Selective invoice finance – Flexible cash flow without long contracts
Struggling with cash flow while waiting for customers to pay? Selective invoice finance lets you release funds from individual invoices - no need to commit your whole sales ledger. It’s flexible, fast and puts you in control.
Funding Options by Tide works with 80+ UK lenders and has helped 17,000+ businesses secure over £1bn. Compare selective invoice finance options in minutes.
What is selective invoice finance and how it works
What is selective invoice finance?
Selective invoice finance, sometimes called spot factoring or single invoice finance, is a short-term facility where you raise money against one or more specific unpaid invoices.
The lender advances you most of the invoice value (typically 70–90%). When your customer pays, you receive the balance minus fees and charges.
This approach is useful if you only occasionally need support, or want to avoid a full invoice finance agreement.
How does selective invoice finance work?
Your business issues an invoice to a customer.
You choose to fund that specific invoice.
The lender verifies the invoice and advances up to 90% of its value.
When the customer pays, the lender forwards you the remaining balance minus fees.
It’s quick to set up and doesn’t require you to finance every invoice.
When is selective invoice finance useful?
Selective invoice finance can help businesses that:
Experience seasonal fluctuations and only need cash flow support occasionally.
Want to take on a large order but need upfront cash to cover supplies.
Face long payment terms from specific customers.
Prefer not to commit to a full invoice discounting or factoring arrangement.
Benefits and considerations
Benefits | Considerations |
Flexibility – choose only the invoices you want to fund | Fees may be higher per invoice than long-term facilities |
No ongoing commitment or long contracts | Lenders may have minimum invoice values |
Improves short-term cash flow quickly | Customers may be aware if lender manages collections |
Helps small businesses or startups take large orders | May require stronger credit control on your side |
Selective invoice finance vs traditional invoice finance
Traditional invoice finance (factoring or discounting)
It involves funding all or most of your sales ledger on an ongoing basis.
Selective invoice finance
It lets you hand-pick which invoices to fund, giving more flexibility but sometimes at a higher cost.
It’s a good option if you only need occasional support, while traditional facilities suit businesses with regular cash flow gaps.
Example scenarios
Recruitment agency
Covers payroll while waiting for payment on one large client invoice.
Wholesale supplier
Funds a single invoice to purchase stock for a seasonal order.
Creative agency
Bridges cash flow during a big project until a major invoice is settled.
How much does selective invoice finance cost?
Fees are usually a percentage of the invoice value plus service charges. Costs vary depending on:
Invoice size and customer reliability
Your trading history and credit profile
How often you use the facility
Compare costs carefully to ensure the benefits outweigh the fees.
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Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
FAQs on selective invoice finance
What’s the difference between selective invoice finance and invoice factoring?
Factoring usually involves funding your whole ledger and the lender may manage collections. Selective finance is on specific invoices you choose. See invoice factoring.
Do I need to fund all my invoices?
No. You can pick individual invoices, making it more flexible than invoice discounting or factoring.
How quickly can I get funds?
Lenders often advance money within 24–48 hours after invoice verification.
Is it suitable for small businesses?
Yes. It’s popular with SMEs who occasionally need cash flow support.
Will my customer know?
It depends on the arrangement. With some lenders, collections are confidential; with others, your customer pays the lender directly.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda
Business Finance Manager
Vivek is the Asset Based Lending Manager at Funding Options by Tide. Vivek has been in the industry for over 10 years, working for both lenders and brokers. His product specialisms cover Asset Finance, Invoice Finance, Property Finance and structured transactions.