Can start‑ups obtain invoice financing? Invoice finance for start‑ups — UK Business Loans

Short answer: Often yes — but approval depends on the quality and creditworthiness of your customers, confirmed contracts, and the lender’s appetite for early‑stage businesses. UK Business Loans introduces start‑ups to specialist lenders and brokers who assess eligibility and can often provide a rapid, no‑obligation quote. Get a free eligibility check.

Quick snapshot: Can my start‑up get invoice finance?

• Yes — if your invoices are to creditworthy, established customers or backed by firm contracts.
• Maybe — if you have limited trading history but strong customer relationships, purchase orders or supplier agreements.
• Not usually — where sales are to high‑risk customers, invoices are disputed or the business has no verifiable customer base.

What is invoice finance?

Invoice finance unlocks cash tied up in unpaid invoices. Instead of waiting 30–120 days for customers to pay, a funder advances a percentage of the invoice value and collects the remainder (minus fees) when the invoice is paid.

Common forms:

• Invoice factoring — the funder manages collections and advances funds against your invoices.
• Invoice discounting — a confidential facility where you retain control of collections while borrowing against invoices.
• Spot/selected invoice finance — one‑off or selective advances on individual invoices.

Learn more about invoice finance and product options on our dedicated invoice finance page: invoice finance.

Types of invoice finance — quick comparison

Product	How it works	Who it suits
Factoring	Funder collects payments; advances up to 90%	Businesses wanting outsourced credit control
Discounting	Confidential advance; you collect payments	Businesses that want to hide funding from customers
Spot factoring	Single invoice advance	Start‑ups testing the product or needing one‑off cash

Can start‑ups obtain invoice financing?

This is the core question. Many start‑ups can obtain invoice finance — but it is less about the age of the business and more about the invoices and customers. Lenders focus on the risk of the invoice being paid.

Key points:

• Start‑ups often face challenges because they may lack long trading history or audited accounts.
• Lenders place greater emphasis on the creditworthiness and payment behaviour of your customers (debtors).
• If your invoices are to established businesses, large organisations or government bodies, funders are far more likely to advance funds even if you’ve traded a short time.

Typical lender checklist for start‑ups:

• Invoices or contracts for work done (or firm purchase orders).
• Customers with strong credit profiles or a history of timely payments.
• Evidence of delivery or completion (signed delivery notes, milestone certificates).
• Basic company registration and director ID; bank statements showing payment flows.
• Minimum facility size — many funders prefer facilities from around £10,000 upwards.

Who will lend to start‑ups?

Start‑ups are most likely to be funded by:

• Specialist invoice finance companies that assess debtor risk rather than business age.
• Alternative funders and challenger banks with flexible underwriting for early‑stage firms.
• Brokers with access to niche panels — they can shop your case to multiple funders quickly.

Some lenders expect 6–12 months trading; others will consider new businesses if the invoices are strong and backed by reputable customers. Director guarantees may be requested in certain cases.

How UK Business Loans helps start‑ups access invoice finance

We don’t lend. We match your start‑up with lenders and brokers who specialise in invoice finance for newer businesses. Our process is simple:

1. Complete a short enquiry (company name, turnover band, funding needed, contact details) — it takes about 2 minutes.
2. We match you to the most suitable partners in our panel who understand start‑ups and debtor‑backed funding.
3. Selected brokers/lenders contact you with a no‑obligation quote or request for further documents — often within a few hours to one working day.

Because we introduce you to multiple partners, you save time and increase the chance of a competitive offer. Get Quote Now.

Documents & information lenders typically request

• Copies of recent invoices or contract schedules.
• Purchase orders or signed contracts confirming the work/supply.
• Bank statements (usually 3–6 months).
• Company registration documents and ID for directors.
• Management accounts, VAT returns (if applicable) and debtor ageing reports.
• Customer references or credit checks for key debtors.

Typical pricing & terms for start‑ups (indicative)

Costs vary by lender and sector; the ranges below are for guidance only:

• Advance rates: typically 70–90% of invoice value (lower for higher risk debtors).
• Discount/finance charge: broadly 0.5–2.5% per month on the advanced amount (equivalent APRs can be high over long periods).
• Setup/admin fees: one‑off fees of a few hundred to a few thousand pounds depending on facility size.
• Additional charges: credit control fees, reserves (retentions) and exit or termination fees may apply.

