Home / Homecare guides / Homecare invoice factoring in the UK
What is invoice factoring?
Invoice factoring is a form of invoice finance in which a finance provider advances an agreed proportion of eligible business invoices and ordinarily manages collection. Invoice discounting differs because the company typically keeps managing its own collections.
Example: how funding works
If £100,000 of invoices are eligible and a provider advances 80%, the initial advance might be £80,000. The remainder is settled, less charges and any other adjustments, when customers pay. This is an illustration, not an Vendraa offer.
Key checks for homecare operators
- Are invoices addressed to businesses or public bodies and legally assignable?
- Do local authority, NHS or other contracts restrict assignment?
- Are invoices disputed, aged or subject to deductions?
- How concentrated are debtors and how reliable is payment history?
- Who will manage collections and how will clients be notified?
- What are the total service charges, discount charges and recourse terms?
Factoring versus discounting
With factoring, the finance provider generally takes a role in credit control. With discounting, you generally retain collections, though terms vary. The British Business Bank provides an independent explanation of both options.
Independent information
Read the British Business Bank guide to invoice finance for a general UK overview. Vendraa has not claimed to provide invoice finance itself.
Frequently asked questions
Is invoice factoring suitable for domiciliary care?
It can be suitable where eligible invoices are owed by creditworthy trade or public-sector debtors and contractual restrictions allow it.
Will customers know I use factoring?
In many factoring arrangements, yes, particularly where the provider collects payments directly.
Does invoice finance create debt or obligations?
The legal and financial arrangements vary. Review recourse, charges, security and the treatment of unpaid invoices with an independent adviser.
Talk to Vendraa
We help owners of UK homecare and domiciliary care companies understand their options, prepare information and explore an informed sale. Funding enquiries are considered separately and no finance facility is guaranteed.
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