Can a New Limited Company Get Invoice Finance?

Why trading history matters so little here

Conventional lenders underwrite the borrower: your accounts, your track record, your serviceability. Invoice finance underwrites the debt: is this invoice genuine, and will the customer behind it pay? A three-month-old recruitment agency invoicing an NHS trust or a national contractor presents the funder with excellent debt, regardless of how young the company raising the invoice is. Your customers' covenant does the work your filing history cannot. That is the entire trick, and it is why our guide to invoice finance for startups and small businesses calls it the funding that judges you on your invoices rather than your past.

What a new company actually needs to qualify

Not much, but the essentials matter. You need to be invoicing other businesses on credit terms, since consumer sales cannot be funded. Your invoices need to be clean: raised after the work is done or goods delivered, backed by a purchase order, signed timesheet or proof of delivery, and free of disputes. Your paperwork needs to be in order, sensible terms of business and accurate records, and funders will run normal checks on the directors. What you do not need is trading history, a strong balance sheet or years of accounts. Sole traders and partnerships qualify too, though this post speaks to the limited company question because it is the one we hear most.

Which type of facility suits a new company

At the new end of the market, invoice factoring is the usual door in, and for good reason: the funder runs the credit control, which a new company rarely has, and professional chasing gets young businesses paid faster than founder-sent reminders ever do. Recruitment startups have an even more complete option, funding with a full back office that handles timesheets, payroll and invoicing from day one, covered on our recruitment page. For companies whose need is occasional, one big customer, one large order, selective invoice finance funds individual invoices with no ongoing commitment. What a brand new company will generally not get is confidential invoice discounting, which requires an established track record, but that is a destination rather than a rejection: start on factoring, graduate later, and we plan that path with clients from the first conversation.

What about the directors' credit history?

Handled honestly: funders will look, but they weigh it far more lightly than a bank would, because their security is your customers, not you. A previous business failure, old missed payments or a CCJ narrow the field of providers and may shade pricing, but they rarely close the door. This has been First Oak Capital's specialist territory for decades, funding for new starts and imperfect credit is the practice, not a sideline, and knowing which providers genuinely welcome that profile is precisely why being matched first time matters more than anywhere else. You can verify our FCA authorisation on the FCA register (FRN 984955).

A realistic example

A limited company forms in March and wins a supply contract to a national builders' merchant, invoicing £40,000 a month on 60 day terms. By May the company has £80,000 outstanding and a wage bill it cannot comfortably meet, the classic growth squeeze. A factoring facility set up in week two of trading would have advanced roughly 85 per cent of each invoice within a day of raising it, about £34,000 a month arriving as earned rather than two months late. Same company, same contract, entirely different months. Try your own numbers in the working capital calculator.

How to set it up, and the mistakes to avoid

Setting up takes one to three weeks: application, checks, verification of a sample of invoices, then live funding. The avoidable mistakes are applying to the wrong funder first, since a decline helps nobody and providers differ enormously in their appetite for new companies, agreeing a facility shaped by minimum fees a small ledger cannot justify, and signing contract terms nobody read. All three are solved the same way: compare before committing. We know which providers on our panel welcome new limited companies, how each prices them and where the small print bites, and our matching service is free to use.

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