Single Invoice Finance is a great option if you only have the occasional requirement to release cash tied up in an invoice. It’s a less formal arrangement without the requirement to sign a long-term contract, and it can be used as and when you need it.

Typically, a single invoice finance company will include bad debt protection in their fixed fee and won’t require a personal guarantee. They will base their lending decision on the strength of your client’s creditworthiness, removing the need for you to put up your personal assets as collateral.

Single Invoice Finance vs Spot Factoring: Is There a Difference?

In practice, not really. Single invoice finance, spot invoice finance, spot factoring and selective invoice finance are often used to describe the same thing: funding one invoice, or a handful of chosen invoices, rather than your entire debtor book.

The main difference is between single invoice finance and a whole-turnover facility. With whole-turnover invoice factoring or invoice discounting, you fund all of your eligible invoices on an ongoing basis, usually under a contract with a minimum term. Single invoice finance gives you the choice: you decide which invoice to fund and when.

How Single Invoice Finance Works

1. You raise an invoice to a creditworthy business customer.
2. You choose to fund it – tell us about the invoice, the customer and the payment terms.
3. The funder assesses your customer, focusing mainly on their credit strength rather than your personal assets.
4. You receive an advance, typically up to 80–90% of the invoice value, often within a few days of approval.
5. Your customer pays the invoice on their normal terms.
6. You receive the balance, less the agreed fee.

There is no ongoing commitment. Once the invoice is settled, you are free to use the facility again – or not at all.

How Much Does Single Invoice Finance Cost?

Single invoice finance is usually charged as a fee per invoice rather than an ongoing service charge. As a guide:

• New start companies and smaller invoices: fees are typically around 3–3.5% of the invoice value.
• Businesses with a turnover above £200,000: fees can come down to around 1.8%.

The exact cost will depend on the invoice value, the payment terms, your customer’s creditworthiness and whether bad debt protection is included. Because of the flexibility it offers, single invoice finance is usually slightly more expensive than a whole-turnover factoring or discounting facility, and in some instances the advance rate may be slightly lower at around 80%.

Is Single Invoice Finance Right for Your Business?

Single invoice finance can be a good fit if you:

• need cash occasionally rather than every month
• have one or two large invoices tying up working capital
• have a slow-paying but creditworthy customer
• have won a large contract and need to fund the upfront costs
• don’t want to commit to a long-term contract or personal guarantee
• want to try invoice finance before considering a full facility

It is generally less suitable if you need funding on every invoice, every month – in that case a whole-turnover facility is usually more cost-effective.

When Should You Move to a Full Invoice Finance Facility?

For many of our clients, single invoice finance is a great way to ‘test the water’ with invoice finance. We constantly review how often you are using the facility and will advise you when the time is right to reduce your fees by moving to a more permanent invoice factoring or invoice discounting facility.

Why Use Wise Factoring for Single Invoice Finance?

There are a growing number of single invoice finance providers in the UK, and their criteria, fees and minimum invoice values vary considerably. With eight years’ experience in invoice finance and access to a wide panel of funders, Wise Factoring can match your invoice and your customer to the funders most likely to offer the right terms, saving you the time of approaching them one by one.

If you are interested in exploring single invoice finance, please get in touch so we can understand your requirements and discuss your options. The pool of funders for single invoice finance is higher for larger invoice values, so it’s important we know the typical invoice value before we recommend any funders.

See our video that explains the difference between Single and Selective Invoice Finance. Please note that since this video was made, more funders have come into this market and fees have come down – typically around 3–3.5% for new start companies and smaller invoices, and around 1.8% for businesses with a turnover above £200,000. The video will still give you a useful insight into how the facilities work.