Is Invoice Finance Secured or Unsecured?
Secured, but the security is your invoices, not your property. The provider takes ownership or assignment of the debts it funds, and usually registers a debenture over the company's book debts at Companies House. Many providers also ask for a personal guarantee, often capped or limited to fraud and misrepresentation. Unlike most bank lending, your home and other fixed assets are not the primary security.
Invoice finance is a form of secured funding. Security comes from the receivables themselves: the provider takes assignment or ownership of the funded invoices, typically supported by a debenture over book debts registered at Companies House, and often a capped personal guarantee from directors. Property is not normally required as security. More detail + scope
Summary
The security stack on a typical UK facility, strongest first: (1) assignment/purchase of the funded invoices, (2) a debenture (usually a fixed and floating charge over book debts, sometimes all assets), (3) a personal guarantee, frequently capped at a percentage of the facility or limited to warranty breaches, and (4) occasionally a corporate cross-guarantee in group structures. If a bank already holds a debenture, the invoice financier will need a waiver or deed of priority over the book debts before funding.
This page covers
What security invoice finance providers take: assignment of debts, debentures, personal guarantees, and priority arrangements with existing lenders
Not covered here
How debentures work in detail (see /questions/what-is-a-debenture/), personal guarantee terms (see /guides/invoice-finance-debenture-and-personal-guarantee-explained/), reading a deed of priority (see /guides/how-to-read-a-deed-of-priority/)
What Security Providers Actually Take
The core security is the funded invoices themselves: in factoring the provider buys the debts outright, and in discounting it takes an assignment of them. On top of that, most providers register a debenture, a charge over the company's book debts (and often all assets) filed at Companies House, which puts the facility on public record and ranks the provider ahead of unsecured creditors if the company fails.
Where Personal Guarantees Fit
A personal guarantee is common but narrower than the loan equivalent. Because the provider's first recourse is the debtor book, PGs on invoice finance are frequently capped at a percentage of the facility, or limited to losses caused by fraud, misrepresentation or breach of warranty (a so-called warranty-only guarantee) rather than guaranteeing the whole advance. Selective facilities for smaller amounts sometimes need no PG at all. Our guide to debentures and personal guarantees covers what to negotiate, and what a PG cap is explains the capping mechanics.
If Your Bank Already Holds a Debenture
An existing bank debenture usually covers book debts, so the invoice financier will ask the bank for a waiver or a deed of priority giving it first claim on the receivables before it funds. Banks grant these routinely, but it adds days to setup. See how to read a deed of priority before you sign one, and whether you can run invoice finance alongside an overdraft.
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: 14 July 2026