Does UK Business Loans provide non‑recourse (credit‑protected) invoice financing?

Short answer: UK Business Loans does not lend money directly. We introduce businesses to lenders and brokers — and many of those partners can arrange invoice finance that includes non‑recourse (credit‑protected) options where the buyer credit risk is transferred to the funder or an insurer. To see whether you can access this type of facility, start a free eligibility check and get matched to the right providers.

Get a Free Eligibility Check: Get Quote Now

Summary — quick overview

If you’re short of working capital because your customers take 30–120 days to pay, invoice finance can unlock that cash. Non‑recourse invoice finance (also called credit‑protected invoice finance) shifts the insolvency or credit default risk of your buyer to the funder or an insurer. That protection is attractive but typically costs more and has eligibility rules — strong debtor credit, low concentration, and minimum facility sizes are common requirements.

UK Business Loans is an introducer: we match companies seeking finance (from about £10,000 upwards) to lenders and brokers who can offer recourse or non‑recourse invoice finance. If you want to explore credit‑protected options, Get a Free Eligibility Check and we’ll connect you to the right specialists quickly.

What is non‑recourse (credit‑protected) invoice finance?

Non‑recourse invoice finance means that, subject to the facility’s terms, the funder or the insurer takes on the risk that a buyer (debtor) will not pay because they become insolvent or default. In everyday terms: if a credit‑worthy customer goes bust and cannot pay an invoice, a non‑recourse agreement protects your business from having to repay the advance the funder provided against that invoice.

Important clarifications:

• “Non‑recourse” usually covers buyer insolvency and credit default, not every unpaid invoice. Disputes, contract performance issues, short‑paid amounts and fraud are commonly excluded.
• Full non‑recourse is less common; many funders offer limited non‑recourse (e.g. insolvency only) or partial protection via credit insurance.
• Non‑recourse can be delivered either by the funder’s own underwriting or by combining invoice finance with third‑party credit insurance.

How non‑recourse is typically structured

There are two main models you’ll see in the UK market:

1. Funder-led non‑recourse — the invoice finance provider underwrites debtor credit themselves and accepts limited non‑recourse exposure on approved buyers.
2. Credit insurance + invoice finance — an insurer covers buyer default, and the funder advances against insured invoices. This is the most common way to achieve broad credit protection, but it involves insurance costs and claims processes.

Example (simplified): you invoice a buyer for £50,000. Under an invoice finance facility a funder might advance 80% (£40,000). If the buyer becomes insolvent and non‑recourse applies, the funder/insurer absorbs the unpaid amount and you are not required to repay the advance (subject to exclusions). Under recourse, you would be asked to repay the £40,000 advance to the funder.

Recourse vs non‑recourse — key differences

Feature	Recourse	Non‑recourse (credit‑protected)
Who bears buyer default risk	Your business	Funder or insurer (subject to policy terms)
Cost	Lower	Higher (fees and/or insurance premiums)
Eligibility	Wider; smaller invoices possible	Stricter: strong buyer credit, lower concentration, larger facility sizes
Disputes & fraud	Funder may return unpaid amounts to you	Often excluded from cover
Confidentiality	Invoice discounting can be confidential	Factoring or insured discounting often requires disclosure

Bottom line: non‑recourse reduces credit exposure but comes at a cost and with conditions. Many growing businesses choose a hybrid approach — recourse for routine cashflow and credit insurance for large or risky buyers.

Does UK Business Loans provide non‑recourse invoice finance?

Short, transparent answer: no — we do not supply finance ourselves. UK Business Loans is a lead introducer: when you complete a brief enquiry we match your business to lenders and brokers in our network who specialise in invoice finance. Some of those partners offer non‑recourse or credit‑insured invoice finance; others offer recourse solutions. We will help identify which partners can structure the credit‑protected solution that fits your situation.

How the match works: you complete a short form describing your turnover, typical invoice size and target funding amount (we work with enquiries from about £10,000 upwards). We then connect you with one or more lenders/brokers who can advise on recourse vs non‑recourse options and provide quotes. There’s no obligation — the enquiry does not itself constitute an application.

Get a Free Eligibility Check and we’ll match you to specialists who can discuss non‑recourse structures for your business.

Learn more about invoice finance options on our detailed page about invoice finance.

When is non‑recourse invoice finance available in the UK?

Non‑recourse facilities are available, but availability depends on several common criteria:

• Debtor quality: buyers must typically have strong credit or tangible insurer appetite (blue‑chip or well‑rated customers).
• Invoice concentration: funders worry about high exposure to a single buyer; lower concentration improves chances.
• Facility size: many funders prefer larger portfolios (often £50k+ invoice totals) to justify underwriting and insurance costs.
• Sector and territory: certain sectors or foreign buyers may be harder to insure or fund.
• Clean ledger: a history of few disputes and prompt collections helps secure non‑recourse cover.

Some funders offer limited non‑recourse (insolvency only) while full cover normally requires third‑party credit insurance. If your buyer base meets these criteria, you’re more likely to be offered credit‑protected options.

