Invoice factoring
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Cash flow challenge: I need to unlock cash from unpaid customer invoices
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Perfect for: New businesses and SMEs who invoice clients on payment terms and want to improve cash flow by outsourcing collections
Novuna helps you compare trusted invoice factoring providers, understand the terms, and apply with confidence.
Compare invoice factoring quotes compiled by the multi-award winning Novuna Business Cash Flow
Get paid in 24 hours if needed
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Rates from 0.5%
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Same day funding available
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Get up to 100% of invoice value
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Expert help to guide you through the process
Fast decisions. Flexible options. Funding over £2bn to more than 1,000 SMEs every year.
Call us on 020 4632 1977 to speak to a real cash flow expert. We’ll help you apply for the right type of finance and make sure you get a great deal for your business.
Or click 'Boost your cash flow' below to compare providers.
Related debt financing options
Pages in this SectionWhat is invoice factoring?
Invoice factoring allows you to sell your unpaid invoices to a factoring company in exchange for an immediate cash advance typically up to 90% of the invoice value.
The factoring provider then takes over credit control and collects the payment directly from your customers.
This helps you unlock working capital quickly without waiting 30, 60 or 90 days for payment ideal for businesses that need to stay liquid. Novuna can assist with invoice factoring for large & small businesses.
Invoice factoring for new businesses
Starting a new business means cash flow pressure is often immediate as you're issuing invoices from day one, but clients may be on 30, 60, or even 90-day payment terms. Invoice factoring is one of the few funding options that works well for new businesses because eligibility is based on the value of your invoices, not your trading history or credit record.
This makes it a particularly accessible option for new businesses that may not yet qualify for traditional loans. As your invoice volume grows, the facility scales with you, giving you a cash flow solution that grows alongside the business.
The advantages of invoice factoring
- You receive most of an invoice's value straight away rather than waiting weeks to be paid
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Because the provider's credit control team handles collections on your behalf, you free up the time you'd otherwise spend chasing payments and often find that your invoices get settled more quickly too
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Since the facility is linked to your sales ledger, the funding available grows in step with your invoicing, so unlike a fixed loan or overdraft it keeps pace as your business expands
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It's usually quicker and cheaper to arrange than a traditional bank loan, with considerably less admin and no need to secure the funding against property
Things to consider for invoice factoring
- Your customers will be aware that a finance provider is involved, as they'll pay the provider directly
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Factoring tends to work best for businesses that invoice a spread of B2B customers rather than relying on just one or two, and if you'd rather fund only selected invoices then selective invoice finance may be the better fit
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Your fees will reflect both your turnover and how reliably your customers settle up
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Most facilities are designed to work as an ongoing arrangement rather than a one-off, so it's a decision worth making with the full picture in mind
Is invoice factoring right for my business?
Invoice factoring will suit you best if:
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You invoice other businesses (B2B) on 30, 60 or 90-day terms
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Cash tied up in unpaid invoices is holding back day-to-day operations or growth
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You're spending too much time chasing payments, or don't have a dedicated credit control function
It may not be the right fit if:
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You sell mainly to consumers (B2C) rather than businesses.
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You have only one or two large customers — talk to us about alternatives.
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You'd prefer your customers not to know finance is in place — consider invoice discounting instead.
How much does invoice factoring cost?
Invoice factoring is made up of two costs:
- A service fee - a percentage of your turnover (typically around 0.5%–3%), covering credit control and management of your sales ledger
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A discount fee - similar to interest, charged on the funds you draw down, usually a margin over the Bank of England base rate
An illustrative example:
| Your situation | What it could look like |
| Invoice raised | £10,000 |
| Advance released to you (up to 90%) | Up to £9,000 - often within 24 hours |
| Service fee (illustrative, ~1.5%) |
£150 |
| Balance paid to you when your customer settles | Remaining value, minus the agreed fee |
Invoice finance v invoice discounting
| Invoice factoring | Invoice discounting | |
| Who collects payment | The provider's credit control team | You keep control of collections |
| Do customers know? | Yes — they pay the provider | Usually confidential |
| Best for | Businesses that want to hand over chasing | Businesses with their own credit control |
| Time saved on admin | High | Lower |
How invoice factoring works with Novuna Business Cash Flow
- Tell us your funding challenge - complete a short form or call
- We compare providers and recommend a great fit for your situation
- You apply with full support from a cash flow expert
- Get access to funding quickly and keep cash flowing
Fast decisions. Flexible options. Funding over £2bn to more than 1,000 SMEs every year.
