Paragon Bank Invoice Finance

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How invoice financing works

1
The order
Create an invoice for your customer, showing how much is owed to your business and when payment is due.
2
Cash advance
Send a copy of the invoice to a lender to release up to 100% of its value as a cash sum.
3
Repayment
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.

Paragon Bank Invoice Finance FAQs

Who is Paragon Bank?

Paragon Bank PLC is a specialist lender of personal and commercial funding options. Established in 1985, they provide a wide range of funding services to UK businesses including asset finance, property development loans and structured lending solutions.

What is Paragon invoice financing?

Invoice financing is a financial product that Paragon and a number of other providers offer businesses who require cash injections when their existing cash flow is insufficient. Businesses sell their invoices, which act as collateral, while providers offer a percentage of their value to be borrowed.

Why would a business require invoice financing?

Businesses might require invoice financing from Paragon or a comparable provider if they face issues such as late payments and have a pressing need for cash flow to finance investment in machinery, infrastructure or staff.

Is invoice financing a form of debt?

While invoice financing allows a business to borrow, it is not a form of debt, as it’s actually a sale. Your invoices serve as collateral which you sell to your provider or factoring company. There’s no new debt created, as your invoices can be leveraged at will. As a result, it takes much less time to borrow against invoices, than it does to apply for a conventional loan.

Does invoice financing include some fees?

Yes, invoice financing providers such as Paragon typically require some kind of lender’s fee for using these kinds of facilities. The fee rarely exceeds a small percentage of the total sum you intend to borrow against invoices unpaid or outstanding.

Where can I compare the best invoice financing products?

Touch Financial is a useful platform for comparing Paragon invoice financing products with those offered by comparable providers. Simply fill in a form or give them a call and one of Touch Financial consultants will help you find the best invoice financing match for your business. See the top of this page for more details.

Do small businesses find it harder to acquire invoice financing?

Some smaller businesses may be at a disadvantage when seeking invoice financing. Providers such as Paragon might require a business to have a level of turnover beyond what they are currently earning, or for them to have been operating for a minimum period of time that exceeds the age of their business.

Can I be held liable if clients fail to pay invoices?

You might find yourself liable for failed invoice payment, but only if you signed a recourse clause when using invoice financing facilities. This makes you responsible for absorbing all risks and costs. Always check terms and conditions before agreeing to any invoice financing facility.

How do I protect myself from failed invoice payment?

Providers such as Paragon may provide a non-recourse mechanism, which protects you from the risks and costs associated with failed invoice payments from clients. These may carry higher fees and costs, however, as providers will wish to compensate for the higher risk they would be taking.

Can invoice financing be done discreetly?

Yes. Paragon and a number of comparable providers offer the option of invoice discounting. This makes you the go-to person, responsible for collecting your own invoices and adding them to the sales ledger, ensuring that no third party or provider needs to liaise with clients.

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

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