# Invoice Finance Costs Explained Source: https://www.cashbookfinance.co.uk/insights/invoice-finance-costs-explained Last updated: 2026-10-26 Author: Bjorn Laku, Director & Chief Marketing Officer (https://www.bjornlaku.com/) Publisher: Cashbook Finance Limited > Understand invoice finance costs, including service fees, discount charges, minimums and the factors that affect pricing, availability and facility value. FCA-registered UK lender FRN 782472 ## Invoice finance costs explained. The moving parts behind invoice finance pricing are the service fee, discount charge, debtor quality, ledger behaviour, concentration risk and evidence quality. This guide explains each, so you know what a quote is actually charging for. It is a cost guide, not a rate card. Written and reviewed by [Bjorn Laku](https://www.cashbookfinance.co.uk/bjorn-laku), Director & CMO. INV-2048 · Arden Health Group Illustration Cash received · this invoice A £50,000 invoice on 30-day terms - **Invoice value** £50,000 - **Paid to you, day 1–2** £45,000 - **When your customer pays** £4,000 Invoice value · £50,000 Illustrative: a 90% advance and a discount charge of about 2% of the invoice. Rates and advances vary by business, sector and customers. Check eligibility **£30m+** funded · **100+** UK businesses since 2019 · London SE1 - FCA **782472** - ICO **ZB545200** - Companies House **10723098** Cost component **What you may pay** Usually a service fee and discount charge, sometimes with setup, audit or minimum fees depending on the facility. Service fee · Discount charge · Facility terms Pricing driver **What changes the quote** Debtor strength, invoice age, [dilution](https://www.cashbookfinance.co.uk/insights/invoice-finance-glossary#term-dilution) risk, volume, sector, contract evidence and ledger discipline all move pricing. Debtor quality · Ledger behaviour · Evidence strength Decision shortcut **Use this page for** Reading quote terms, spotting expensive structures and knowing what to improve before applying. Compare quotes · Avoid surprises · Improve terms - [Invoice Finance vs Overdraft](https://www.cashbookfinance.co.uk/insights/invoice-finance-vs-overdraft) - [Invoice Finance vs Business Loan](https://www.cashbookfinance.co.uk/insights/invoice-finance-vs-business-loan) - [Invoice Factoring vs Invoice Discounting](https://www.cashbookfinance.co.uk/insights/factoring-vs-invoice-discounting) - [Selective vs Full-Ledger Finance](https://www.cashbookfinance.co.uk/insights/selective-invoice-finance-vs-full-ledger) - [Trade Finance vs Invoice Finance](https://www.cashbookfinance.co.uk/insights/trade-finance-vs-invoice-finance) - [Bridging Finance vs Development Finance](https://www.cashbookfinance.co.uk/insights/bridging-finance-vs-development-finance) - [Bridging Finance vs Commercial Mortgage](https://www.cashbookfinance.co.uk/insights/bridging-finance-vs-commercial-mortgage) - [Bridging Finance Costs Explained](https://www.cashbookfinance.co.uk/insights/bridging-finance-costs-explained) Check eligibility · About 2–3 minutes, no credit search. ### What actually changes invoice finance cost. Primary driver **Debtor quality** Established customers with clear payment history usually strengthen pricing. Evidence driver **Invoice evidence** Clean delivery evidence and low disputes improve the case. Main watch-out **Service level** Comparing headline rates without service scope is misleading. What actually changes invoice finance cost | Cost driver | Usually stronger when | Watch-out | | --- | --- | --- | | Debtor quality | Established customers with clear payment history usually strengthen pricing. | Weak, concentrated or hard-to-contact debtors increase risk. | | Invoice evidence | Clean delivery evidence and low disputes improve the case. | Missing proof, [credit notes](https://www.cashbookfinance.co.uk/insights/invoice-finance-glossary#term-credit-note) and disputes can reduce availability. | | Facility use | Regular, predictable use is easier to price. | Irregular emergency use is usually harder to assess. | | Service level | Factoring support and protection features affect total cost. | Comparing headline rates without service scope is misleading. | ### Invoice finance costs: use the comparison to make a funding decision. A complete cost view separates the [service fee](https://www.cashbookfinance.co.uk/insights/invoice-finance-glossary#term-service-fee), [discount