Invoice Financing: A Beginner’s Guide

Late-paying clients? Waiting weeks or even months for invoices to clear? For many businesses, unpaid invoices can create serious cashflow gaps, holding you back from growth or day-to-day operations. That’s where invoice financing steps in.

In this beginner’s guide, we’ll explain exactly what invoice financing is, how it works, and why it might be the flexible funding solution your business needs.

Invoice financing is a type of borrowing that allows businesses to access money tied up in unpaid invoices. Instead of waiting for customers to pay, you can get a large portion of the invoice amount (often up to 90%) within 24–48 hours from a lender.

1. You issue an invoice to your customer as usual.
2. Lendz helps you access funding against that invoice within 1–2 working days.
3. Your customer pays the invoice in full (either to you or directly to the finance provider).
4. The remainder of the funds is released to you, minus a small agreed-upon fee.

There are two main types:

• Invoice Factoring – The lender manages your sales ledger and collects payments on your behalf.
• Invoice Discounting – You remain in control of the customer relationship and payment collection, keeping the process confidential.

• Quick access to cash without waiting for customers to pay.
• No need to take on additional debt.
• You can finance specific invoices or your entire sales ledger.
• Helps maintain consistent cashflow for payroll, suppliers, or growth

Invoice financing is ideal for B2B businesses that issue invoices with payment terms. It’s especially useful in industries like manufacturing, logistics, recruitment, and services—where payment delays are common.

At Lendz, we work closely with you to understand your situation and connect you with trusted UK invoice finance providers. With over 25 years of lending experience, our advisors offer transparent guidance, fast turnaround, and tailored solutions to help your business move forward.