Invoice Finance for Hospitality

What is hospitality invoice finance?
Hospitality invoice finance is funding secured against unpaid invoices issued by businesses serving the hospitality sector on credit terms, such as contract caterers, food and drink suppliers, hospitality staffing agencies, linen and laundry services and event companies. A funder advances most of each invoice's value, typically 80%–90%, while hotel groups, venues and corporate clients take 30 to 60 days to pay. Businesses selling directly to the public cannot use invoice finance, as it requires business-to-business invoices. See our glossary of invoice finance terms for the language funders use.

First, the honest bit: which hospitality businesses this works for

Invoice finance is secured on invoices issued to other businesses on credit terms. A restaurant taking card payments from diners, or a hotel taking bookings from guests, has no such invoices, so invoice finance is not the tool for consumer-facing venues, and any website telling you otherwise is wasting your afternoon. If that is your business, there are other routes to working capital, and as part of First Oak Capital, a commercial finance brokerage, we can genuinely help with those, so do still call. But if your business supplies, staffs, feeds or builds the hospitality industry and bills it on credit, you are in exactly the right place, because the sector's payment habits make you a textbook case for invoice finance.

The B2B side of hospitality, and its payment problem

Behind every venue sits a supply chain being paid slowly. Contract caterers run kitchens for months between invoice and settlement. Food and drink producers and wholesalers deliver weekly to hotel groups that pay on 60 day terms. Hospitality staffing agencies pay chefs and events crew weekly while client venues pay monthly at best. Linen, laundry and cleaning contractors carry the costs of service long before the invoice clears. Event production companies spend heavily on every job, then wait out corporate payment runs. The pattern is identical across all of them: wages and supplies paid out constantly, revenue arriving in slow, lumpy instalments from business customers. That gap is precisely what invoice finance closes.

How it works for hospitality suppliers

You deliver your service or goods and invoice your business customers as usual. The funder advances the agreed percentage, typically 80%–90%, within about 24 hours, so this week's payroll and purchases are funded by this week's work rather than by money arriving at the end of next quarter. When your customer pays, you receive the balance minus fees. Staffing businesses will recognise the model from recruitment invoice finance, where timesheet-backed invoices attract the best terms in the market, and hospitality staffing sits squarely in that world. Smaller suppliers often choose invoice factoring for the credit control that comes with it, because chasing a hotel group's accounts payable department is nobody's favourite job, while established caterers and wholesalers tend towards invoice discounting, often confidential.

Seasonality, events and the lumpy year

Hospitality's B2B businesses live with a lumpy calendar: wedding season, conference season, Christmas, festival summer. Invoice finance suits that rhythm far better than fixed borrowing, because funding is generated by invoicing. The busy months create more invoices and therefore more funding, exactly when wages and supplier bills peak, and quieter months cost less. For event companies whose pressure is a handful of large jobs a year rather than a steady ledger, selective invoice finance can fund the invoices from individual events without any ongoing commitment.

What funders will look at

Expect interest in who your customers are, since a ledger of hotel groups, contract clients and corporates reads better than one of small independents, in your history of disputes and credit notes, and in any customer that dominates the ledger, a common pattern where one venue group or catering contract anchors the business. Sector appetite varies between funders more than most suppliers expect, which is why matching matters: the difference between a funder who understands catering contracts and one who does not shows up directly in your advance rate and terms.

Why use a broker for hospitality finance?

Because the sector sits in an awkward spot: fundable, but requiring a funder who understands contract billing, seasonality and concentration around venue groups. Some providers handle it well, others price it nervously, and their websites will not tell you which is which. We know the appetite of every provider on our panel, so one conversation puts you in front of the right one or two. Our service is free to use. The provider pays our commission, and we will always tell you that arrangement exists.