charge](https://www.cashbookfinance.co.uk/insights/invoice-finance-glossary#term-discount-charge) and case-specific costs. #### Service fee Usually linked to turnover or invoices processed and the service level provided. #### Discount charge Accrues on funds actually drawn, commonly by time outstanding. #### Other costs May include setup, audit, legal, minimum-use or specific transaction costs; terms must state them clearly. Examples are educational only. Eligibility, pricing, security and final terms always depend on a formal assessment of your business, your documents and the facility proposed. **Cashbook lending perspective: the cheapest headline rate is not necessarily the cheapest facility once availability, service fees, minimums and actual drawdown are considered.** [Invoice finance](https://www.cashbookfinance.co.uk/invoice-finance) · [Pricing & decisions](https://www.cashbookfinance.co.uk/pricing-decisions) · [Eligibility](https://www.cashbookfinance.co.uk/eligibility) · [Case studies](https://www.cashbookfinance.co.uk/case-studies) Worked example ### What one invoice actually costs. A £50,000 invoice on 30-day terms, funded at 90%. The charge is about the time the money is out, so the same invoice costs twice as much if the customer takes twice as long. Check eligibility · Talk it through with a director | Invoice value, on 30-day terms | £50,000 | | --- | --- | | Advanced within 24–48 hours (90%) | £45,000 | | Discount charge, about 2% per 30 days, for 30 days | £1,000 | | Paid to you when your customer pays | £4,000 | | Total cost of funding this invoice | £1,000 (2% of the invoice) | | If your customer pays 30 days late | +£1,000 in charges | Illustrative: up to 90% advanced and a discount charge of about 2% of the invoice per 30 days. Rates, advances and any service fee vary by business, sector and customers, and are confirmed in writing before you commit. ### What actually drives invoice-finance pricing? Cashbook Finance looks beyond a headline percentage. Pricing and availability are shaped by debtor quality, concentration, invoice values, payment terms, dilution or disputes, service level, expected utilisation and the amount of operational work required to manage the facility. The cheapest-looking rate is not necessarily the lowest total cost if availability is weak or collections deteriorate. Check eligibility · About 2–3 minutes, no credit search. #### Official sources - Bank Rate · Bank of England Official guidance and legislation on the rules this page refers to. They explain the rules in general; take advice on your own position. ### More guides on invoice finance - [Recourse vs non-recourse invoice finance](https://www.cashbookfinance.co.uk/insights/recourse-vs-non-recourse-invoice-finance) - [Single invoice factoring](https://www.cashbookfinance.co.uk/insights/single-invoice-factoring) - [Supply chain finance vs invoice finance](https://www.cashbookfinance.co.uk/insights/supply-chain-finance-vs-invoice-finance) - [What makes a debtor ledger attractive](https://www.cashbookfinance.co.uk/insights/what-makes-a-debtor-ledger-attractive) - [Why invoice finance applications are declined](https://www.cashbookfinance.co.uk/insights/why-invoice-finance-applications-are-declined) - [Working capital benefits](https://www.cashbookfinance.co.uk/insights/working-capital-benefits) --- Cashbook Finance. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Company number 10723098. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Registered with the Information Commissioner’s Office under reference ZB545200. All finance is subject to eligibility, satisfactory due diligence, credit approval and agreed terms. Invoice finance, trade finance and bridging finance may not be suitable for every business. The availability, structure, amount, pricing, fees, security requirements and completion timescales of any facility will depend on the applicant’s circumstances, the quality of the supporting evidence provided and our assessment of the proposed transaction. Any figures, examples, rates or timescales shown on this website are for illustrative purposes only and do not constitute an offer, commitment or guarantee of finance. Terms and conditions apply. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Applicants should obtain independent legal, financial and tax advice where appropriate.