Invoice Discounting: Stop Waiting 60 Days to Get Paid
You’ve done the work. You’ve raised the invoice. Invoice discounting means you don’t have to wait 30, 60 or 90 days for the money to arrive — you access most of it now, and the rest when your customer pays.
Plain English: You raise an invoice. A lender advances you most of that money straight away — typically 80 to 90 pence in every pound. Your customer pays you as normal. When they do, the lender takes their fees and releases the rest to you. Your customers never know it is happening.
What Is Invoice Discounting?
Many business owners have money they have already earned sitting in unpaid invoices — sometimes tens or hundreds of thousands of pounds — while still having to pay wages, suppliers, and overheads on time. Invoice discounting solves that gap.
You raise your invoices as normal and send them to your customers as you always have. You then notify your lender, who advances you a large percentage of the value right away. Your customer pays you on their usual terms, that payment clears the advance, and the lender releases the remainder to you minus their charges. From your customer’s point of view, nothing has changed.
Unlike an overdraft, which has a fixed limit set by the bank, invoice discounting grows with your business. The more invoices you raise, the more funding is available to you — so it is particularly useful for businesses that are growing and need cash to keep up with demand.
It is also worth understanding what invoice discounting is not. It is not a loan against your property or equipment. It is not asking a third party to collect your debts for you (that is invoice factoring, which is a different product). You remain in charge of your customer relationships at all times.
If you only want to finance one or two specific invoices rather than your whole book of outstanding bills, there is a version called selective invoice finance that allows this — though it generally costs a little more. Pinks can help you decide which approach makes more sense for how your business works.
Up to 90% of your invoice value paid to you immediately — some lenders now advance up to 99% depending on your business and customers
24–48 hours: typical time to receive funds once the facility is established
Confidential: customers pay you directly — no lender contact with your clients
How the Process Works
From the first conversation to cash in your account, here is what to expect.
Step 1: Pinks Reviews Your Business
We look at your turnover, the type of customers you invoice, how long they typically take to pay, and your trading history. This tells us which lenders are likely to say yes, on what terms, and how much they will advance you. We do this before any application goes anywhere — because an unnecessary declined application can affect your credit record, and we want to avoid that.
Step 2: We Prepare and Submit Your Application
We put your application together and present it to the right lender. The way a case is positioned makes a real difference to the outcome and the rate you are offered. We have done this many times — so we know what lenders want to see and how to show your business in the strongest light.
Step 3: Approval and Setup
Once approved, the lender will review your outstanding invoices and complete the legal paperwork. This typically takes one to two weeks. Once it is all signed and in place, a funding account is set up and ready to use.
Step 4: You Start Drawing Funds
Raise an invoice, notify the lender — usually through a simple online portal or directly through your accounting software — and the funds are in your account, typically within 24 hours. When your customer pays, the lender takes their fees and releases the balance to you. New invoices go in, the pot replenishes. It runs continuously alongside your business.
Example: A building contractor with £250,000 in invoices awaiting payment
At 85%, £212,500 is available to draw today — before a single customer has paid. As those invoices settle over the next 30 to 60 days, new invoices replace them and the pot stays full. The business is no longer waiting. It is not a loan to repay. It is just the money you have already earned, available when you need it.
Why Business Owners Use Invoice Discounting
Cash flow is the single most common reason good businesses run into difficulty. Invoice discounting addresses the root cause directly. Here is what it changes in practice.
You Get Paid When the Work Is Done
You stop carrying the cost of your customers’ payment terms. Instead of waiting 30, 60 or 90 days, the money is with you within 24 hours of raising the invoice. You pay wages, suppliers, and overheads on time — because you can.
Your Customers Never Know
This is confidential. Your customers continue to receive invoices from you and pay you directly, exactly as before. There is no third party contacting them. No awkward conversations. Nothing changes on their end.
The More You Invoice, the More You Can Access
As your business grows and you invoice more, your available funding grows with it automatically. You are not stuck applying to the bank every time you land a big contract. The facility moves with your turnover.
It Does Not Touch Your Existing Bank Facilities
Invoice discounting is secured against your outstanding invoices — not your property, equipment, or personal guarantee in the way a traditional overdraft often is. In most cases it sits separately from your bank account and does not eat into any existing credit you have.
Fund Your Growth From Work You Have Already Won
Taking on more staff, buying materials for a bigger contract, or investing in new equipment — all of these become easier when you are not waiting for invoices to clear. You are using money you have already earned, not borrowing against something you hope to earn.
Late-Paying Customers Stop Being Your Problem
Most businesses have at least one customer who pushes the 90-day mark. With invoice discounting in place, that slow payment no longer causes a ripple through your entire operation. You have already been paid.
What Does It Cost?
There is no single interest rate to quote, because the charges work differently to a loan. There are two main costs — and a few smaller ones worth knowing about. Understanding them upfront means no surprises once you are live.
| Charge | What It Is | What to Watch |
|---|---|---|
| Service Fee; Charged on total annual turnover — not just what you draw. | Typically 0.2%–0.5% of turnover per year. Applies even if you draw nothing. Usually includes a monthly minimum. | The monthly minimum is the detail most people miss. Know it before you sign. |
| Discount Rate; Interest charged daily on the money you have actually drawn. | Charged only on funds drawn. Some lenders offer rates as low as 0.06% per day on qualifying facilities. | A low rate paired with a high service fee may cost more overall. Always compare the full picture. |
| Setup Fee; One-off charge when the facility is first established. | Varies by lender. Some waive it; others charge £500–£2,500. | Often negotiable, particularly when the deal is introduced through Pinks. |
| Other Charges; Bank transfers, same-day payment fees, occasional admin. | Small individually, but worth understanding if you move money frequently. | Always read the full schedule of charges — not just the two headline numbers. |
Pinks View: The real question is not what the facility costs — it is what it costs compared to the alternative. If the alternative is turning down work, paying suppliers late, or relying on an expensive overdraft, the net cost of invoice discounting is often lower than it first appears. We work through that calculation with every client before recommending anything.
Does It Work for Your Business?
Invoice discounting works for businesses that invoice other businesses on payment terms — meaning your customers have 30, 60 or 90 days to pay. If that describes how you trade, there is likely a facility available to you. The question is which lender and on what terms.
What Lenders Typically Look For
- At least two years of trading, with accounts filed
- You invoice other businesses (not members of the public) and give them time to pay
- You have more than one customer — lenders prefer a spread, not all your eggs in one basket
- Your invoices are clean — not disputed or tied up in complex arrangements
- Your customers generally pay, even if they are sometimes slow
- You keep a reasonable record of what is owed to you and when
Industries It Works Well In
- Construction and building contractors
- Recruitment and staffing agencies
- Haulage, logistics and transport
- Manufacturing and wholesale distribution
- Professional services — consultancies, accountants, engineers
- Facilities management and maintenance
Frequently Asked Questions
No. Your customers continue to receive invoices from you, pay you directly, and have no involvement with the lender whatsoever. The arrangement is entirely between you and the finance provider. This is the key difference between invoice discounting and invoice factoring — with factoring, a third party takes over your collections, and your customers do become aware. With invoice discounting, nothing visible changes.