Selective Invoice Finance UK ⋆ Fund The Customers You Choose

Selective invoice finance is a standing facility that lets you fund the customers or invoices you choose, whenever you need to, without putting your whole sales ledger through a funder.

Unlike a traditional invoice finance facility that covers your whole debtor book, a selective facility is underwritten once and then sits ready. You draw against it when cash is tight and leave it alone when it is not.

If you only need to fund one invoice as a one off, single invoice finance (spot factoring) is the simpler route. Selective finance is built for businesses that expect to draw more than once.

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 October 2026.

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Selective invoice finance at a glance

You choose which customers or which invoices to fund, rather than the whole ledger
A standing credit limit, underwritten once, so you draw without reapplying
Credit limits from £5,000 to £5 million
Disclosed or confidential, with confidential usually limited to established businesses
Pay only when you draw, so a quiet month costs you nothing on most facilities
Higher cost per invoice than a whole turnover facility, which is the trade off for the flexibility

Features of Selective Invoice Finance

A selective invoice finance facility lets you pick which customers or which invoices you want to fund. You are given a maximum credit limit and can then draw against one or more invoices up to that limit, as often as you need. It works in a similar way to a Revolving Credit Facility, but secured against your invoices.

Fund Chosen Customers Or Individual Invoices
Standing Credit Limit, No Reapplying
£5k to £5 Million Credit Limit
Disclosed Or Confidential Options
Adverse Credit Considered
No Whole Turnover Commitment

If you are not expecting to need funding against all your invoices or clients, then a selective facility may work out more cost effective.

How Selective Invoice Finance Works

The facility is agreed and a credit limit set. The funder reviews your business and your customer base, then sets a maximum you can have outstanding at any one time. Nothing is drawn at this stage and, on most facilities, nothing is charged.
You raise an invoice as normal. Your sales process does not change.
You choose whether to fund that invoice. This is the part that makes the facility selective. You might fund a large invoice on 90 day terms and leave a dozen small ones on 30 day terms alone.
The funder verifies the invoice and advances the money. Typically 80% to 90% of the invoice value, often within 24 hours once the facility is live.
Your customer pays. To the funder under a factoring arrangement, or to you under a confidential discounting arrangement.
The balance is released to you, less the funder’s fee for that invoice.

Choosing Which Customers To Fund

The most useful form of selective finance is often debtor selection. Rather than picking invoices one by one, you nominate specific customers and the funder finances invoices raised to them. The rest of your sales ledger stays outside the facility and your other customers are never contacted.

This suits a business with one or two large customers on long payment terms. A subcontractor supplying a main contractor on 60 day terms, for example, can fund that account and leave smaller customers paying in 30 days to settle as normal.

Funders underwrite each nominated customer individually and set a limit against each one. A strong, creditworthy customer improves both the advance rate and the price. A small or slow paying customer may be declined even when the rest of the facility is approved.

You can usually add customers as the business grows, subject to the funder approving a limit for each new one, and stop funding a customer when you no longer need to.

Types of Selective Invoice Finance

There are two main types of selective debtor finance facilities available in the UK.

Selective Invoice Factoring

The most common type of selective facility available is a selective factoring facility. This is usually available to businesses of any size and may include credit control and/or debt collection.

Your customer will usually be aware you have the facility as you may need to declare it on your invoices and invoices will be verified by the lender.

Selective Invoice Discounting

The other type of facility is selective discounting and is usually available to larger more established businesses with in house credit control.

This can sometimes be done on a confidential basis, with you maintaining your own in house credit and collections.

Confidential selective facilities are harder to obtain than disclosed ones. A funder taking on a handful of invoices without contacting the customer carries more risk than one funding a whole verified ledger, so expect a stronger trading history and tighter customer criteria to be required.

Selective vs Whole Turnover Invoice Finance

A whole turnover facility funds your entire sales ledger and you are committed to putting all of it through the facility. A selective facility funds only what you pick. The two are priced on completely different logic, which is why comparing the headline percentages will mislead you.

Selective compared with a whole turnover facility
	Selective	Whole turnover
What is funded	Invoices or customers you choose	The entire sales ledger
Commitment	Usually none, use it or do not	Minimum term, commonly 12 months with notice
Cost basis	A fee per invoice funded	Service fee on turnover plus discount fee on drawings
Cost in a quiet month	Nothing if you draw nothing	Minimum monthly service fee still applies
Cost per invoice	Higher	Lower
Credit control	Per invoice, or none	Included with factoring, not with discounting
Best for	Occasional or seasonal gaps, one large customer	Steady ongoing funding across the whole book

The simple test is how often you would actually draw. If you would fund most invoices most months, a whole turnover facility will almost always be cheaper, and you should look at invoice factoring or invoice discounting instead. If you would draw a few times a year, selective wins because you pay nothing the rest of the time.

Selective Invoice Finance vs Single Invoice Finance

These two are often confused, and some funders use the terms interchangeably, but the structure is different and it changes which one suits you.

Single invoice finance, sometimes called spot factoring, is a one off transaction. You fund one invoice, the deal completes, and there is no ongoing arrangement. Each new invoice means a new application.

Selective invoice finance is an ongoing facility with a standing credit limit. The underwriting is done once, then you draw against it whenever you choose without reapplying. If you expect to need funding more than once, selective is usually the better structure, because the admin happens once rather than every time.

