Quick answer

Notice periods depend on your facility agreement and the type of product. Most invoice finance agreements ask for written notice of between 30 and 90 days, though committed or funded facilities can require 90–180 days or a full minimum term. Lenders can also end a facility immediately for cause (for example fraud or insolvency). Check the Termination, Default and Fees sections of your agreement and get a free eligibility check to confirm the exact period and likely exit costs.

Why notice periods matter when ending invoice finance

Notice periods exist because invoice finance is more than a simple loan — the funder has ongoing rights over your unpaid invoices, collection processes and often security (charges over company assets). A correct notice period gives both parties time to:

• complete a run‑off of outstanding invoices and debtor collections;
• arrange release of security and removal of charges;
• avoid surprise break fees or crystallised liabilities; and
• manage customer communications to protect trading relationships.

Consequences of not serving correct notice: early termination fees, continuing interest and commission charges, unexpected legal costs to release security, and possible damage to debtor relationships.

Typical notice periods — what to expect

Standard market ranges

Although every facility differs, market practice usually falls into these bands:

• Short form / spot facilities: often 30 days or immediate (subject to final settlement).
• Most commercial facilities: typically 30–90 days written notice to allow a run‑off of transactions.
• Committed or funded lines: sometimes 90–180 days or a specified minimum term (eg 12 months) with no early exit without fee.

Terminology to watch for: “30 days’ written notice”, “termination on the next anniversary”, “minimum term” and “run‑off period”. Note the difference between a notice period (how long after you tell the funder you’re leaving) and a minimum contractual term (the period during which you cannot exit without a break fee).

How notice differs by product

• Factoring (disclosed): usually 30–90 days to allow transfer of collections and debtor notification.
• Invoice discounting (confidential): often 30–90 days, but lenders may insist on a quiet run‑off to avoid alerting debtors — timelines can be longer for complex arrangements.
• Spot/ad‑hoc lines: may finish quickly but still require settlement of advances and fees.

Tip: Always check the Termination, Default and Fees sections of your facility agreement and confirm next steps with your relationship manager in writing.

Why some lenders require longer notice (and examples)

Some funders ask for longer notice because their funding and risk models assume a longer lifecycle for invoice payment or because they hold committed capital against your book. Common reasons include:

• committed funding lines that need time to be returned or replaced;
• administrative run‑off to collect older invoices (eg businesses with 60–120 day debtor cycles);
• need to reassign or novate contracts and update legal charges;
• AML or KYC handover checks on debtor files before release.

Example: a funder dealing with large national customers may insist on a 90–180 day run‑off to ensure slow‑paying invoices are collected before the facility closes.

Termination for convenience vs termination for cause (breach)

Termination for convenience: you or the lender end the facility in line with the agreed notice. This normally requires written notice, settlement of outstanding advances, and payment of any exit/admin fees.

Termination for cause: lenders typically reserve the right to terminate immediately if a borrower breaches the agreement (eg insolvency, fraud, missed covenants). Immediate termination does not remove the borrower’s liability for advances, interest, commissions and associated closing costs.

Practical takeaway: avoid breaches by keeping covenants up to date, keeping accurate debtor records, and notifying your lender promptly about material changes to the business.

Typical exit costs and admin when you terminate

Below are common items you can expect when closing a facility. Costs vary widely, so treat these as examples not quotes.

• Outstanding advances: repayment of drawn funds.
• Interest and commission: accrues until the termination date or end of run‑off.
• Administration/winding‑up fee: fixed exit/admin charge (often a flat fee or %).
• Legal fees: to remove charges and release security (Companies House filings, solicitors’ fees).
• Break fees: if you exit before a minimum term.
• Invoice collection costs: if the lender needs to pursue debtors after you leave.

Simple example breakdown: Outstanding advances + interest to termination date + admin fee (eg 0.5–1.5%) + charge release legal fee. For an accurate figure, request a written final balance from your lender or ask us to arrange broker assistance.

Get an accurate estimate — Get Quote Now — Free Eligibility Check. Our partners can provide precise closing cost estimates once they review your facility agreement.

Practical step-by-step checklist to close an invoice finance facility

1. Locate your facility agreement: read Termination, Default, Fees, Charges and Minimum Term clauses.
2. Contact your relationship manager: confirm required notice, proposed run‑off dates and likely final balance.
3. Request a written final statement: ask for a breakdown of advances, interest, commission and admin fees.
4. Agree run‑off and collections approach: who collects debtors during run‑off? Will customers be notified?
5. Arrange funds: ensure you can repay the outstanding balance on the agreed date.
6. Obtain release of security: confirm steps and expected timeline for charge removal.
7. Get closure confirmation in writing: receipts, indemnities and confirmation that no further liabilities will arise beyond agreed items.
8. Update internal records: debtor ledger, accounting software and internal teams.

Most businesses forget to ask for a formal release of any director guarantees or to check whether the lender will continue to charge commissions during the run‑off — make these explicit in writing.

Get Started — Free Eligibility Check (no obligation, takes 2 minutes). We’ll match you with lenders and brokers who can confirm exact notice periods and exit costs.

Common questions clients ask

Can a lender end my facility immediately?

Yes — if you’ve breached the agreement (insolvency, fraud, serious covenant breach). Immediate termination means the lender can demand repayment and start recovery actions; you will still be liable for balances and close‑out costs.

Can I terminate immediately if I find a better deal?

Only if your agreement allows immediate termination. Many facilities have a minimum term or break fee; check your contract and negotiate an exit plan with your lender or get broker help to reduce costs.

How is the final balance calculated?

Typically: outstanding advances + accrued interest and commissions to termination + any agreed admin/exit fees + legal/charge release costs. Request a formal final balance in writing.

Will ending the facility affect my customers?

With confidential invoice discounting, lenders usually avoid debtor notification during run‑off. With disclosed factoring, debtors are typically notified. Confirm the lender’s approach before you serve notice.

Do I need to reassign invoices back to my business?

The lender will outline the documentation required for handover and any novation or assignment steps. Ensure all legal paperwork is complete before final settlement.

How UK Business Loans helps

UK Business Loans is an introducer that connects UK limited companies with lenders and brokers who specialise in invoice finance and other business funding. We do not lend money. Our service is free and designed to help you:

• understand the notice and likely exit costs for your specific facility;
• receive multiple, competitive options from brokers and funders;
• get assistance negotiating exit terms and managing legal/admin processes.

Important: UK Business Loans is an introducer (not a lender). Completing our enquiry is free and does not commit you to borrow. For an exact notice period and closure costs, complete a quick enquiry below and we’ll match you to partners who will review your facility agreement.

Free Eligibility Check — Get Quote Now

How to choose the best route — keep, replace, refinance or close?

Use this quick decision guide:

• Keep: your current facility remains the cheapest and least disruptive.
• Replace/refinance: you can secure better fees/terms; plan the exit to avoid double costs and ensure new funding is in place.
• Close: you no longer need the facility or move to other finance (loan/overdraft). Factor in exit fees and debtor handover.

Not sure which is best? Get a Free Eligibility Check and impartial introductions from experienced brokers.

Ready to check your exact notice period?

Notice periods vary by lender and product. The only reliable way to know your exact exit timeline and costs is to have your facility agreement reviewed by a specialist broker or lender.

Get Quote Now — Free Eligibility Check (No obligation. Takes under 2 minutes.)

Information on this page is for guidance only. UK Business Loans is an introducer and not a lender. Completing the enquiry form is free and will not affect your credit score.