What Is Dilution in Invoice Finance?
Dilution is when the actual amount collected is less than the invoice value, due to credit notes, returns, disputes, or early payment discounts. High dilution reduces your advance rate. Providers monitor dilution rates and may adjust terms if yours exceeds 5-10%.
OM
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