Here at Sorbus Finance, we have helped hundreds of businesses secure funding across our time in business. There is one deep and persistent challenge we see for business owners, that remains rooted across a variety of industries, business size and organisation types, cash flow. Whether you operate a construction firm, care provider, logistics company or as a manufacturer, payment delays and cash flow stress caused by unpaid invoices can stall growth and investment in your business.

With further economic uncertainty heading into 2026, many UK SME’s are utilising invoice finance as a key tool to alleviate the cash flow burden caused by unpaid invoices. Rather than waiting 30,60 or 90 days to receive payment, your business could unlock the immediate working capital it needs from your sales ledger.

To understand whether invoice finance is a suitable for your business, it is important to understand the different types of invoice finance, if your business might be eligible and how to identify a lender who is aligned with your goals.

What Is Invoice Finance?

Invoice Financing is a flexible funding solution that allows businesses to access the money owed to them through Unpaid Invoices before their customers pay.

Here’s how it works:

You deliver goods or services and issue an invoice to your customer.
Instead of waiting for payment, you send that invoice to your finance provider.
The provider releases up to 90% of the invoice value, often within 24 hours.
Once your customer pays, you receive the remaining balance, minus a small fee.

This process transforms your Unpaid Invoices into immediate Working Capital, giving you the liquidity you need to keep operations moving smoothly.

Is Invoice Finance a Smart Move For My Business?

In a recent report by COFACE, the trade credit insurance and business information provider, it has been identified that 90% of UK businesses reported facing late payments over the last 12 months, with the average payment delay standing at 32 days and only a minority of businesses expecting late payments to decrease heading into 2026. If this sounds like a common theme for your business and your working capital, invoice finance may be an option for you to consider. It is important to note, that invoice finance is not just a mechanism for businesses facing financial pressure or distress over late payments, it is also leverage by businesses looking to fund future growth.

Our case study for a business utilising invoice finance to fund their growth provides a great example of this.

You should also give consideration for the type of invoice finance facility that may align with your business well. With providers offering discounting and factoring options, getting to know these products and the different expectations of your business from a credit control perspective is important. To understand more, we have a downloadable complete guide to help you navigate these questions.

The Hidden Cost of Unpaid Invoices

Late payments are more than an inconvenience, they are a threat to business continuity. Recent research has shown that small and medium sized UK businesses are owed over £20 billion in Unpaid Invoices at any given time.

This unpaid money sits idle, reducing liquidity and limiting your ability to reinvest. The result?

Missed supplier discounts
Delayed payroll
Slower growth
Increased debt reliance

If this sounds like a common issue in your business, the key question to consider is:

“Would having access to 70-90% of my sales ledger upfront remove these issues in my business?”

How Do I Identify The Best Invoice Finance Facilities & Best Invoice Finance Providers?

This sounds tricky right? With hundreds of finance brokers and lenders offering invoice finance as a solution, it may seem almost impossible to figure out which invoice finance lender and facility is right for you.

At Sorbus Finance, our team work through key questions to identify lenders that may be suitable for your facility. We base this upon key information such as:

What % of your invoice do you need to unlock upfront?
Do you want to retain credit control or have the lender lead with this?
The size of the sales ledger you are looking to finance.
Can smart technology provided by some lenders, remove hours from your credit teams administrative duties.
The industry you operate in.
The type of lender that works well with your organisation structure.

Types of Invoice Finance

As mentioned earlier, there are two main types of Invoice Financing, and the right choice depends on your business model and preferences for managing customer relationships.

1. Invoice Factoring

With factoring, your finance provider manages the collection of Unpaid Invoices on your behalf. This is ideal if you want to outsource credit control and focus on operations.

Benefits:

Immediate Working Capital release
Professional management of debtor collection
Reduced administrative burden

2. Invoice Discounting

This option gives you control over your customer relationships while still unlocking Working Capital from Unpaid Invoices. You handle collections, and your customers may not even be aware you are using finance.

Benefits:

Confidential funding
Maintained client relationships
Flexible access to capital based on turnover

Let’s See How Invoice Finance Could Work For A Small Business

Let’s look at a practical example.

A facilities management company is consistently waiting 60 days to receive payments from corporate clients. This delay created strain on payroll and supplier payments. By adopting Invoice Financing, they can release 85% of their Unpaid Invoices immediately.

Within the first quarter:

Their Working Capital could increase by 30%.
They could reduce reliance on overdrafts by 50%.
The business reinvested in staff training and new contracts.

How Can Stable Working Capital Help My Business?

This might sound like a daft question right? But it is important to look at the practical side of what businesses look like that can manage their cash flow effectively. Businesses with stable Working Capital can:

React quickly to new contracts or supply chain demands
Negotiate better supplier terms
Avoid costly short term borrowing
Maintain steady cash reserves

Invoice Financing directly enhances Working Capital by transforming receivables into real time liquidity, a vital advantage heading into 2026.

Other Things For You To Consider:

Invoice Finance might sound great to help build your working capital. However, there are some key considerations you should make first before committing to a facility. There are free things you can do in your business to boost working capital and cash flow too.

Are you on top of credit control? If you are frustrated at clients not paying you on time or within agreed terms, the easiest solution is often overlooked. Do you have a good process in place to chase outstanding debts? Do your customers know their terms. Likewise, is your invoicing process water tight? If you have errors in your invoicing it may be why your invoice isn’t being paid.

Re-negotiate your terms. If you feel like payment terms are holding you back, speak to your clients about it. If you can make a small change, say taking payment terms from 45 days to 30 days, this could be the difference between those end of month payroll concerns being met.

Combining Invoice Finance with Other Funding Options

Invoice Financing can also work alongside other funding strategies, such as:

Asset Finance for purchasing vehicles or equipment.
Trade Finance for import and export businesses.
Overdraft Facilities for additional short term liquidity.

This integrated approach ensures that every area of your business maintains strong Working Capital, supporting sustainable growth.

Why Choose Sorbus Finance for Invoice Finance?

At Sorbus Finance, our team have experience in delivering invoice finance for businesses ranging from start ups to multi-million pound turnovers. We get that invoice finance, in it’s variety of forms, can look differently for everybody. We’re also not going to try and shoe horn you into a facility, with a 1 hour complimentary business review, we’ll tell you if we believe there are other suitable options for you.

Here’s what sets us apart:

Access to a wide panel of trusted funders
Fast approval and same day funding options
Transparent fees and flexible terms
Support for startups and established businesses alike
Dedicated account managers who understand your sector

Whether you are dealing with Unpaid Invoices or planning to expand in 2026, Sorbus Finance can help you unlock the Working Capital your business deserves.

Final Thoughts

In a competitive and uncertain business environment, waiting for customers to pay is a luxury most companies cannot afford. Invoice Financing transforms Unpaid Invoices into cash, giving you immediate access to the Working Capital needed to grow, invest, and thrive.

2026 is the year to take control of your cash flow, not wait for it.

Unlock your business’s potential with Invoice Finance from Sorbus Finance and make 2026 your most empowered year yet.

Take a read at this article addressing how late payments could unlock £112 Billion in cashflow for small businesses.