Invoice factoring for UK businesses

Invoice factoring lets a business transfer collection of its invoices to a specialist factor and receive an advance against them. This page explains how the arrangement works, who collects the invoices, how factoring differs from discounting, and the steps involved in arranging a facility.

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What invoice factoring is

Invoice factoring transfers the collection of a business's invoices to a specialist factor and provides an advance. It is a way of releasing capital tied up in outstanding invoices, bringing forward money the business has already earned. Timescales depend on the lender and the deal.

Oku Financial arranges invoice factoring independently. We design the facility before approaching factors and present the available options clearly. The starting point is what your business needs.

Who it suits

Customer profile: businesses invoicing other businesses, particularly smaller teams with limited capacity for credit control.

Operational fit: growing companies that want a specialist to manage debtor collection, and are comfortable with that specialist dealing with customers about payment.

These are factors to discuss, not a guarantee of eligibility. All finance is subject to status and provider criteria.

How factoring works

The collection of the invoices is transferred to a specialist factor, and the business receives an advance. The collection role is the important distinction from discounting, where the business maintains its own sales ledger confidentially. Timescales depend on the lender and the deal.

Factoring and discounting sit under Invoice Finance. We tell you which fits before approaching a lender, then structure the requirement and take the opportunity to market. No advance amount or pricing figure is assumed here; the facility remains subject to status.

Why an independent broker, not your bank

Independent

We have no balance sheet to protect and no product to push. We work independently, matching the requirement to the right lender rather than starting with a product to sell. The conversation starts with what your business needs, not with an existing lending product.

An independent approach means the finance requirement comes first. Trade finance, business lending and capital & liquidity are different funding disciplines, and we tell you which fits before approaching a lender. We present the options clearly and without bias, so the choice remains with your business.

Fast

We take your opportunity to the right lenders simultaneously, creating genuine competition and compressing timelines. This describes how we approach the market, not a promise about an approval or drawdown date. The facility is structured before the opportunity is put to the right lenders.

The purpose of approaching lenders simultaneously is to bring back options that can be reviewed together. We negotiate on your behalf and present those options clearly. Rather than negotiating blind, you can review the offers in the context of the requirement we have already discussed and structured.

Precise

We design the deal before we approach a lender: size, tenor, security and covenants. The structure comes first, so the opportunity we take to market reflects what your business needs. We then match the requirement to the right lender without unnecessary structure or cost.

The starting point is a conversation about your business and what you want to achieve. The product name is only part of that conversation. We identify the right structure and prepare the opportunity properly before going to market, then explain the options clearly before you choose.

How it works

Tell us what you need
Tell us about your business and what you are looking to achieve. The starting point is the requirement rather than a finance product. We take the time to understand your business properly and tell you which funding discipline fits before approaching a lender.
This conversation gives us the context for structuring the facility. We work across trade finance, business lending and capital & liquidity, so the discussion can start with the business need rather than assuming that a particular product is the answer.
We structure your facility
We identify the right structure and prepare your opportunity before approaching lenders. The deal is designed first: size, tenor, security and covenants. We match the requirement to the right lender without unnecessary structure or cost, keeping the business need at the centre of the process.
Once the opportunity has been prepared, we approach the right lenders simultaneously. That creates genuine competition and compresses timelines. We negotiate on your behalf, with the structure of the facility established before the opportunity is taken to market.
Review your offers
We bring back competitive options from lenders, presented clearly and without bias. You choose. The offers are reviewed against the requirement and the structure of the facility, rather than treating every offer as the same product. We tell you which fits before approaching a lender.
Our role is to present the options clearly so you do not negotiate blind. We are an independent broker, not a lender. The choice remains with your business, and the facility remains subject to status and the requirements of the finance provider.
We close it
We manage the process through to drawdown, coordinating lenders, lawyers and paperwork. This is the final step in the same process that began with understanding the business need. Our role continues through the placement of the facility, rather than ending when offers are presented.
Tell us what you need, let us structure the facility, review the offers and choose the option that fits. We then manage the steps through to drawdown. All finance remains subject to status; guarantees and indemnities may be required.

Download product sheet (PDF)

Frequently asked questions

What is invoice factoring?

Transferring invoice collection to a specialist factor and receiving an advance. Timescales depend on the lender and the deal.

Who collects my invoices with factoring?

A specialist factor takes over invoice collection.

Factoring or discounting?

Discounting lets you keep your own sales ledger confidentially; factoring hands collection to a specialist factor. We'll tell you which fits before approaching a lender.

Is Oku Financial a lender?

No. Oku Financial is a commercial finance broker. We work with a panel of lenders to find funding for UK businesses.

How much can I receive through invoice factoring?

Invoice factoring typically offers an advance of 75–90% of invoice face value. All figures are indicative and subject to status.

What does invoice factoring cost?

Invoice factoring typically has a fee of 0.75–2.5% of invoice value and a discount charge of 1.5–3% over base rate (daily). All figures are indicative and subject to status.

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