Barclays Invoice Finance

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How invoice financing works

The order
Create an invoice for your customer, showing how much is owed to your business and when payment is due.
Cash advance
Send a copy of the invoice to a lender to release up to 100% of its value as a cash sum.
When it is due, the lender receives the payment from the customer. The lender then sends your business any remaining amount on the invoice that wasn't originally financed, after deducting the prearranged fees.

This comparison service is provided by Touch Financial. Touch Financial is a finance broker, not a lender. Not all products offered by Touch Financial are regulated by the Financial Conduct Authority. They compare invoice financing services from a range of different lenders, aiming to find the one that best suits the needs of their business customers. Touch Financial consultants look at the profile of each business, including cash flow, accountancy needs, and any other specific requirements, to match them with the most appropriate invoice finance provider and product. Touch Financial is authorised and regulated by the Financial Conduct Authority (FRN:727220).

Last updated on 12 May 2022.

Barclays Invoice Finance FAQ

How do I do invoice financing?

If you’re running a business and wish to invest money back into it, Barclays invoice financing products can allow you to borrow against invoices you hold from customers.

Is invoice financing a form of business loan?

Not quite - while business loans often entail a lengthy application process and much paperwork to borrow a sum, invoice financing with Barclays or other providers can be much quicker, as you’re simply borrowing against your own existing invoices, proof that you are likely to have the means to pay back any financing you apply for.

Do smaller businesses struggle to do invoice financing?

Invoice financing can prove difficult for smaller businesses, if they are unable to meet specific criteria set by lenders. For example, a lender might require your business to have been running for a minimum period of time to mitigate their potential risks, or have an annual turnover above a certain threshold, which excludes smaller, less mature businesses.

How quickly can I get cash flow?

Invoice financing products from Barclays and a number of other lenders are capable of providing your business with the cash flow it might need within hours or days. At most, it might take a few weeks.

What is a major benefit of using invoice financing?

Businesses have fluctuating needs, depending on the season, their age, and growth strategies. Cash flow can be volatile over the year, and Barclays invoice financing can be available at short notice, either through borrowing against unpaid or outstanding invoices.

What’s the best way to compare invoice financing products?

Touch Financial is able to help you determine whether Barclays invoice financing is right for you, or whether you would be better suited in approaching another lender. Follow the instructions at the top of the page and a specialist consultant will be available to help put you through to the best match, depending on the costs involved and your requirements as a business.

What is invoice factoring?

Invoice factoring is just one of the forms of invoice financing Barclays provides. It entails the selling of invoices to a third party, known as a factoring company, via your provider. The factoring company is made responsible for chasing up your clients, to retrieve the invoices, while the provider starts lending to you.

What happens when invoices aren’t paid?

Invoice factoring allows you to borrow against unpaid invoices - however, it’s important to be mindful of potential costs, especially if you’ve signed a recourse agreement with your lender.

Is there a difference between recourse and non-recourse agreements?

A recourse agreement makes you liable if clients ultimately fail to pay invoices, which could seriously impact your business finances.

Non-recourse agreements mean you won’t be liable in the event of failure to pay by customers, while still allowing you to borrow the amount you requested.

Will invoice factoring affect my credit score?

No, invoice factoring counts as a sale (of your invoice) rather an actual loan, so provided that your customers pay invoices and your accounts are in order, your credit score won’t be impacted in any way.

How do invoice financing charges work?

Invoice factoring means being charged on a weekly or monthly basis, at a percentage of the invoice value, but this is rarely at a rate of more than 5% with most lenders.

How does invoice discounting differ from invoice factoring?

Invoice discounting is simply a more discreet way of carrying out Barclays invoice financing. Rather than having a factoring company liaising with your clients over the invoices, you take charge, and stay in control of administration of the sales ledger. Your client will only learn about leveraging of invoices if you tell them yourself.

Does invoice discounting carry lower fees?

Yes, the fees associated with borrowing against outstanding invoices can be lower than for those from borrowing against unpaid invoices, as you will be responsible for collecting and managing the debts of your clients yourself. Fees for invoice discounting are normally half those for invoice factoring, so are more suitable to businesses with less lucrative invoices.

Services offered by this provider may change over time. Always check Ts&Cs.

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