All terms are subject to lender assessment. Use quotes from multiple providers to compare the true cost.

Pros & cons of invoice finance for start‑ups

Alternatives if you can’t get invoice finance yet

If invoice finance isn’t available immediately, consider:

• Short‑term business loans or bridging finance.
• Merchant cash advances (where appropriate).
• Trade or supplier finance (supply chain finance).
• Negotiating earlier payments or staged payments with customers.

Not ready for invoice finance? Get matched to lenders offering alternative start‑up funding.

How start‑ups can improve their chances

• Invoice only creditworthy customers and get written contracts or purchase orders.
• Reduce debtor days by tightening payment terms and chasing late payers.
• Provide management accounts, clear bank statements and debtor ageing schedules.
• Use a broker — they can present your case in the best light to specialist funders.

Real‑world example (anonymised)

A start‑up digital agency with six months’ trading and invoices to well‑known retailers secured a spot factoring arrangement. The provider advanced 80% of invoice value and released the balance on payment less fees. Funds were available within 48 hours of documentation — enabling the agency to hire staff and take on more clients.

Frequently asked questions

Will applying through UK Business Loans affect my credit score?

No — submitting an enquiry is a soft, no‑obligation step and does not affect your credit file. Lenders may perform formal checks only once you proceed.

How fast will I receive funds?

Timings vary. For well‑prepared cases, funds can be released within 24–72 hours after approval. Complex cases take longer.

Will lenders contact my customers?

It depends on the product. Factoring usually involves lender contact for collections; confidential discounting lets you keep customer communications private. Check with the lender or broker.

What minimum invoice value or facility size do you work with?

We commonly arrange facilities from around £10,000 and upwards, depending on the lender’s rules and the sector involved.

Final summary & next steps

Start‑ups can obtain invoice finance if the underlying invoices and customers present acceptable credit risk. The key factors are who owes you money, the strength of contracts and the quality of documentation. UK Business Loans connects start‑ups with lenders and brokers who specialise in debtor‑backed funding — helping you compare options quickly.

Get a free eligibility check — takes just 2 minutes. We match you with lenders or brokers who can provide a no‑obligation quote.

Compliance & disclaimers

UK Business Loans is an introducer that connects businesses with lenders and brokers. We are not a lender and do not provide regulated financial advice. All finance is subject to lender eligibility, terms and conditions. Submitting an enquiry does not affect your credit score. For full details see our Privacy Policy and Terms & Conditions.

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• Hero image: alt=”Invoice finance for start‑ups UK – business owner reviewing invoices”
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1) Can start-ups obtain invoice finance? — Often yes: many funders will advance against invoices to creditworthy or well‑contracted customers even if your business is new.
2) How quickly can start‑ups access funds with invoice finance? — For well‑prepared cases funds can be released within 24–72 hours of approval, though complex cases take longer.
3) Will submitting an enquiry through UK Business Loans affect my credit score? — No — the enquiry is a soft, no‑obligation introduction and only formal lender applications may trigger credit checks.
4) What minimum funding amounts do you arrange for invoice finance? — We commonly arrange facilities from around £10,000 upwards, subject to lender criteria and sector.
5) What’s the difference between invoice factoring and invoice discounting? — Factoring normally involves the funder managing collections and contacting customers, while discounting is confidential and lets you retain credit control.
6) What documents do lenders typically request for invoice finance in the UK? — Lenders usually want invoices or contracts/purchase orders, 3–6 months of bank statements, company registration and director ID, management accounts or VAT returns and debtor ageing reports.
7) How much of an invoice can I borrow against? — Advance rates typically range from about 70–90% of the invoice value, depending on debtor risk.
8) How much does invoice finance cost for start‑ups? — Indicative costs are broadly 0.5–2.5% per month on the advanced amount plus setup, admin and possible credit control or reserve fees, varying by lender and sector.
9) How does UK Business Loans help start‑ups find invoice finance? — We match your short enquiry to specialist brokers and lenders who assess eligibility and provide no‑obligation quotes, speeding up the search for suitable funding.
10) What are alternatives if I can’t get invoice finance yet? — Consider short‑term business loans, merchant cash advances, trade/supplier finance or negotiating earlier/staged payments with customers.