Will my customers know I use invoice finance?
It depends on whether your facility is disclosed or undisclosed. With disclosed invoice finance, your customers are told: your invoices say the debt has been passed to a lender, and customers pay the lender. Most factoring works this way. With undisclosed (confidential) invoice finance, your customers are not told and keep paying what looks like your normal account. Most invoice discounting works this way.
What your customers see
| Disclosed | Undisclosed (confidential) | |
|---|---|---|
| On the invoice | A note saying the debt has been passed to the lender (a notice of assignment), with the lender's bank details | Your own invoice, as normal |
| Who they pay | The lender | An account in your company name (see trust account) |
| Who chases late payment | Usually the lender | You (or, with confidential factoring, the lender in your name) |
| Who they speak to about the bill | The lender, and you | You |
What can still give it away
- Companies House. Invoice finance lenders often register a charge (a legal claim over your business's assets) at Companies House. Anyone who looks up your company can see it, whichever type of facility you have.
- The lender switching you to disclosed. Ask in what circumstances an undisclosed facility can be turned into a disclosed one, and whether you get warning first.
- A change of bank details. Moving to or from a disclosed facility means asking customers to pay a different account.
If you want confidentiality but need help chasing
Some lenders offer confidential factoring. The lender chases your customers, but in your company's name, so they don't know a lender is involved. Skipton Business Finance is one lender that describes this product on its website.
Which one to choose
Disclosed suits you if you have no one to chase payments and you don't mind customers dealing with a lender. It is often easier to get for smaller businesses.
Undisclosed suits you if you already chase payments well and want customers to deal only with you. Some lenders publish a minimum turnover for it:
| Lender | Published minimum turnover | Paid up front | Source |
|---|---|---|---|
| Skipton Business Finance | None published (confidential discounting) | Up to 90% | skiptonbusinessfinance.co.uk |
| NatWest Invoice Finance | £300k (discounting) | Up to 90% | natwest.com |
| Close Brothers Invoice Finance | £750k (discounting) | Up to 90% | closeinvoice.co.uk |
| HSBC Invoice Finance | £1m (discounting) | Up to 95% | business.hsbc.uk |
Figures as published on each lender's own website (each check is dated in our Rate Index). None of these lenders publishes its fees.
For how undisclosed facilities work, what they cost and what to check in the agreement, see confidential invoice discounting. For costs side by side, see factoring vs invoice discounting.
Common questions
Can I switch from disclosed to undisclosed later?
Often, yes, once your turnover and credit control meet the lender's requirements for an undisclosed facility. Your customers would then be asked to pay your own account again. Not every lender offers both, so you may need to move lender.
Is undisclosed invoice finance harder to get?
Usually. The lender relies on you to collect the money, so it wants to see that you chase payments well. Some lenders also ask for a higher turnover (see the lender table).
Is single-invoice finance disclosed or undisclosed?
It varies by lender. Ask before you sign up whether your customer will be told. See selective invoice finance for how single-invoice funding works.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam was managing director of Penny, a UK invoice finance business, from July 2020 to November 2023. His career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library. Career record.
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