Invoice finance early termination fees and switching costs, from published contracts

An early termination charge is usually a monthly figure multiplied by how long you are leaving early. Applied to the same example facility, left 3 months and 15 days early, three published UK contracts (Aldermore, Barclays and Zodeq) give charges from £3,144 to £9,017, because they count different things. This page uses only what can be checked: the termination wording in their published standard terms, the switching-related fees in their published charge schedules, and the Companies House fees and deadlines.

What we read, and what none of it tells you

Three providers publish their standard invoice finance terms in full: Aldermore's General Conditions of Invoice Finance (Version 3/2020, still hosted on its site), Zodeq's Invoice Finance Conditions, and Barclays' Confidential Invoice Discounting Standard Terms (the December 2025 print, with its Pricing Schedule). We read the termination and charges sections of all three.

Two things people most want to know are not in any of them:

• How long the notice period and minimum period are. All three define them only in general terms and leave the number to your own facility letter. Zodeq's wording shows the pattern: notice is "the number of months written notice to end this agreement after the first period as stated in the particulars". Aldermore's minimum period is "the minimum length of time the Agreement must endure after the Commencement Date before either party may serve notice".
• What a deed of priority or a release costs. None of the three sets a price. Aldermore's published charges pass on legal fees at cost plus a 10% handling fee, with no amount.

So any "typical 3 months" figure you read elsewhere is someone's experience, not a published term. Your own facility letter is the source, and the termination schedule in it is where to look first.

How each contract prices leaving early

The shared structure is simple. Each contract has an earliest date you can end it without a charge, set by the minimum period and the notice period, and they do not set it the same way. Barclays lets notice be served during the minimum period, as long as it expires on or after the end of it (standard term 1.2).

Aldermore's minimum period is the time the agreement must run "before either party may serve notice", so the earliest charge-free end there is the minimum period plus the full notice. Leave before that date and you are short by some number of months and days.

The charge is a monthly figure for each month short. What differs is which of your charges make up the monthly figure, and how a part month is counted.

### Early termination charge definitions in three published UK invoice finance contracts

| Provider | Document | How the charge is worked out | When it applies |
| --- | --- | --- | --- |
| Aldermore | General Conditions of Invoice Finance, Version 3/2020 | Early Termination Payment: for each month or part of a month short, "the monthly average of the aggregate of (a) the Discount Margin and (b) all Service Fees" payable in the previous six months | If Aldermore agrees to let you leave early (condition 16.5), or ends the agreement after a Termination Event (16.2.10) |
| Zodeq | Invoice Finance Conditions (the version on its website) | Final charge: for each month or part left to run, the monthly average of "all discount charges and administration charges earned in the previous six months" or the minimum administration charge, "whichever is greater" | When Zodeq agrees to accept you ending the agreement early, or ends it itself after an event (condition 7.2.7) |
| Barclays | Confidential Invoice Discounting Standard Terms (December 2025 print) | Early Termination Fee: the Service Charge for a look-back period as long as the shortfall, worked out from daily rates. Where both the minimum period and the notice period are short, "the greater of the two" | If Barclays agrees you may leave before the Minimum Period ends or without the Minimum Notice Period (standard term 7.12), or uses its rights after a Termination Event in that time (19.4) |

Source: Aldermore General Conditions of Invoice Finance (Version 3/2020); Zodeq Invoice Finance Conditions; Barclays Confidential Invoice Discounting Standard Terms (https://www.barclayscorporate.com/content/dam/barclayscorporate-com/documents/solutions/corporate-banking-solutions/financing/Confidential-Invoice-Discounting-Standard-Terms.pdf)

Quoted and summarised from each provider's published document. Your own agreement may differ from the standard terms, and its definitions govern.

Three differences matter in practice:

• Discount charges in or out. Barclays counts the service charge only. Aldermore adds the discount margin, the part of your discount charge above Bank Rate, not the whole of it. Zodeq adds all discount charges, so if yours is priced over Bank Rate, the Bank Rate part counts too. On a heavily drawn facility this is the biggest difference.
• Part months. Aldermore and Zodeq charge "each month or part" short, so 3 months and one day costs four months. Barclays works from daily rates, so a part month is charged by the day.
• A floor. Zodeq uses the minimum administration charge if that is higher than your actual average, so a quiet six months before you leave does not reduce the charge below the minimum.

None of this is a right to leave early. Each contract makes early exit something the provider may agree to, on terms that include the charge. If you are in the minimum period, ask for the figure in writing before you sign with a new funder.

Work out all three on your own figures

Enter your facility's figures. Take averages from your last six monthly statements. The calculator applies each contract's rule to the same numbers so you can see how much the wording matters. It runs in your browser and nothing you type is sent anywhere.

Worked example

The facility below is invented to show how the rules behave. It is not any provider's pricing and not a view on what is typical. Bank Rate is the Bank of England's current 4%.

### Worked example: facility figures

| Input | Example figure |
| --- | --- |
| Average funds in use over the last six months | £250,000 |
| Discount margin over Bank Rate | 2.5% a year |
| Bank Rate (Bank of England) | 4% |
| Average monthly service fee | £900 |
| Minimum monthly service or administration charge | £750 |
| Time short of the earliest date the contract allows you to leave | 3 months and 15 days |

Invented figures, except Bank Rate, which is the Bank of England's current rate.

