Can I Factor Invoices With 30, 60, or 90 Day Payment Terms?
Yes. Standard invoice finance works with any B2B credit terms up to 120 days. Longer terms (150+ days) may need specialist providers or higher fees because the provider's capital is locked up longer. If your customers pay on 120+ day terms, negotiate a lower advance rate rather than paying a higher discount charge.
What this means for your business
Invoice finance in the UK is designed to work with standard business-to-business payment terms, whether your customers pay within 30, 60, or 90 days. When you raise an invoice, the finance provider advances you a percentage of its face value, typically between 70 and 90 percent, so you do not have to wait for your customer to pay.
The remaining balance, minus fees, is released once the invoice is settled. This means your cash flow is no longer tied to the length of your customers' payment terms, which is particularly useful for small and medium-sized businesses that invoice larger companies or public sector bodies, where longer terms are common.
Most mainstream UK invoice finance facilities support terms of up to 120 days without requiring any special arrangement.
Key points
- Standard invoice finance facilities in the UK typically accommodate payment terms of up to 120 days without additional conditions.
- Invoices with terms of 150 days or more may require a specialist provider or attract higher fees, as the lender's capital is tied up for longer.
- The advance rate, which is the percentage of the invoice value paid upfront, can be negotiated downward to offset the cost of financing longer-term invoices.
- Invoice finance is available for B2B invoices only, meaning the arrangement must be between your business and another registered business rather than a consumer.
- If your sector commonly uses extended payment terms, such as construction or public sector supply, it is worth confirming maximum term limits with any provider before signing a facility agreement.
Common pitfalls
A common mistake is assuming all providers treat 60-day and 90-day terms identically, when in practice fees such as the discount charge accrue daily, meaning longer terms cost more overall. Some businesses also overlook the fact that if a customer pays late beyond the agreed term, the invoice may be classed as overdue and trigger a concentration limit or require repayment of the advance.
For very long terms of 120 days or more, accepting a lower advance rate is often more cost-effective than paying a higher discount charge over the full period. Always read the facility agreement carefully to understand how extended or disputed invoices are handled.
Related questions
Does the length of my customers' payment terms affect how much I can borrow against an invoice?
The advance rate offered by a provider may be adjusted to reflect longer payment terms, as the lender carries the risk for a greater period. For invoices with terms beyond 90 days, some providers will offer a slightly lower percentage upfront to manage their exposure. It is worth discussing this directly with your provider before agreeing a facility.
Can I use invoice finance if some customers pay on 30-day terms and others pay on 90-day terms?
Yes, most UK invoice finance facilities can accommodate a mix of payment terms across your debtor book. The provider will assess each invoice or customer account individually, and your overall facility limit will reflect the combined value of eligible invoices. You should confirm with your provider whether there is a single maximum term that applies across all invoices or whether terms are assessed per customer.
What happens if my customer does not pay within the agreed payment terms?
If a customer pays late, the invoice may fall outside the terms of your facility and the provider may require you to repay the advance. Under a non-recourse or bad debt protection arrangement, the provider may cover approved bad debts, but late payment alone is usually handled differently from insolvency. It is important to understand your facility's rules on overdue invoices before you draw down against any invoice.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
Last reviewed: 31 May 2026