Barclays invoice finance: features, how to apply and alternatives

Invoice finance is an increasingly popular facility for businesses that want to ease regular cash flow problems, often provided by alternative finance lenders. However, Barclays is one of several high street banks that offer its own solution. 

We discuss the features and benefits of Barclays’ invoice finance solution, how it works and the key considerations for businesses looking to unlock cash tied up in client invoices. 

What Barclays invoice finance offers

Barclays helps businesses free up funds for operational needs with invoice financing, advancing a large proportion of the value of new invoices raised. Barclays invoice finance is a confidential discounting solution, meaning those clients whose invoices you’re advancing aren’t aware of it.

The bank previously provided both invoice discounting and factoring, but as of 2021, it no longer offers invoice factoring.

Key features of Barclays invoice discounting

• You could receive up to 90% of your invoices’ value in advance

• Once invoices are approved, you can receive funds in as little as 30 minutes

• An online portal lets you view your sales ledger status and electronic payment requests

• The invoice discounting offered is available in several currencies and can include receivables issues to overseas buyers

• Optional bad debt protection is available to cover you against risks of non-payment

Benefits of using confidential invoice discounting

• Discretion: As a confidential invoice finance solution, Barclays’ invoice discounting is discreet, meaning the process isn’t disclosed to your clients.

• Speed: The solution offers rapid access to funds owed, reducing the impact of slow customer payments. However, expect a little time upfront to set up the facility.

• Cash flow support and growth: You’ll get fast access to funds to minimise cash flow issues and increase business agility so you can grasp new growth opportunities.

• Lower risks: Barclays’ bad debt protection, if required, covers the risk of non-payment, especially considering chasing invoices remains in your court.

Service costs and flexibility

Barclays doesn’t advertise specific costs and rates, as they vary depending on several factors, such as your sector, invoice volumes, turnover and client creditworthiness. However, you can expect to pay nominal service charges (as you remain the creditor) and interest on the advance, referred to as a discount rate in invoice discounting. 

Across the UK market, provider discount rates are usually 1.5–5% above the Bank of England base rate, with high street banks like Barclays often able to offer rates at the lower end. Rates do vary by lender and it is important to conduct your own market research to find the right solution for your business.

While Barclays’ invoice discounting is whole ledger financing, larger organisations can apply for selective receivables financing through Barclays corporate banking’s working capital solutions.

As this isn’t a factoring service, you’ll still be responsible for chasing customer payments, which will be paid to Barclays (but without the customer being aware of the facility).

*You’ll learn more about the actual fees you’ll pay and the rate of interest involved when you apply for Barclays’ invoice finance facility, or when enquiring directly with Barclays.

How invoice finance typically works

Invoice financing is a handy way to get money early from unpaid receivables, rather than waiting for customer payments to hit your account. This eases cash flow issues caused by late payments or lengthy payment schedules, which many UK businesses may face. 

You essentially give up a very small percentage of the invoice’s total value in exchange for getting an advance payment.

Types of invoice finance and how they differ

While the mechanics of invoice finance sound simple, the process varies depending on the lender and whether you use invoice factoring or discounting facilities. 

Let’s explain the difference between invoice factoring and discounting.

Invoice discounting vs factoring

If you choose an invoice discounting provider, like Barclays, you get early access to funds due from unpaid invoices (usually between 70 and 95% of the invoice value) but still collect the payment from your customers, often requesting money to be sent to an account in your name (but assigned to the finance provider).

When the customer pays, the lender keeps what they advanced to you and sends you the remaining amount minus the discount and service fees. Normally, this happens behind the scenes, without your customer being aware of the facility. 

Withinvoice factoring solutions, the finance provider (or the “factor”) essentially buys your invoices and acts as the creditor, assuming collection and chasing duties. The factor gives you an advance upfront (generally 80–90%) then sends you the remaining balance (minus service and collection fees) once they receive the payment. 

Learn more about the differences between invoice factoring and discounting to see which might be a better option for your business. How much you’ll receive for the invoice will vary by lender. It is important to conduct your own market research to find the right solution for your business. Funding Circle does not provide financial advice. 

