Factoring
The factor manages collections and the sales ledger. Customers pay the factor. Prepayments up to 95%. A dedicated client manager. Disclosed to customers, with confidential factoring available from a few UK providers.
- Range
- From £10,000
- Term
- Revolving with the ledger
- Family
- invoice
- Search
- Full market, one file
At a glance
- Up to 95% prepayment
- Collections handled
- Client manager
- £10k–£50m+
How it works
- 1You raise invoices and send them to the factor.
- 2The factor advances up to 90–95% of eligible value, often within 24 hours.
- 3A joint letter (you and the factor) tells customers to pay the factor. This is a disclosed facility.
- 4The factor manages collections and monthly statements; you get a dedicated client manager.
- 5When the customer pays, the advance is settled and the balance (less charges) is paid to you.
Who it’s for
- B2B businesses that want credit control taken off the books
- Teams that would rather spend time on sales than chasing payment
- UK and overseas debt in a range of currencies
- Companies from modest turnover up to £50m+ facilities
Good to know
Confidential factoring exists but is offered by only a few UK providers.
Because the factor runs a full ledger, audits are usually lighter — remote spot checks rather than a full on-site visit.
Customers will know you are factoring unless you specifically take a confidential product.
One application with QED searches the full market. That saves you running the same file around several lenders, and it avoids multiple credit searches on the business and directors. A hard search is only placed when you proceed with a chosen lender.
Invoice discounting vs factoring
Drawn from the comparison table on qedfinance.com/invoicefinance and qedfinance.com/how-does-invoice-finance-work.
Facility size
Invoice discounting
£10k to £50m+
Factoring
£10k to £50m+
Prepayment
Invoice discounting
Up to 95%
Factoring
Up to 95%
How invoices are advised
Invoice discounting
Electronically, often in batches. Running balance — the provider does not mirror every invoice.
Factoring
Each invoice. The provider runs a mirrored sales ledger, statements and collections.
Who does credit control
Invoice discounting
You do
Factoring
The factor (or you, if agreed)
Do customers know?
Invoice discounting
No — confidential. Payments go to a trust account in your name.
Factoring
Usually yes — notice of assignment. A few UK houses offer confidential factoring.
Monthly statements
Invoice discounting
You send them
Factoring
The factor sends them
Who customers pay
Invoice discounting
A trust account in your name, managed by the funder
Factoring
The factor, who tells you when cash lands
Audits
Invoice discounting
At least one on-site audit of books and procedures a year
Factoring
Spot checks, often remote, because they already run the ledger
Worked example — £1,200 invoice
- £1,200.00 gross sales invoice (incl. 20% VAT)
- 30-day credit terms offered to the customer
- Funder advances 85% against invoices
- Customer pays 22 days late
- Service charge assumed at 2%
Day 1
With invoice finance
£0 — goods delivered, invoice raised
Without
£0
Day 2
With invoice finance
£1,020 in the bank (85% of £1,200)
Without
£0
Day 40
With invoice finance
Still £1,020 — invoice is 10 days overdue
Without
£0 — still waiting
Day 52
With invoice finance
£1,176 net after the advance is repaid and 2% charged
Without
£1,200 lands in one go
You had 85% of the money on day 2 — cash to buy the next job, pay staff or take a discount from suppliers. By day 52 you have £1,176 of the £1,200 (the 2% fee). Same numbers as qedfinance.com/how-does-invoice-finance-work.
You wait the full 52 days with nothing. Late payers freeze payroll, materials and the next contract. That is the cash-flow problem invoice finance is built to solve.
Documents QED will ask for
Same list as the attach-files section on the website application. Tick what you have when you apply; email the rest.
- Last published accounts (full accounts, not abbreviated)
- Latest management accounts if year-end is stale
- Last 3 months’ business bank statements
- Last month-end aged debtors report (summary)
- Last month-end aged creditors report (summary)
- Live customer names, addresses and contacts
- Existing invoice-finance contract and latest statement (if refinancing)
FAQ
Drawn from qedfinance.com and the way the UK market actually underwrites these facilities.
Will collections damage customer relationships?
A good factor collects professionally and you stay in the loop. You can still handle key accounts if that is agreed. Choose the house for culture as much as price — that is part of the QED match.
Can I keep credit control myself?
Yes, via invoice discounting, or via confidential factoring where it is available. Standard factoring assumes the factor collects.
Is it more expensive than discounting?
You pay for the collections service as well as the money. Pound-for-pound it can cost more than discounting, but you save the in-house credit-control cost.
What is invoice finance?
An advance against invoices that your customers will pay. Factoring is the disclosed version: customers are told (usually by a joint letter) to pay the factor. The factor runs collections and a mirrored sales ledger.
Is confidential factoring possible?
Yes, but only a few UK providers offer it. If staying confidential matters, say so on the application — QED will look at those houses, or at invoice discounting instead.
Is invoice finance only for struggling businesses?
No. The UK industry serves around 50,000 clients borrowing over £16 billion at any one time, from start-ups to multi-nationals. Growing companies use it because the facility grows with the sales ledger.
Will this affect my credit score?
Starting a search with QED does not place a hard search. Credit checks that can affect a score only happen when you proceed with a chosen lender.
Do my customers have to know?
It depends on the product. Invoice discounting is confidential. Factoring is usually disclosed (a notice of assignment on invoices), though a few UK providers offer confidential factoring.
Prefer a number first?
Run the same calculator that sits on the website, then apply if the shape looks right.
Open the calculatorQED is a broker, not a lender. A low credit score can limit options with some houses; a search with us does not place a hard search on the business or directors until you proceed with a chosen lender.