Set up a Selective Invoice Finance facility that puts you in charge, allowing you to choose which invoices and which clients you wish to borrow against.
Rather than a traditional invoice finance facility that is against your whole debtor book, a selective facility provides a more flexible approach.
You can choose which invoices you wish to finance and also only use the finance when you need it.
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.
Selective invoice finance at a glance
- You choose which invoices or which customers to fund, rather than the whole ledger
- Credit limits from £5,000 to £5 million
- No whole turnover commitment and no long minimum terms on most facilities
- Pay only when you use it, so a quiet month costs you nothing
- 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 allows you to pick and choose which invoices or which clients you want to fund. You will be granted a maximum credit limit and can then select one or more invoices to fund against up to your credit limit. Similar to a Revolving Credit Facility.
- Choose Which Invoices To Finance
- Pick & Choose Invoices/Clients
- £5k to £5 Million Credit Limit
- Bad Credit Accepted
- No Long Term Commitments
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.
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 | 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 the terms are sometimes used interchangeably by funders, but there is a practical difference worth understanding.
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.
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.
| Invoice value | £40,000 |
| Customer payment terms | 60 days |
| Advance rate | 85%, so £34,000 released |
| Fee | About 2.5% of invoice value for the period |
| Cost | About £1,000 |
| Remaining balance on settlement | £40,000 less £34,000 advanced less £1,000 fee, so £5,000 |
The figure to weigh that against is what the cash is worth over those 60 days. If £34,000 lets you take on work you would otherwise turn down, or settle a supplier bill early at a discount, the arithmetic often works. If you are funding routine invoices month after month, the same money on a whole turnover facility would cost considerably less and you should price both.
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 invoice factoring companies to meet your requirements. Get access to funds in as little as 24 hours.
- Specialist Selective Invoice Financing Brokers
- Free No Obligation Quotes
- Zero Broker Fees
- Compare Selective Factoring Companies
- Fast & Friendly Customer Service
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.
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.
Related reading
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. Advance rates, fees 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.