Invoice Finance for Bad Credit UK

Invoice finance flips the question every other lender asks. Instead of underwriting you, it underwrites the people who owe you money. The lender advances a percentage of your unpaid invoices, usually up to eighty or ninety percent, and gets repaid when your customers settle. Its security is the receivable, a debt owed to your company by a third party, so the creditworthiness that matters most is your customers', not yours.

That is why an adverse credit file on the director or the company carries far less weight here than it would on an unsecured loan. What the lender studies instead is the ledger. Are your debtors financially sound, is your invoicing clean and free of disputes, and are the debts spread across several customers rather than concentrated in one. A ledger owed by a handful of solid, creditworthy businesses is strong security regardless of what sits on your credit file.

With adverse credit, lenders often prefer factoring to confidential invoice discounting. Under factoring the lender runs the sales ledger and collects directly from your customers, which gives it control and visibility and lets it get comfortable with a weaker borrower profile. Discounting, where you keep collecting and the facility stays confidential, is usually reserved for stronger balance sheets.

The facility is self-liquidating, which is the other reason it suits adverse profiles. Each invoice repays its own advance when the customer pays, so the lender is never exposed for long and its risk is tied to real, dated debts rather than an open-ended loan. Bad-debt protection can be added to the facility to cover a customer failing to pay.

The risk a lender prices against here is not your credit history, it is fraud and disputed invoices, so expect warranties about the ledger and usually a personal guarantee from directors. This is commercial finance for UK limited companies that invoice other businesses on credit terms. We are a broker, not a lender, so we cannot promise a facility or a rate. We match your ledger to the invoice financiers whose appetite fits it.