Invoice Finance for Professional Services Firms

Professional services firms sit in an odd position: the work is done, the invoice is raised, the client will pay, but the cash is locked away for 30 to 60 days. Confidential invoice discounting solves exactly this. The lender advances typically 85-90% of your invoice value the day you raise it; your client pays on the usual terms straight into a trust account; the lender releases the balance minus their fee. Your client never knows a funder is involved, which matters when you are a law firm or accountancy practice where appearing financially stretched is the last thing you want.

What lenders look at here is different from a manufacturing deal. There are no physical goods, no stock, no retention of title to fall back on. So underwriters focus on client quality (FTSE-listed or government debtors get better advance rates than SME debtors), contract clarity (is the work genuinely complete before the invoice is raised, or are there grounds for dispute?), and your debtor payment history. A firm billing on 30-day retainers with blue-chip clients will typically access higher advance rates and lower service fees than one running large project invoices against a spread of smaller private companies.

Confidential invoice discounting typically requires £500k or more in annual turnover. Below that threshold, disclosed factoring, where the funder handles your credit control, usually costs less and involves less operational overhead. As a broker we do not lend ourselves; we will tell you which structure makes sense for your numbers, and which lender is likely to price it best, before anything is agreed.