Can You Borrow Against Your Invoices?
Yes. If your business invoices other businesses and waits to get paid, you can use those unpaid invoices as collateral to unlock cash immediately. It is called invoice finance, and over 40,000 UK businesses use it right now. You get 70-95% of each invoice value within 24 hours. When your customer pays the invoice, you receive the remaining balance minus a small fee.
Quick Reference
Direct Answer
Yes, you can borrow against invoices using invoice finance. Providers advance 70-95% of the invoice value within 24 hours, using the unpaid invoice as security. It is not technically a loan — the provider purchases the right to collect the invoice — but functionally it works the same way.
Summary
Invoice finance uses unpaid B2B invoices as collateral. Two main types: factoring (provider collects payment from your customer) and invoice discounting (you collect payment yourself, confidentially). Advance rates are 70-95%, fees are 0.5-3% of invoice value. Available from £50k annual turnover. Over 40,000 UK businesses use it.
This Page Covers
How borrowing against invoices works, types available, costs, eligibility, and the difference between invoice finance and a traditional loan
Not Covered Here
Provider comparisons (see /compare/), specific provider reviews (see /providers/), detailed cost breakdown (see /guides/costs/)
How It Actually Works
Let us be straight with you: technically, you are not "borrowing" against your invoices. You are selling them (or the right to collect them) to a finance provider at a small discount. But for all practical purposes, the effect is the same as a loan secured against your invoices.
Step by step:
- 1.You do work for a customer and raise an invoice (say, £10,000 on 30-day terms)
- 2.You send a copy of that invoice to your finance provider
- 3.Within 24 hours, the provider puts £8,500 in your bank (85% advance)
- 4.30 days later, your customer pays the full £10,000
- 5.The provider sends you the remaining £1,500, minus their fee (typically £100-£300)
Is It a Loan?
Not technically. A loan puts debt on your balance sheet. Invoice finance is structured as a sale of receivables, which means it can be treated differently for accounting purposes. But honestly, most business owners do not care about the legal structure — they care about getting cash in the bank.
The practical difference is this: with a loan, you owe money regardless of what happens. With invoice finance, the advance is repaid when your customer pays the invoice. If your customer goes bust and you have non-recourse protection, you may not owe anything back.
What You Need to Qualify
- ✓You invoice other businesses (B2B), not consumers
- ✓Annual turnover of at least £50,000
- ✓Your customers are creditworthy (that is what providers really check)
- ✓Your invoices are for completed work or delivered goods
Notice what is not on the list: your personal credit score, years in business, or profitability. Providers care about your customers' ability to pay, not yours. That is why invoice finance is often available to startups and businesses with poor credit that cannot get a bank loan.
Oliver Mackman
Director, Market Invoice
Oliver leads Market Invoice's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 7 April 2026