Is invoice factoring right for you?
You want to improve cash flow without waiting for invoices to clear
This is the primary reason businesses use invoice factoring - unlocking working capital tied up in unpaid invoices.
You’d prefer a provider to manage credit control
Invoice factoring includes outsourced credit control, making this a major benefit and time-saver for many SMEs.
You’re spending too much time chasing payments
Factoring solves this pain point by shifting credit control to the provider, freeing up internal resource.
If this sounds like your situation, invoice factoring could be the right fit.
Novuna can support businesses with a range of funding challenges
What is your funding challenge?
I want funding that keeps my customer relationships private
I only want to fund selected invoices
I want suppliers to be paid upfront so I can extend my payment terms
I want expert help managing late payments
How we help
How Novuna helps businesses access funding fast
Tell us what you need
Start with a simple form or call - tell us your business challenge.
We compare your options
We compare multiple providers to get you a great deal.
Choose the right type of invoice factoring
Access a range of short-term funding options including loans, advances, and invoice finance.
Apply with expert support
Get help applying - with a real expert on hand throughout.
Get clear, transparent terms
No jargon, no surprises - just honest advice with no hidden fees.
Receive funding fast
Get access to finance quickly so you can focus on your business.
Why take action now
Don’t let unpaid invoices hold your business back
Protect cash flow during slower periods
Meet payroll and supplier obligations
Take on new projects with confidence
Why choose Novuna Business Cash Flow?
Why businesses trust us for invoice factoring
We're highly rated by our existing customers
"The communication and support has been outstanding. Providing me with all the information I needed regarding new clients coming onto our books. The system they use is so user friendly and the drawdown payments are very efficient in the fast moving world of temporary payroll.'
More reviewsWe're a multi-award winning business cash flow specialist
Innovation in the SME Sector 2026
Best Provider 2026
Lender of the Year 2026
Alternative SME Lender of the Year
SME Lender of the Year 2023
What invoice factoring looks like in your sector
Get advice tailored to the challenges in your industry
How quickly can I get invoice factoring set up?
Some providers can approve and fund within a few days, and release cash against invoices within 24 hours of set-up. Timing depends on your business and the invoices submitted.
Will my customers know I'm using a factoring company?
Yes, with factoring, the provider collects payment, so your customers pay them directly. If you'd rather keep this private, invoice discounting keeps collections in your hands.
How much can I borrow?
Typically up to 90% of the value of your unpaid invoices, with the balance paid once your customer settles. Some arrangements release up to 100% of value overall.
How much does it cost to factor an invoice?
Costs are usually a service fee (a small percentage of turnover) plus a discount fee on the funds you draw. Your rate depends on turnover, sector and customer risk - we compare providers to find you a great deal.
Is invoice factoring a good idea?
It's a good fit if you invoice other businesses on credit terms and want faster, steadier cash flow without chasing payments. It's less suited to B2C businesses or those with only one or two customers. Our experts will give you an honest view for your situation.
What happens if my customer doesn't pay?
With recourse factoring, an unpaid debt returns to you. With non-recourse factoring, the provider takes on that risk (subject to terms) for a higher fee.
Which businesses can benefit from invoice factoring?
UK businesses that trade with other businesses (B2B) on credit terms - particularly in manufacturing, wholesale, recruitment, construction and logistics.
