Invoice finance is a popular way to unlock cash tied up in unpaid invoices. Whether you’re looking to top up your cash flow or accelerate your growth plans, invoice finance brokers can help streamline the process of choosing an invoice finance provider and getting paid. 

In this article we’ll look at how UK invoice finance brokers work and compare some of the most popular options available for businesses.

What is an invoice finance broker?

An invoice finance broker acts as an intermediary between businesses and invoice finance providers. Their main role is to check your requirements and connect you with the most suitable lender or funding option. Given their wide network of providers – as well as specialist expertise, brokers can offer several advantages compared to going direct, such as:

• Negotiating competitive rates and fees.
• Providing tailored advice on the right option, be it factoring, invoice discounting, or selective invoice finance
• Simplifying the application process, saving time and effort.
• Helping explain and contextualise the products available.

For small businesses or those new to invoice financing, using a broker can ensure you avoid hidden pitfalls and maximise the benefits of whichever option you go for.

How does invoice financing work?

Invoice financing enables businesses to unlock cash flow without waiting for customers to pay their invoices, with a finance provider advancing up to 95% of the invoice value. The process is straightforward, designed for speed and simplicity:

1. Issue Invoice: Your business finishes its service or delivers goods to a customer and raises an invoice.
2. Apply for finance: Your business submits the invoice to a finance provider (via a broker, if needed).
3. Receive advance: The provider advances a percentage of your invoice value, typically between 70% and 95%, within 24 to 48 hours.
4. Customer payment: Your customer pays the invoice directly to the provider (or the business, depending on the type of financing).
5. Final payment: The remaining balance is released to your business, minus the provider's fees.

The process is designed to work quickly, ensuring businesses that need capital in a hurry can get paid on time. And depending on the type of finance or provider, they can also handle the back office processes of chasing payment – which we’ll explain in the next section.

What are the types of invoice finance?

The main types of invoice finance include invoice factoring, invoice discounting, selective invoice finance and spot factoring, which suit varying use cases depending on your business situation.

1. Invoice factoring

In invoice factoring, the finance provider purchases your invoices and manages credit control and collections. This type of finance can be great for businesses that want to outsource the actual legwork of chasing payments and focus on making use of funds.

• Advantages: Fast funding and reduced administrative workload.
• Disadvantages: Customers are aware of the factoring arrangement, which may affect relationships.

2. Invoice discounting

Invoice discounting offers a confidential solution where businesses retain control of their credit management while borrowing against unpaid invoices. The provider advances a percentage of the invoice's value, but customers remain unaware of the arrangement.

• Advantages: Confidential and suitable for larger businesses with established credit control systems.
• Disadvantages: Responsibility for collections remains with your business.

3. Selective invoice finance

Selective invoice finance allows businesses to choose specific invoices or customers to finance. This offers a bit more flexibility, particularly for companies with changing cash flow needs or those wanting to finance only high-value invoices.

• Advantages: No long-term commitments and more control over financing.
• Disadvantages: May have higher fees compared to traditional factoring or discounting.

4. Spot Factoring

Similarly to selective invoice financing, spot factoring enables businesses to fund one-off invoices rather than the entire sales ledger. This is ideal for companies facing occasional cash flow gaps.

• Advantages: No ongoing agreements, flexible funding.
• Disadvantages: Typically more expensive per transaction.

Invoice finance brokers

1. Bespoke Commercial Finance

Bespoke Commercial Finance offer invoice factoring and discounting, as well as a range of other lending options

• Special features: Confidential funding tailored to businesses who want to keep control of their ledger.
• Funding speed: Up to 90% of invoice value within 24 hours.
• Best for: Businesses looking for bespoke solutions​.

2. Invoice Funding

Invoice Funding offers factoring and invoice discounting.

• Special features: Access to over 40 providers, with funding available for single invoices or entire ledgers.
• Funding speed: Up to 100% of invoice value within 24 hours.
• Best for: Businesses looking for choice.‍

3. Pegasus Funding

Pegasus Funding offers factoring, discounting, selective invoice financing, and other financial products.

• Special features: Support from a panel of over 44 providers, with tailored advice and competitive rates.
• Funding speed: Within 24 hours.
• Best for: Startups, growing businesses, and turnaround scenarios​.

4. Hilton-Baird Financial Solutions

Hilton-Baird offers factoring, discounting, and bad debt protection.

• Special features: FCA-authorised broker offering a wide range of services and additional credit risk protection.
• Funding speed: Up to 90% of invoice value within 24 hours.
• Best for: Risk-averse businesses​.

