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Businesses often face cash-flow gaps when customers take 30–90 days to pay invoices. In fact, a recent OECD report found that 41.8% of UK SMEs experienced late payments, squeezing their working capital. Invoice finance is one solution: it lets a business borrow against unpaid invoices rather than wait for payment. Single invoice finance (also called selective invoice finance or spot factoring) is a form of invoice financing that lets you pick and fund one or a few individual invoices on an ad-hoc basis. In other words, you can choose a single unpaid invoice and get cash for it immediately, without putting up your entire sales ledger.
With single invoice finance, you don’t sign long contracts or tie up all your receivables. Instead, you submit a specific invoice (or a small batch of invoices) to a finance provider. The provider conducts a quick credit check and then advances you a large percentage (often 75–95%) of the invoice value immediately. When your customer later pays the invoice, the funder returns the balance to you minus their fees. This flexibility means you only pay fees on the invoices you choose to finance.
For example, a UK Finance report notes that invoice finance supported roughly £313 billion of sales in 2023 (with about £21.2 billion in advances outstanding at end-2024) in part because many firms face cash-flow pressures from late payments.
Single invoice finance lets businesses pick specific invoices to unlock cash instantly, without long-term commitments.
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How single invoice financing works
The process is straightforward and much quicker than a bank loan. First, you raise an invoice to a customer as normal. Then, you submit that invoice to a finance provider (often through an online portal or app). The provider will verify the invoice and your customer’s credit, often within hours. Once approved, the funder advances a percentage of the invoice (typically 80–95%) straight to your account. You can use this cash immediately for any need: paying suppliers, covering payroll, or investing in growth. When the customer eventually pays the invoice to the funder, the remaining balance (minus the finance fee) goes back to you.
This one-off funding is either set up as selective invoice discounting (a confidential loan backed by the invoice) or selective factoring (you sell the invoice to the funder). In discounting, your customer still pays you as usual, and the funder stays invisible; in factoring, the funder collects payment directly but you gain immediate funds. Both work much the same in practice for a single invoice: you get the cash advance fast and repay it once the invoice is settled. Unlike traditional invoice finance, there’s no requirement to finance your entire sales book – you simply repeat the process for any invoice that needs bridging.
Example: a project manager checks an invoice against records on a laptop. With single invoice finance, businesses can release cash from such invoices immediately.
Quick access to cash
Single invoice finance provides immediate cash for specific invoices. You can receive funds as fast as the next business day (some providers promise within 24–48 hours). This quick liquidity means you don’t have to wait 30–90 days for payment. As a result, you can pay ongoing expenses like payroll or suppliers on time. Early access to cash also frees up your capital to seize growth opportunities sooner (e.g. hiring staff or buying stock).
Flexible and commitment-free
Since single invoice finance is a “pay-as-you-go” solution, there are no long-term contracts or minimum usage requirements. You only use it when needed. If one large invoice is overdue or an unexpected cost arises, you can tap the facility for that invoice alone, then stop. This contrasts with whole-ledger facilities that lock you in for a year or more. Many providers allow funding of invoices from as low as £2,000 (or even less), so smaller or one-off invoices can qualify. Because of this flexibility, single invoice finance is often favoured by SMEs and project-based businesses that don’t want continuous borrowing.
Control and confidentiality
When you finance individual invoices, you retain control over your customer relationships and credit control. You decide which customer invoices to fund, avoiding any that might be risky. In discounting arrangements, customers don’t even know you used a funder; they continue paying your business as usual. This confidential option can preserve goodwill, since some clients see factoring as a sign of financial trouble. Even in factoring (where the funder collects payment), most providers treat customers gently. In all cases, you can outsource late-payment chasing to the funder if you wish, saving you admin time.
Suitable for high-margin projects
Selective invoice finance is especially valuable when you have a large, one-off project or irregular billing cycle. For example, imagine a UK construction company working on a huge project with one single invoice. If a client delays this payment, the company could use single invoice finance to cash that invoice immediately. This one-shot funding lets them proceed without waiting or straining the client relationship. Similarly, high-value project-based sectors (like construction, IT services or manufacturing) often rely on SIF to bridge cash until client payments arrive. In essence, any business with seasonal or lumpy income can use this tool to smooth out cash flow without over-borrowing.
Cost and considerations
Single invoice finance is powerful but not free. Providers charge fees for the service, which may include an administration fee plus an interest/discount rate on the advance. Typical combined fees can range from 10% to 20% of the invoice value (for example, a 2–5% monthly rate plus a flat service charge). Because you fund invoices on an ad-hoc basis, the headline rates can be higher than bulk facilities.
However, it may still be cheaper overall if you only need occasional funding; you won’t pay for unused credit lines. Some lenders offer “non-recourse” insurance (bad-debt protection) if a customer doesn’t pay, but this is rarer and more expensive. In most cases, the business must repay the advance even if the customer defaults (recourse funding).
Another consideration is eligibility. Single-invoice funders generally require that debtors are creditworthy (i.e. reputable companies) and that invoices are for B2B goods or services. They may also prefer invoices above a certain size (often a few thousand pounds) to justify processing costs.
Finally, although SIF doesn’t affect your personal credit, it does incur a liability on your balance sheet until repaid. Businesses should also avoid over-reliance: it’s better to solve chronic payment delays than depend indefinitely on invoice finance.
Who can benefit from single invoice finance?
Selective invoice finance suits businesses that temporarily need cash rather than ongoing funding. Typical users include:
SMEs and start-ups with limited borrowing history
They may struggle with bank loans, but can fund a few invoices as long as their customers are creditworthy.
Project-based firms
For example, agencies, consultancies or developers with sporadic high-value invoices (like the ERP and software examples above).
Seasonal businesses
Companies that experience big swings in cash needs (e.g. retail before holidays) can use it during peak inventory purchases.
Companies with slow-paying clients
If most customers pay late or have 60+ day terms, single-invoice finance lets you bypass the wait for one-off payments.
Even larger firms occasionally use it for special circumstances, such as awaiting a delayed payment on a big contract but needing funds immediately. That said, if your cash flow needs are constant and high, a whole-ledger invoice finance or overdraft facility might be more cost-effective.
Case study
A UK manufacturing company had a client invoice for £50,000 that was due in 60 days. Needing £40,000 urgently to pay suppliers, the company used single invoice finance. The funder advanced 85% of the invoice within 24 hours, enabling the business to cover its immediate bills and complete the project on time. When the customer paid the invoice, the funder remitted the balance (minus a pre-agreed fee) back to the manufacturer. This avoided any late penalties and allowed the supplier relationship to continue without disruption.
Getting started and finding providers
Single invoice finance is offered by many specialist providers (often fintech platforms) as well as traditional factoring firms. Rise Funding’s invoice finance marketplace connects businesses with lenders that offer both whole-ledger and selective invoice finance. (See our invoice finance guide for background on this type of financing.)
Because invoice finance is largely unregulated, transparency is key. Look for providers that clearly state their fees and whether you will remain liable if a customer doesn’t pay. Brokers like Rise Funding can help businesses compare offers and find suitable lenders. Ultimately, single invoice finance is a fast, flexible way to plug a cash-flow gap without long-term debt – especially useful when one large unpaid invoice is blocking your next business move.
For more details on invoice financing options, see Rise Funding’s guides on how SMEs can use invoice financing and invoice finance basics.
