Can you still obtain invoice finance after another factoring company has declined your application or asked for security you are unwilling to provide? In some circumstances, absolutely.
Wise Factoring recently helped a fast-growing ventilation company secure invoice finance after being declined: a £175,000 facility, agreed after its original application with another invoice finance lender could not proceed on acceptable terms.
The business had secured approximately £600,000 of work in just three months and was forecasting turnover of around £1.5 million.
The opportunity was clearly there.
The challenge was finding the right funder to support it.
The Challenge
The company was relatively young but growing quickly.
It had secured a substantial pipeline of work and needed additional working capital to help bridge the gap between completing work, raising invoices and eventually receiving payment from customers.
Invoice finance appeared to be a natural solution.
However, the first lender approached was unable to get comfortable with the application without additional security, including a proposed legal charge over the director’s home.
The director was not prepared to provide that security.
There was another complication.
The director had previously been involved with businesses that had entered insolvency following the failure of two major customers.
Although there was an explanation behind what had happened and the director had subsequently repaid a previous £50,000 personal guarantee in full, the historic insolvencies inevitably formed part of the underwriting assessment.
For some funders, that combination was outside their appetite.
But different invoice finance companies assess risk differently.
Can You Get Invoice Finance After Being Declined?
Often, yes.
This is one of the most important lessons from this particular case.
An invoice finance decline is the decision of one funder based upon its own credit policy, risk appetite and security requirements.
It isn’t necessarily a judgement on whether the business is fundable across the entire market.
Wise Factoring works with a wide panel of invoice finance lenders, from major banks and established factoring companies through to specialist independent funders.
Our job isn’t simply to submit an application.
It’s to understand the business, understand the reasons behind any complications and identify funders whose appetite is better suited to the circumstances.
Understanding the Story Behind the Application
Rather than focusing solely on the previous insolvencies, we looked at what had actually happened.
The director explained that two significant customers had failed, contributing to the difficulties experienced by the previous businesses.
Importantly, he had also honoured a previous £50,000 personal guarantee in full and had continued assisting with the collection of outstanding debts afterwards.
Meanwhile, the new business was demonstrating significant momentum.
Around £600,000 of work had been secured within approximately three months, with turnover expected to reach approximately £1.5 million.
That created a very different picture from simply looking at historic events in isolation.
The business needed a funder prepared to understand that wider story.
Finding Another Invoice Finance Lender
After the original application couldn’t proceed on acceptable terms, Wise Factoring approached a different invoice finance lender whose appetite we believed was better suited to the case.
We presented the background, explained the circumstances surrounding the previous businesses and demonstrated the opportunity within the current company.
The result was a £175,000 invoice finance facility.
Crucially, this provided the business with the working-capital support it needed without requiring the director to accept the property security requirement that had prevented the original proposal from progressing.
The Result: £175,000 to Support Continued Growth
The new facility gave the company access to up to £175,000 of invoice finance, helping it convert eligible unpaid invoices into working capital rather than waiting for customers to reach their normal payment terms.
For a rapidly growing business, that can make an enormous difference.
Growth often consumes cash before it generates it.
New contracts can mean additional wages, materials, subcontractors and operating costs have to be paid long before customers settle their invoices.
Invoice finance can help bridge that gap.
In this case, being declined by the first lender wasn’t the end of the process.
Securing invoice finance after being declined simply meant finding a funder whose approach better matched the business.
And that’s exactly what we did.
Why Using an Invoice Finance Broker Can Make a Difference
There are many invoice finance lenders operating across the UK and their credit policies can vary considerably.
One lender may be uncomfortable with previous insolvency.
Another may require property security.
Another might have restrictions around particular industries, customer concentrations or the age of the business.
Others may be prepared to take a more detailed view of the circumstances.
This is why, when you are looking for invoice finance after being declined, approaching the right funder can be just as important as the application itself.
At Wise Factoring, we take time to understand the business before deciding which lenders may be appropriate.
Sometimes the difference between a decline and an approval isn’t the business itself.