### Worked example: monthly charges the rules draw on

| Charge | How it is worked out | Per month |
| --- | --- | --- |
| Discount margin only | £250,000 x 2.5% / 12 | £520.83 |
| All discount charges | £250,000 x (2.5% + 4%) / 12 | £1,354.17 |
| Service fee | Entered | £900.00 |

### Worked example: early termination charge 3 months and 15 days short, £3,144 to £9,017

| Contract rule | Monthly figure built from | Monthly figure | Months charged | Charge |
| --- | --- | --- | --- | --- |
| Aldermore (General Conditions, Version 3/2020) | Discount margin plus service fees, six-month monthly average | £1,420.83 | 4 | £5,683 |
| Zodeq (Invoice Finance Conditions) | All discount charges plus administration charges, six-month monthly average, or the minimum administration charge if higher | £2,254.17 | 4 | £9,017 |
| Barclays (Confidential Invoice Discounting Standard Terms) | Service charge only, over a look-back period as long as the shortfall | £900.00 | 3.49 | £3,144 |

Source: Market Invoice, applying each published definition to the example figures

Aldermore and Zodeq count the 15 days as a whole month (4 months). Barclays counts them by the day: 3 + 15 x 12 / 365 = 3.49 months. Excludes VAT.

The Zodeq rule comes out highest here because it counts the whole discount charge, Bank Rate part included, on £250,000 of funds in use. The Barclays rule comes out lowest because it counts the service fee only and charges the 15 days by the day. On these three rules that order holds whatever figures you enter, because each counts at least what the one below it counts; what changes is the size of the gap, which grows with funds in use. The Zodeq minimum charge only takes over when your average discount and service charges fall below it. The simpler exit cost calculator multiplies a minimum fee by the months left, which is a fair first estimate, but none of these three contracts actually works that way.

Published charges that apply when you switch

Beyond the early termination charge, a switch involves the old funder releasing its security and the new funder registering its own. These are the only published figures we found for those steps. The funder rows are from each provider's charge schedule, so they apply when that provider is the one doing the work.

### Published fees that can apply when switching invoice finance provider

| Charged by | What for | Published amount | Note | Source |
| --- | --- | --- | --- | --- |
| Companies House | Registering a charge (form MR01), company | £14 online or software, £24 paper | Statutory fee. The new funder normally registers its own charge. | Companies House fees |
| Companies House | Statement of satisfaction or release (MR04) | No fee listed | The fee table lists charge registration but no fee for an MR04. | Companies House fees; MR04 form |
| Companies House | Searching the register, including a company's charges | Free | "You can search the Companies House register for free." | Companies House fees |
| Barclays | Registration of Security at Companies House | Minimum £175 plus VAT | The funder's own charge for doing it, on top of the statutory fee. | Barclays CID Pricing Schedule |
| Barclays | Registration of Agreement in Register of Assignments of Book Debts | Minimum £150 plus VAT | Charged when Barclays is the new funder. | Barclays CID Pricing Schedule |
| Barclays | Letters to the customer's advisers, e.g. solicitors and other third parties | Minimum £25 plus VAT | Can apply to letters sent during a switch. | Barclays CID Pricing Schedule |
| Barclays | Same day payments (including CHAPS) | £15, not subject to VAT | Per payment. | Barclays CID Pricing Schedule |
| Aldermore | Legal fee recharge (execution or variation of the Agreement, any Security or other facility document) | Legal costs incurred by Aldermore, plus a 10% handling fee | The published basis for passing on legal work such as a deed of priority. No amount is set. | Aldermore General Conditions |
| Aldermore | External information enquiry fee (information about your facility to third parties, with your approval) | Between £25 and £100 | Depends on the nature of the request. | Aldermore General Conditions |
| Aldermore | CHAPS fee | £30 per payment | For a same day payment. | Aldermore General Conditions |

Source: Companies House fees (GOV.UK); Barclays CID Standard Terms Pricing Schedule; Aldermore General Conditions of Invoice Finance (https://www.gov.uk/government/publications/companies-house-fees/companies-house-fees)

Amounts as published. Funder charges apply under that funder's own agreement and your facility letter can vary them.

The fixed legal points in a switch

• 21 days to register the new charge. Under section 859A of the Companies Act 2006, the period for delivering a charge to Companies House is "21 days beginning with the day after the date of creation of the charge". The new funder will want this done, so it usually handles the filing.
• The old charge is cleared by a statement of satisfaction. Section 859L covers the statement that the debt has been paid or the property released, delivered on form MR04. Agree in writing who will file it and by when, then check the debenture release shows on the company's charges register, which is free to search.
• Funds in use are repaid, not charged. Barclays' terms require all your obligations to be paid on termination, and Aldermore's early termination terms include payment of all your obligations alongside the charge. In a switch that balance is usually settled from the new facility on the changeover date. It is money you owe, not a fee, so it is left out of the charges above.

What to ask for before you commit to a switch date

1. The exact end date of your minimum period and the notice length, from your facility letter.
2. If you are short, the provider's written agreement to early termination and its early termination figure, worked out under your contract's definition. Check it against the calculator above.
3. A written estimate of legal costs for any deed of priority or release from both funders, and who pays them.
4. The new funder's own charges for registering security, from its facility letter or charge schedule.
5. Who files the MR04, and by when.

For the full sequence of a switch, see how to switch invoice finance provider and the switching and exit checklist. If a deed of priority is involved, how to read a deed of priority explains what you are signing. To test whether the move is worth it at all, try the switching feasibility checker. Provider profiles: Aldermore, Barclays, Zodeq.

Limits of this page

Three published contracts are not a market survey. Most providers do not publish their terms, and a provider can agree different terms with you than its standard set. Aldermore's document is its 2020 version, still hosted on its website. The calculator does not add VAT, interest on funds in use after termination, or charges a provider can add when it ends the agreement itself after a termination event, such as the additional service charge of 5% of the outstanding balance of the payment account in Barclays' terms. Your own agreement's wording is the one that counts.