been operating since 1999.
Speak to one of our leading invoice finance brokers
- Free Consultation
- Dedicated Account Manager
- Transparent Fees
Whether you are considering invoice finance for the first time or you are reviewing a facility you already have, we are happy to talk through your situation. You can book a meeting using the calendar below, visit our Brighton office, call us on 01273 523690 or email info@millwoodfinance.com.