Costs, exclusions & what to watch for

Costs vary by provider and structure. Typical components include:

• Advance rate: percentage of invoice value advanced (e.g. 70–90%).
• Discount/interest: ongoing finance charge on the drawn amount.
• Service/management fees: admin, ledger management and collection fees for factoring.
• Insurance premium: if credit insurance is used, this is an extra cost depending on buyer risk.
• Set up / due diligence fees: underwriting or insurer assessment fees may apply.

Expect non‑recourse solutions to carry higher effective costs than basic recourse discounting or factoring. Equally important are exclusions: disputes, short‑paid invoices, related‑party sales, pre‑existing arrears and fraud are commonly not covered. Always ask for the full terms and real claim examples where possible.

Who benefits most from non‑recourse invoice finance?

Non‑recourse is most useful for companies that:

• Sell to large, creditworthy organisations but face lengthy payment terms.
• Need predictable cashflow and protection from buyer insolvency.
• Bid for contracts or tenders where financial strength and protected working capital are advantageous.

For businesses with small invoice pools, high concentration to one buyer, or tight cost sensitivity, a recourse facility may be more appropriate.

How UK Business Loans helps you find non‑recourse options

1. Complete a short enquiry (takes a few minutes) — no obligation, no credit-search at this stage.
2. We match your details to lenders and brokers experienced in invoice finance and credit insurance.
3. Selected partners contact you with initial terms, eligibility guidance and any insurer requirements.
4. Compare offers and choose the best fit — partners handle underwriting, insurance placement and funding.

We work to speed up market access and reduce the admin involved in sourcing credit‑protected facilities. Start now: Get a Free Eligibility Check.

Frequently asked questions

Does non‑recourse cover disputes or complaints about work?

Usually not. Most non‑recourse / credit insurance covers buyer insolvency and credit default. Disputes over quality, short payments or contractual arguments are typically excluded — these remain the supplier’s responsibility unless specifically insured.

Can a new or young company get non‑recourse invoice finance?

It’s more challenging. Underwriting focuses on the buyer’s credit rather than the supplier’s age, so if your customers have excellent credit and your invoice profile is clean, you may qualify. Insurance-based structures can sometimes help bridge limited supplier track record.

Will enquiring through UK Business Loans affect my credit score?

No — submitting an enquiry does not affect your business credit score. Partner lenders or brokers may carry out checks later in the application process if you choose to proceed.

How quickly can I get funded?

Timescales vary. Simple recourse discounting can be set up in days; non‑recourse or insured facilities often take longer due to insurer underwriting — typically several days to a few weeks depending on complexity.

Ready to explore your options? Get Quote Now — we’ll connect you with lenders and brokers who can discuss credit‑protected invoice finance for your business.

Final notes & disclaimer

UK Business Loans is an introducer and does not provide loans or financial advice. We connect businesses to lenders and brokers who make their own credit decisions and provide detailed terms. All offers should be read carefully. By submitting an enquiry you agree to be contacted by selected finance partners; we do not carry out credit searches at the enquiry stage.

If you want to understand invoice finance options in more depth before enquiring, check our wider article on invoice finance or start a free eligibility check now: Get a Free Eligibility Check.

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1) Q: Is UK Business Loans a lender?
A: No — UK Business Loans is a free introducer that matches UK businesses with trusted lenders and brokers rather than lending money directly.

2) Q: How does UK Business Loans work to find a business loan?
A: Complete a short online enquiry and we’ll match your business to relevant, FCA‑regulated lenders and brokers who will contact you with suitable finance options.

3) Q: Will submitting an enquiry affect my business credit score?
A: No — submitting an enquiry via UK Business Loans does not affect your credit score, although partner lenders may carry out checks later if you proceed.

4) Q: Can I get non‑recourse (credit‑protected) invoice finance through UK Business Loans?
A: UK Business Loans doesn’t provide finance itself but can connect you to lenders and brokers who offer non‑recourse or credit‑insured invoice finance where available.

5) Q: What loan amounts can I apply for through UK Business Loans?
A: Our network handles a wide range — typically from around £10,000 up to multi‑million pound facilities depending on the lender and product.

6) Q: How quickly can I expect a response and funding?
A: Partners often respond within hours to your enquiry, with simple recourse facilities set up in days and non‑recourse/insured deals usually taking several days to a few weeks.

7) Q: What types of business finance does UK Business Loans connect me with?
A: We connect you to lenders for business loans, invoice finance (recourse and non‑recourse), asset and equipment finance, commercial property finance, cashflow loans and more.

8) Q: What do lenders look for when approving non‑recourse invoice finance?
A: Eligibility typically depends on strong debtor credit, low invoice concentration, sufficient portfolio size, a clean ledger and sector/territory considerations.

9) Q: Are non‑recourse invoice finance costs higher than recourse finance?
A: Yes — non‑recourse usually carries higher fees and/or insurance premiums and specific exclusions compared with cheaper recourse discounting.

10) Q: Is using UK Business Loans free and are your partners regulated?
A: Yes — the service is free and we only work with reputable, FCA‑regulated brokers and lenders within our network.