It’s finding the right home for the application.
Invoice Finance After Being Declined: FAQs
I’ve been declined for invoice finance. Can another factoring company still help?
Potentially, yes.
Invoice finance lenders have different underwriting policies and risk appetites. A decline from one lender does not automatically mean another lender will reach the same decision.
If you are looking for invoice finance after being declined, the important thing is to understand why the original application was declined before approaching another funder.
Can I get invoice finance if I’ve previously been a director of an insolvent company?
Potentially, yes.
Previous company insolvencies will usually be investigated by an invoice finance lender but they do not necessarily prevent a director from obtaining invoice finance for another business.
A funder may want to understand what caused the previous failure, the director’s conduct, whether any personal guarantees remain outstanding and what is different about the current business.
Do I need to be a homeowner to get invoice finance?
No, although it can mean you have access to a wider lending pool on bigger facilities.
Some funders may request additional security depending upon the circumstances of an application but being a homeowner is not universally required for invoice finance.
There are lenders whose underwriting focuses heavily on the quality of the debtor book, customers, invoices and underlying business.
Can an invoice finance company put a charge on my house?
It is very rare for a funder to request additional security such as a legal charge over a property. In certain circumstances such as when there are multiple failed businesses in the background, it can be requested.
If a lender is asking you for this, speak to Wise Factoring and we’ll work with you to assess why they are asking and if there are different options for you to consider.
Why would one factoring company decline me when another accepts me?
Invoice finance lenders have different credit policies, sector appetites, security requirements and attitudes towards risk.
Factors such as previous insolvencies, company age, customer concentration, debtor quality, contractual terms and the director’s background can all be assessed differently.
This means a business that falls outside one lender’s criteria may still fit another lender’s appetite.
Can a new or fast-growing company get invoice finance?
Yes, absolutely.
Invoice finance can be particularly useful for rapidly growing businesses because growth itself can create cash-flow pressure.
A company may have profitable work but still need to pay wages, suppliers and other costs weeks or months before its customers pay.
Some invoice finance lenders will consider relatively young businesses where there is a suitable B2B debtor book and evidence of viable trading.
Can invoice finance help if we’ve won a lot of new contracts?
Yes, it can be the ideal working capital product in this scenario.
Winning significant new work can create a working-capital requirement because the costs associated with delivering those contracts often arise before the resulting invoices are paid.
Invoice finance can allow a business to access an agreed percentage of eligible invoices earlier, potentially providing working capital to support that growth.
How much funding will I be offered?
The amount of funding available will depend on factors including your turnover, debtor book, customer quality, invoice values, payment terms and the particular lender.
The amount available can also grow as your turnover and debtor book increase.
In this case, Wise Factoring arranged a £175,000 facility for a business forecasting turnover of approximately £1.5 million.
Should I apply to lots of invoice finance companies after being declined?
No, don’t waste your time with a spray and pray approach. An experienced brokerage like Wise Factoring will know exactly where to go, saving valuable time and a lot of frustration in the process.
Making multiple applications without understanding why the original lender declined can be counterproductive.
A specialist invoice finance broker can first establish the issues behind the original decision and then identify lenders whose criteria are more closely aligned with the business.
Been Declined for Invoice Finance?
If your bank or a few invoice finance lenders have said no, it doesn’t mean you’ve run out of options.
Wise Factoring has access to a broad range of invoice finance lenders with different underwriting criteria and appetites.
We specialise in understanding more complicated applications and identifying funders prepared to look at the circumstances behind the numbers.
Whether you’ve experienced a previous company insolvency, have been asked for security you don’t want to provide, operate a relatively new business or have simply been declined by another factoring company, there may still be options worth exploring.
Talk to Wise Factoring about your circumstances before assuming the answer is no.
Related services: Invoice Factoring | Invoice Discounting | Single Invoice Finance | Switching Funders
Every application is subject to individual assessment and funder approval. Previous outcomes do not guarantee that funding will be available in other cases.
