Key Takeaways
- A fast invoice payment solution helps businesses access cash from unpaid invoices quickly.
- This is not a loan, so no extra debt is added to your business.
- Typically, businesses receive 70%–90% of the invoice upfront.
- The service includes a small fee, usually between 1% and 5% of the invoice amount.
- Many industries that deal with slow-paying customers use this solution to maintain cash flow.
What Is an Invoice?
Most businesses operate on invoiced payments rather than immediate cash. An invoice is a document sent to a customer specifying how much they owe and the payment terms, often 30–60 days.
For example, if you run a painting company and complete an office project worth €5,000, your invoice may give the client 30 days to pay. While the work is done, the money isn’t in your bank yet.
Sometimes, waiting isn’t an option—especially if your business needs to pay suppliers, staff, or take on new jobs. That’s where a fast invoice payment solution can help.
What Is a Fast Invoice Payment Solution?
A fast invoice payment solution allows businesses to convert unpaid invoices into immediate cash. Instead of waiting for customers to pay, you sell the invoice to a specialized company. That company provides most of the invoice value upfront and collects payment from your customers when it’s due.
For instance, if your invoice totals €10,000, the factoring company may advance €8,500 immediately. After your customer pays the full amount, you receive the remaining balance, minus the service fee. This process ensures businesses avoid cash flow gaps and can continue operating without delays.
How Does It Work?
Complete a job or deliver goods and issue an invoice to your customer.
Submit the invoice to a fast invoice payment provider. The application is usually quick and straightforward.
Receive 70%–90% of the invoice value upfront.
The provider collects the payment from your customer.
You receive the remainder minus the fee after payment is made.
Once set up, businesses can access funds within 24–48 hours of submitting an invoice.
Why Do Businesses Use a Fast Invoice Payment Solution?
Slow-paying customers can create cash flow issues, even when a business is thriving. A fast invoice payment solution helps by:
Paying rent, salaries, or suppliers on time
Funding new projects without delay
Avoiding traditional bank loans or credit card debt
Reducing time spent chasing unpaid invoices
This solution is especially valuable for businesses that experience seasonal demand or rapid growth, as it provides reliable cash flow when it’s needed most. Unlike traditional business loans, this approach allows companies to access funds based on work already completed rather than future repayments.
Who Can Benefit?
Businesses that primarily operate in B2B markets and issue invoices regularly are ideal candidates. Industries that often qualify include:
Construction and building services
Trucking and logistics companies
Cleaning and janitorial services
Manufacturing and wholesale operations
Marketing and creative agencies
General eligibility rules often include:
A minimum annual sales amount (usually £50,000 or more)
A history of reliable customer payments
Valid, unpaid invoices that are not already pledged elsewhere
Businesses with long payment cycles, rapid expansion, or frequent late-paying customers gain the most from this solution.
Benefits of a Fast Invoice Payment Solution
Unlike options such as asset finance, this solution doesn’t require equipment or vehicles to be used as collateral.
- Quick Access to Cash: Most of your invoice value is available within 1–2 business days.
- Better Cash Flow: Immediate funds allow you to manage day-to-day expenses without stress.
- No Loans or Interest: You’re advancing existing revenue, not borrowing money.
- Growth Opportunities: Extra cash lets you take on larger projects or hire more staff.
- Collections Support: Some providers handle invoice collections, saving you time.
Potential Downsides
While beneficial, there are some drawbacks:
Cost: Service fees are usually 1%–5% per invoice.
Customer Awareness: Customers are notified that a third party is handling payments.
Invoice Eligibility: Customers with poor credit may prevent an invoice from being accepted.
Factoring vs. Discounting
While both methods provide early access to cash:
Factoring: The provider manages collections; customers are aware of the service.
Invoice Discounting: You manage collections; service remains private.
Smaller and medium-sized businesses tend to use factoring, while larger companies may prefer discounting.
Costs to Consider
The fee depends on invoice size, customer payment history, and industry. Typical fees are 1%–5% of the invoice total. Some providers may include setup fees or monthly minimums. Always review terms carefully before committing.
When to Use a Fast Invoice Payment Solution
Consider this solution if:
Customers take long to pay invoices
You need cash for day-to-day operations
You want to fund business growth without taking loans
You spend significant time chasing late payments
It can also help bridge gaps when large tax bills are due, particularly alongside structured options such as VAT loans.
Getting Started
Choose a Provider: Look for reputable providers with experience in your industry.
Apply and Submit Invoices: Provide your business and customer details.
Receive Approval: Initial approval may take a few days; subsequent invoices are faster.
Get Paid: Funds are typically available in 24–48 hours.
Collections: The provider follows up with customers when payments are due.
What Happens if Customers Don’t Pay?
Recourse Factoring: Your business remains liable for unpaid invoices.
Non-Recourse Factoring: The provider absorbs the risk, though fees may be higher.
Final Thoughts
A fast invoice payment solution is ideal for businesses seeking to avoid cash flow gaps and maintain operational momentum. While not suitable for every situation, it is a reliable way to access funds quickly, fund growth, and reduce administrative stress.
FAQs
1. Is this a loan?
No. You’re simply accessing money from invoices you’ve already issued.
2. Will customers know?
Yes, with factoring services, customers pay the provider directly.
3. How quickly will I get paid?
Typically within 24–48 hours.
4. Can small businesses use this?
Absolutely. It’s ideal for small and medium-sized B2B companies.
Ready to Make Asset Finance Work for Your Business?
Partner with MacManus Asset Finance Ltd, an independent broker established in 2005, helping UK SMEs access tailored finance solutions. Our friendly, professional, and consultative team works across all industries and can guide you through hire purchase, leasing, and finance lease options. With access to over 60 finance companies and full FCA authorisation, we ensure your business finds the right solution for growth.
