Metro Bank Invoice Financing: What You Need to Know

Introduction

Invoice financing is an increasingly popular form of lending, with the market predicted to grow 8.16% year-on-year between now and 2032. When looking around at providers, businesses can choose from a range of specialist lenders and generalists. In this article, we’ll take a look at Metro Bank invoice financing which has been a big focus for the challenger bank. We’ll break down what Metro Bank provides, the benefits of its solutions and other handy options to keep your business finances moving.

What is Metro Bank’s invoice financing?

Metro Bank offers small businesses two main types of invoice financing, plus a tailored, more modest solution for newer businesses. Their aim is to make funding accessible and manageable for SMEs that need relief or support managing their cash flow for growth.

1. Invoice factoring

With Metro Bank’s invoice financing, you can get up to 85% of your invoice value advanced within 24 hours and leave credit control to Metro Bank. This means they take responsibility for getting those bills paid – so you can spend less time chasing payments. Invoice factoring is designed for businesses without an in-house credit control team, giving you both funds and support to manage your invoices.

2. Invoice Discounting

This is similar to factoring in terms of cash flow, but without the added credit control support. This option keeps your ledger and client relationships confidential, as Metro Bank works behind the scenes providing the cash, but leaving the responsibility with you to make sure your clients pay up. It’s ideal for businesses that already handle their own credit control and want a discreet financing option.

3. Small Business Option

Metro Bank’s simplified package specifically for smaller or new businesses provides up to £100,000 in funding. With one single service fee and no discount fees, this option offers straightforward pricing and access to essential funds for businesses with growing cash flow needs​​​.

How does Metro Bank invoice financing work?

Invoice finance with Metro Bank is designed to be simple, sharing the invoices you want paid and letting the funder handle as much of the rest of the process as you want. Here’s a step-by-step look at how it works:

1. Invoice creation: You send an invoice to your customer (debtor) for goods or services provided.
2. Upload your invoices: Once the invoice is issued, you upload it to Metro Bank’s system. This submission allows Metro Bank to review and prepare to fund the invoice.
3. Funds availability: Metro Bank can make up to 85% of the invoice value available to you, often within 24 hours. This quick access to funds provides you with cash flow to support ongoing business needs.
4. Credit control by Metro Bank (factoring): For businesses using Metro Bank’s factoring service, they also handle credit control, meaning they will follow up on payments and manage collections directly.
5. Payment collection: When your customer pays the invoice, they send the payment directly to Metro Bank. Once received, Metro Bank forwards the remaining balance (minus fees) to you.

Why choose Metro Bank invoice finance?

Invoice finance is a useful way to turn your accounts receivable into ready cash, and the Metro Bank process offers several advantages to small businesses. 

1. Access to funds, fast

Get cash from your unpaid invoices quickly, with up to 85% of the invoice value accessible within 24 hours. This can help smooth out cash flow so you can focus on growing your business instead of waiting for customers to pay​​.

2. Flexible terms with no long commitments

Metro Bank invoice finance solutions come with flexible contracts that only require 28 days’ notice for cancellation—no penalties attached. This is ideal if you’re looking for a short-term cash flow solution that doesn’t lock you in​​.

3. Straightforward fees

With service fees between 1-3% and discount fees from 1.5-3.5%, you know upfront what to expect. Their small business option waives discount fees, making it a cost-effective solution for smaller businesses​​.

4. Credit control assistance (if you want it)

With factoring, Metro Bank takes on the role of credit control, managing invoice collection and customer payments on your behalf. 

Is Metro Bank invoice finance right for your business?

Metro Bank’s invoice financing services could be a good fit if you:

• Are a small to medium-sized business needing regular cash flow boosts.
• Sell products or services on credit and want to access funds before customer payments come in.
• Don’t have an internal team to manage credit control (factoring) or already have a reliable credit control system in place (discounting)​​.

Alternatives to Metro Bank invoice finance

Invoice finance can be a valuable support for businesses waiting for invoices to be paid, but it comes with limitations. The financing limit is set by the value of the outstanding invoices, meaning it can be less flexible when it comes to larger or long term investments.

If flexibility and speed are top priorities for your business, iwoca’s Flexi-Loan can offer rapid access to funds without the need to provide invoices for collateral or risking your accounts receivable.

• A range of loan amounts: Borrow between £1,000 and £1,000,000, whether you’re managing short term cash flow or planning for the future. 
• Flexible repayment: Repayment periods range from 1 day to 60 months, with the ability to overpay or repay early with no extra charges.
• Rapid funding: With decisions often made within hours, funds can be deposited into your account as quickly as the same day.
• Agile and adaptable: Top up your loan as needed once you’ve repaid a third of the outstanding balance.
• Interest that fits your cash flow: Interest is only charged on the amount you actually draw down, not the entire loan amount, which helps to reduce overall borrowing costs​.

How to finance your business 

Metro Bank’s invoice finance products are a solid choice for businesses looking to improve cash flow using unpaid invoices, especially those that would benefit from outsourced credit control. But if you’re looking for a fast, flexible financing option that’s fully online, iwoca’s small business loan offers a modern alternative—giving you control, quick access to funds, and the freedom to repay on your terms. 

Find out more about iwoca short term loans and finance – and see how much you could borrow – with our business loans calculator. 

Sources

• Invoice Factoring Market Size by Category (International, Domestic), Type (Non-Recourse, Recourse), Financial Institution (Non-Banking Financial Institutions, Banks), Regions, Global Industry Analysis, Share, Growth, Trends, and Forecast 2023 to 2032
• Invoice Finance – improving your cash flow