Things to weigh before choosing an invoice finance provider

Barclays is one of several banks offering invoice finance solutions. HSBC, Lloyds, Metro Bank and NatWest also provide facilities, as do numerous alternative lenders, such as Aldermore, Bibby Financial Services, Close Brothers, Novuna and Kriya. 

Compare the features, benefits and costs of different providers and consider these factors:

• Format: Decide whether invoice discounting or factoring best suits your business, in terms of admin responsibilities, discretion and cost-effectiveness.

• Confidentiality: Invoice discounting solutions typically keep the arrangement private, while most factoring providers deal directly with your customers, so it’s not confidential.

• Eligibility requirements: These vary between lenders, but high street banks tend to be stricter. Eligibility for invoice finance focuses more on your customers’ creditworthiness, but providers still look at your trading history, turnover and other factors, and often have a minimum turnover threshold.

• Costs: Find out the rates and costs involved with different providers, so you can work out how much of your invoices’ value you’ll end up getting. You can usually expect to get a larger proportion of your invoice value overall with discounting solutions.

• Flexibility: This depends on the type of facility you choose, whether it's a confidential form of financing, and whether the provider offers selective invoice finance or whole-ledger solutions (or both).

Alternatives to Barclays invoice finance

Invoice finance is one of several funding solutions designed to help businesses manage cash flow. Alternatives to Barclays invoice finance (and other invoice financing solutions) include lines of credit, business credit cards and merchant cash advances. 

While invoice factoring and discounting are fast, effective ways to access capital for operational needs, they’re limited in that they’re directly tied to your accounts receivable. 

If you want a flexible credit option to ease the impact of slow invoice payments, consider Funding Circle’s FlexiPay solution. Not restricted by upcoming invoices, FlexiPay is a simpler alternative to Barclays invoice financing, offering easy ways to manage expenses without draining cash reserves or changing credit control processes. Simply spread the cost of bills, supplier invoices or large purchases over 1–12 months. Note, 1 month repayment terms on FlexiPay are only available to those who took the facility out post July 2024.

Any cash flow finance solution has pros and cons, so compare the features, benefits and costs of each to see which best aligns with your business needs.

Key features of FlexiPay

• No interest to pay, and no forex fees

• One flat fee from 1.99% per use

• Credit limits of up to £250,000

• Spread payments across 1, 3, 6, 9 or 12 instalments

• Applications take just 4 minutes with near-instant decisions

Learn more about FlexiPay and how it works, and check your eligibility in seconds without impacting your credit score.

Barclays invoice finance FAQs

What is Barclays invoice finance?

Barclays invoice finance is a working capital finance product giving businesses early access to funds tied up in customer invoices. It’s a confidential invoice discounting solution, which means you keep control of the invoice collection process.

The bank gives you an advance of up to 90% of an invoice’s value, then sends you the rest, minus a service fee and discount fee (based on a discount rate applied to the advance amount each day until your customer pays the invoice). 

Other features of Barclays invoice discounting include bad debt protection and options to get funds in several other currencies.

What’s the difference between invoice discounting and invoice factoring?

The main differences between invoice discounting and factoring surround the lender’s level of involvement, service confidentiality and how costs and fees are applied. 

Invoice discounting is typically the discreet option, leaving payment collection to you and meaning customers are unaware of the facility. A discount rate is applied to the advance between the time you receive it and when the customer pays the invoice.

Factoring providers buy your invoices and take ownership of collection, giving you a percentage of invoice values upfront and sending the rest upon receipt of payment, after taking off their fees (typically higher than with discounting).

What turnover do you need for invoice finance?

Unlike most other business finance products, invoice finance eligibility is less focused on your company’s financial performance and more on your clients’ creditworthiness. So, lenders like Barclays will assess the risk of your client base, including their trading history, credit rating, etc. However, they’ll also look at your own situation, and many have a minimum turnover to qualify.

Disclaimer

29/09/26: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.