Selective compared with single invoice finance
	Selective	Single invoice
Structure	Standing facility with a credit limit	One off transaction
Underwriting	Once, at set up	Every time you fund
What you choose	Customers or invoices, as often as you need	One invoice
Confidential option	Sometimes, for established businesses	Less common, usually disclosed
Best for	Recurring or seasonal gaps, one or two large customers	A single large or urgent invoice

What Does Selective Invoice Finance Cost?

Selective facilities are usually priced as a single fee per invoice funded, covering a set period such as 30 days, rather than the two part service fee and discount fee structure used on whole turnover facilities. Where an invoice runs past the period, a further charge normally applies.

Expect the per invoice cost to be meaningfully higher than the equivalent on a whole turnover facility. You are paying for optionality, and the funder is doing per invoice verification work without the volume that makes a full facility economic.

Illustrative example: a year on a selective facility
Credit limit	£75,000
Customer funded	One main contractor on 60 day terms
Invoices funded in the year	Four, each £40,000
Advance rate	85%, so £34,000 released each time
Fee	About 2.5% of invoice value per 60 day period
Cost per invoice	About £1,000
Cost for the year	About £4,000
Cost in months with no drawing	Nothing on most facilities

The figure to weigh that against is what the cash is worth when you need it. If £34,000 four times a year lets you take on work you would otherwise turn down, the arithmetic often works. If you would fund routine invoices month after month, a whole turnover facility would cost considerably less and you should price both. If you would only ever fund that one invoice, single invoice finance avoids setting up a facility at all.

Figures here are illustrative and not a quote. Pricing varies by funder, sector, invoice size, customer credit quality and payment terms. See the costs of factoring for how whole turnover pricing is built up.

Who Selective Invoice Finance Suits

It tends to work well for:

Businesses with one large customer on long payment terms and the rest of the book on short terms
Seasonal businesses with a few heavy months and quiet periods in between
Companies that want funding available without committing the whole ledger to a funder
Businesses that have outgrown one off single invoice deals but do not want a full facility
Firms winning an unusually large contract that stretches working capital temporarily

It tends not to suit:

Businesses that would fund most invoices most months, where whole turnover is cheaper
Companies wanting outsourced credit control across the whole ledger
B2C businesses, since invoice finance requires business customers on credit terms
Businesses whose customers are mainly small or poor credit quality, as selective funders underwrite the individual debtor closely

Selective Invoice Finance Brokers

As independent brokers we will compare offers from a number of companies that specialise in Selective Invoice Finance within the UK.

We can also compare different solutions for your circumstances, such as Single Invoice Finance, Invoice Factoring and Invoice Discounting.

Why Use Us?

We can act quickly and access a wide range of selective factoring and selective discounting funders to meet your requirements. Once your facility is live, funds against a chosen invoice are often available within 24 hours.

Specialist Selective Invoice Financing Brokers
Free No Obligation Quotes
Zero Broker Fees
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Selective Invoice Finance FAQ

What is selective invoice finance?

It is an invoice finance facility where you choose which invoices or which customers to fund, rather than committing your whole sales ledger. You are given a credit limit and draw against it only when you want to, so you pay only for the invoices you actually fund.

Is selective invoice finance confidential?

It can be, under a selective discounting arrangement, but disclosed facilities are far more common. Most selective funders verify the invoice with your customer, which means the customer becomes aware of the facility. Confidential selective facilities are generally only offered to larger, established businesses with their own credit control function.

Is selective invoice finance cheaper than factoring?

Per invoice, no, it is usually more expensive. Overall it can be cheaper, because you only pay when you draw. If you would fund five invoices a year it will almost certainly cost less than a whole turnover facility with a minimum monthly fee. If you would fund most of your ledger every month, it will cost more.

Can I get selective invoice finance with bad credit?

Often yes. Invoice finance is secured against the invoice rather than your balance sheet, so funders weigh your customer’s ability to pay heavily in the decision. Adverse credit, CCJs and past insolvencies do not automatically rule you out, though they narrow the panel and affect pricing.

How quickly can I get selective invoice finance?

Setting the facility up typically takes a few days to a couple of weeks depending on the funder. Once it is live, funds against a chosen invoice are commonly available within 24 hours of verification.

Do I have to fund a minimum number of invoices?

On most selective facilities, no. That is the main attraction. Some funders do apply a minimum annual fee or an inactivity charge, so it is worth confirming before you sign, since it changes the economics against a whole turnover facility.

What is the difference between selective and single invoice finance?

Single invoice finance funds one invoice as a one off deal, with no ongoing facility, so each new invoice means a new application. Selective invoice finance is a standing facility with a credit limit, underwritten once, that lets you fund chosen customers or invoices whenever you need to without reapplying.

Can I choose which customers to fund?

Yes. Many selective facilities work by debtor selection, where you nominate specific customers and the funder finances invoices raised to them. Each customer is underwritten individually and the rest of your ledger stays outside the facility.

Apply For Selective Invoice Finance UK

Complete the form below and one of our finance brokers will be in touch straight away to arrange a free no obligation quotation.

Your business must be based in the UK, we cover England, Wales, Scotland and Northern Ireland.

Tell us which invoices you want to fund

The invoice value, who the customer is, their payment terms and how often you expect to draw. That is enough for us to tell you whether selective is the right structure or whether a whole turnover facility would cost you less. We do not charge broker fees on invoice finance.

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