Does your business have or require an Invoice Discounting lending facility?
If so we can assist you with comparing available providers, guide you through the application process and provide ongoing independent support.
There are a large number of potential invoice discounting providers available in the UK. Some cater for specific sectors like Recruitment or Construction.
A wide range of circumstances can be catered for. Confidential discounting is usually more suitable for established businesses with in house credit control.
Written by Marcus Wright, owner and founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since 2019. Last reviewed September 2026.
Independent Invoice Discounting Brokers
We make setting up a confidential discounting facility simple and straight forward.
You will benefit from our experience and get to compare offers from different banks and lenders.
Why use us
- Experienced Invoice Discounting Brokers
- £50k to £100 million
- Invoice Discounting Made Simple
- Negotiate Existing Discounting Agreements
- Apply For Confidential Discounting
Call 0161 546 9128 or fill in the form below to speak with an invoice discounting broker.
What Is Invoice Discounting?
Invoice Discounting or Confidential Discounting is a type of invoice finance that is secured against your outstanding debtor book. If you are owed money from your clients, you can release up to 100% of the outstanding value.
This only applies if you trade B2B and offer credit terms to your customers.
Discounting is suitable for:
- Fast Growing Businesses
- Well established SMEs and large businesses
- Construction Discounting
- Applications For Payments & Contractual Work
How Does Invoice Discounting Work?
An Invoice Finance company will agree to pay you a set percentage of your outstanding invoices.
For example if your debtor book is £100k and they agree to a 90% payment percentage, the lender will make £90k available for you to draw down as required.
Any applicable fees and/or interest will be deducted from the available balance. Once your customer pays the invoice, the balance is cleared with the lender.
With a discounting facility you normally continue with your collections in house. Also it would normally be on a confidential basis, with minimal contact with your customers by the bank or lender.
Do You Qualify For Invoice Discounting?
Discounting is the harder of the two facilities to obtain, because the funder is lending against a ledger it does not control and does not verify with your customers. That means the bar sits on your systems and your track record rather than just on the invoices.
| Requirement | Typical position |
|---|---|
| Trading history | Around twelve months minimum, though some funders want two years |
| Turnover | Commonly from £250,000, with the most competitive pricing above £1m |
| Credit control | An in house function with proper aged debtor reporting |
| Accounting systems | Reconciled, up to date, capable of producing a monthly reconciliation for the funder |
| Customer spread | No single debtor dominating the ledger, subject to concentration limits |
| Profitability | Generally profitable or clearly trading out of a loss |
If you do not meet these yet, that is not the end of it. Many businesses start on a factoring facility and move across to discounting once they have the trading history and the credit control in place. Moving between funders and facility types at renewal is normal and we handle it regularly.
How Much Does Invoice Discounting Cost?
The fees vary significantly between lenders and will be dependent on a large number of factors.
Pricing is built the same way as factoring, from a service fee on turnover and a discount fee on the money you draw. The difference is that the service fee is lower, because you are doing the credit control rather than the funder.
| Charge | Invoice discounting | Invoice factoring |
|---|---|---|
| Service fee | Around 0.2% to 1% of turnover | Around 0.5% to 3% of turnover |
| Discount fee | Around 2% to 4% over base | Around 2% to 4% over base |
| Credit control | You do it | Included |
The Bank of England base rate is 3.75%, held on 17 September 2026. A facility quoted at 3% over base therefore costs 6.75% a year on the drawn balance. Figures above are illustrative market ranges, not a quote. See how invoice finance pricing is built up for worked examples.
The saving on the service fee is real but it is not free money. You are taking on the chasing, the statements and the query handling. On a smaller ledger the saving can be less than the cost of the person doing that work, which is worth calculating before you switch.
Get in touch to have a no obligation chat about what your options may be and the potential costs involved.
Our invoice finance calculator will price this against your own ledger. Enter turnover, debtor days and the fees you have been quoted, and it returns the total annual cost, the cost as a share of turnover, and the effective annual rate on the money actually drawn.
Is Discounting Right For You, Or Would Factoring Fit Better?
Invoice discounting is confidential and cheaper, but the entry criteria are tighter. Most funders want around twelve months of trading, a higher turnover and a credit control function already in place. Factoring has no minimum turnover with some funders and no minimum trading period, but it is disclosed to your customers and costs more because credit control is included.
If you are weighing the two up, the full side by side comparison sets out the differences on advance rate, confidentiality, eligibility and cost.
Related guides
Discounting by sector
Invoice Discounting FAQ
Will my customers know I am using invoice discounting?
Not under a confidential facility, which is the standard arrangement. Your customers continue to pay you as normal and the funder has minimal contact with them. Some funders run periodic verification checks on a sample of invoices, which are handled discreetly.
What is the difference between invoice discounting and factoring?
Credit control and disclosure. With discounting you keep your own credit control and your customers are not told. With factoring the funder collects the debt and your customers pay them directly. Discounting is cheaper, factoring is easier to qualify for.
How much can I borrow with invoice discounting?
Typically 80% to 90% of your eligible sales ledger, and up to 100% with some funders in certain circumstances. Facilities run from around £50,000 to £100 million. The figure that matters is the advance rate after concentration limits and excluded invoices, not the headline percentage.
Can I get invoice discounting as a new business?
It is unlikely in the first year. Most discounting funders want a trading history and established credit control. A start up is usually better served by factoring initially, then moving to discounting once the business has a track record.
Can I switch my existing discounting facility to another provider?
Yes, and it is one of the more common things we are asked to do. Check your notice period first, since twelve months with three months notice is typical. We can also negotiate with your existing funder, which sometimes produces a better result than moving.
Is invoice discounting available for construction?
Yes, but from a narrower panel. Construction ledgers built on applications for payment rather than invoices need a funder that understands certification, retention and contra charges. See construction finance for how that works.
Not under a confidential facility, which is the standard arrangement. Your customers continue to pay you as normal and the funder has minimal contact with them. Some funders run periodic verification checks on a sample of invoices, which are handled discreetly.
Apply For Invoice Discounting
Please fill in the form below and one of our invoice discounting brokers will be in touch straight away.
Four numbers and we can price it
Your turnover, your payment terms, your largest customer as a share of the ledger and whether you have credit control in house. That is enough for us to tell you whether discounting is achievable and what it should cost. We do not charge broker fees on invoice finance.
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd. He has worked in financial services since 2008, beginning his career at Santander, and spent time on the lender side at an independent invoice finance provider before becoming a commercial finance broker in March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank’s own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders.
Call 0161 546 9128.
Marcus is also the author of UK Commercial Finance (2026), a commercial finance book for UK business owners and property investors.
Bolton Business Finance Ltd is an independent commercial finance brokerage, not a lender. We are not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. All lending is for business purposes only. Figures on this page are illustrative, describe general market practice as at September 2026 and are not a quote. The Bank of England base rate referenced is 3.75%, held on 17 September 2026. Advance rates, pricing and eligibility vary between lenders and every application is assessed on its own merits. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.