Structuring a £100k to £250k invoice finance facility
Characteristics of a £100k - £250k facility
Factoring dominates
Disclosed factoring is the standard product, providing both cash and outsourced credit control.
High growth potential
Lenders look for rapidly growing businesses that will quickly scale the facility limit upward.
Director guarantees
Personal Guarantees (PGs) are standard practice to secure the facility alongside the debenture.
Navigating the transition to whole-ledger funding
For businesses seeking £100k to £250k, this is often their first experience with whole-ledger finance. You are transitioning from funding cashflow via ad-hoc overdrafts or spot factoring into a structured, revolving facility.
At this stage, lenders are evaluating:
- Ledger spread: Do you have 10-20 regular customers, or are you entirely reliant on one major contract?
- Systems: Are you using professional accounting software (Xero, Sage) to raise and track invoices accurately?
- Paper trail: Can you provide clean proof of delivery or signed timesheets for the work you invoice?
Key planning considerations
Minimum fee traps
Ensure the minimum annual fee aligns with your realistic turnover. Don't accept a high minimum fee based on overly optimistic sales forecasts.
Concentration limits
If one client drives 50% of your revenue, ensure the lender agrees to a high concentration limit, otherwise half your ledger will be unfunded.
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Frequently asked questions
Common questions from UK businesses about £100k - £250k facilities.
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