5. Touch Financial

Touch Financial specialises in factoring and discounting across multiple industries.

• Special features: UK's largest invoice finance broker with access to 25+ lenders; low rates starting from 0.1%.
• Funding speed: Up to 100% of invoice value within 24 hours.
• Best for: Businesses seeking industry-specific solutions.

6. SME Invoice Finance

SME Invoice Factoring services include factoring and discounting.

• Special features: Simple application process with competitive lender matching.
• Funding speed: 95% of invoices within 24 hours.
• Best for: Businesses looking for quick and straightforward funding solutions​.

7. Bolton Business Finance

Bolton Business Finance have a range of finance services, including spot factoring and single invoice discounting.

• Special features: No long-term contracts, ideal for funding single large invoices.
• Funding speed: Within 24 hours.
• Best for: Businesses requiring ad hoc funding​.

8. Funding Solutions

Funding Solutions services cover business finance across the spectrum, including invoice discounting, and asset-based lending.

• Special features: Customised and unbiased finance solutions with independent advice.
• Funding speed: Up to 90% of invoice value within 24 hours.
• Best for: Businesses seeking tailored advice​.

9. Cornerstone Commercial Finance

Cornerstone Commercial Finance offers business loans, mortgages and finance, including invoice factoring, discounting, and selective invoice finance.

• Special features: Transparent fees and flexible, confidential services.
• Funding speed: Up to 95% of invoice value within 24 hours.
• Best for: Businesses seeking flexibility and discretion​.

10. Hank Zarihs Associates

Hank Zarihs Associates are business finance generalists, including offering invoice finance, factoring and discounting.

• Special features: Broad financing expertise, including other business finance options.
• Funding speed: Typically within 24–48 hours.
• Best for: Businesses needing diverse financing solutions​.

11. Clifton Private Finance

Clifton Private Finance are a specialist finance broker, including providing invoice factoring, discounting, and merchant cash advance.

• Special features: Focused on businesses with turnovers from £50,000 to £25 million; offers dedicated client support.
• Funding speed: Within 24 hours.
• Best for: Businesses seeking flexibility and personalised service​.

12. Evangate Financial Solutions

Established over 10 years, Evangate Financial Solutions offer a range of financial broker products, including invoice factoring and discounting.

• Special features: Offers a 90-day trial with no setup fees, ideal for startups.
• Funding speed: Up to 90% of invoice value within 24 hours.
• Best for: SMEs and startups looking for a low-risk trial​ of invoice finance.

13. Enness Global

Enness Global focuses on high-value invoice factoring and discounting.

• Special features: Specialises in complex transactions for niche industries, with access to 500+ lenders globally.
• Funding speed: Within a few days.
• Best for: High-value invoice financing and niche markets​.

14. Jones & Co Finance

Jones & Co cover a range of finance and funding services, including invoice factoring and credit control services.

• Special features: Tailored solutions with a focus on startups and growing businesses.
• Funding speed: Typically within 24 hours.
• Best for: Small businesses needing additional credit control support​.

15. Simply Factoring Brokers

Despite their name, Simply Factoring also covers business loans and asset finance, as well as invoice factoring and discounting for SMEs.

• Special features: Simple onboarding, no long-term contracts, and fast approvals.
• Funding speed: Payment within 24 hours.

Best for: SMEs looking for hassle-free financing​.

Invoice brokers comparison table

Alternatives to invoice finance brokers

While invoice finance brokers can provide tailored access to funding, invoice finance carries certain limitations:

• Limited funds: Your maximum credit is limited to the value of your invoice, minus fees.
• Higher cost: The cost for invoice finance can be higher than other forms of finance, including interest rates between 1.5% and 3% per year above the Bank of England base rate and management fees of around 0.2% - 2.5% of the value advanced, depending on the product.

An iwoca Flexi-Loan can give your business quick access to funds for managing cash flow, investing in growth, or covering unexpected expenses. With customisable borrowing limits and repayment terms, it’s an ideal option for businesses looking for flexible capital that can adapt to their needs.

1. Quick application: Apply online in minutes, with a decision typically within 24 hours.
2. Flexible borrowing: Borrow up to £1,000,000 for up to 60 months.
3. Transparent costs: Know exactly how much you’ll repay, with no hidden fees or unexpected costs.
4. Control your costs: Overpay or pay off your loan early to save on interest, with no fees.

Whether you need a fast injection of cash or a longer-term solution for managing growth, iwoca offers a pain-free alternative to invoice finance. Find out more with our small business loan calculator.