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Invoice financing isn’t a single product. It’s a group of funding options that all do the same thing at their core, unlocking your cash tied up in unpaid invoices, but all with different levels of control, visibility and support.
Here’s how the main options broken down.
1. Invoice Factoring
Funding plus outsourced credit control
Invoice factoring involves selling your invoices to a finance provider. You receive an advance against the invoice value, and the provider takes responsibility for collecting payment from your customer.
- Advance typically up to 80–95%
- The funder manages collections and debtor follow-ups
- Customers are usually aware of the arrangement
- Often includes credit control support
Best suited to businesses that want hands-off cash flow management or don’t have internal credit control resources.
2. Confidential Invoice Discounting
Funding with full control
With invoice discounting, you still access cash against unpaid invoices, but you remain in control of customer relationships and collections. The arrangement is typically confidential.
- Advance against approved invoices
- You chase and receive customer payments
- Customers usually don’t know funding is in place
- Greater control and flexibility
Commonly used by established businesses with strong internal processes.
3. Selective Invoice Finance
Fund only what you need
Selective invoice finance allows you to fund individual invoices, rather than your entire sales ledger.
- No obligation to fund every invoice
- Useful for managing short-term cash gaps
- Often used for large or irregular invoices
- Can be more expensive on a per-invoice basis
This option suits businesses with seasonal spikes or one-off contracts.
4. Whole Ledger Invoice Finance
Consistent funding across your receivables
Whole ledger finance means all eligible invoices are funded under an ongoing facility.
- Predictable access to working capital
- Funding grows in line with revenue
- Often lower costs than selective funding
- Common in recruitment and labour-hire models
Designed for businesses with regular invoicing and consistent growth plans.
5. Recourse vs Non-Recourse Invoice Finance
Who carries the risk
This applies across most invoice finance structures.
- Recourse means your business remains responsible if a customer doesn’t pay
- Non-recourse transfers the risk of non-payment to the funder, usually at a higher cost
Let’s Find the Right Fit for Your Business
Invoice finance should work around your business — not the other way around. If you’re unsure which structure is right, or want to explore a smarter, more flexible approach to funding, we’re here to help.
At APositive, we work with UK businesses to design invoice financing solutions that support cash flow today and scale with you tomorrow.
Get in touch with our team to talk through your options and see what’s possible.
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