What invoice finance actually costs
Two fees make up almost every facility. Six more sometimes get added quietly. Here is the honest anatomy of both.
1.The two core fees
| Fee | What it covers | Typical range |
|---|---|---|
| Service fee | Sales-ledger admin, and on factoring, credit control and collections | 0.2–3.0% of turnover |
| Discount fee | Cost of the funds advanced, charged on drawn balance | Base rate + 1.0–4.5% |
Both scale with how you actually use the facility. A business drawing less of its available headroom pays less discount fee; a book that needs heavier collections work usually carries a higher service fee. Neither is fixed like a loan repayment.
2.The six extras to watch for
None of these are illegal or automatically unfair. The problem is when they are undisclosed, set at a punitive level, or both. “Fair range” below is what a straightforward UK facility typically charges if it charges this fee at all; “red flag” is the level, or the pattern, that should make you ask harder questions before signing.
| Fee | What it is | Fair range | Red flag |
|---|---|---|---|
| Minimum-usage fee | Charged in months you draw less than an agreed minimum | Waived or capped low, disclosed up front | Charged at near-full rate for months of zero usage |
| CHAPS / same-day transfer fee | Cost of same-day payment of an advance | £15–30 per transfer, standard BACS free | Charged on every payment with no free standard option |
| Audit fee | Periodic review of your sales ledger | Annual, modest, scoped in the agreement | Frequent, uncapped, or charged at the provider's discretion |
| Renewal fee | Charged when a fixed-term contract rolls over | None, or small and disclosed at signing | Automatic renewal with a fee buried in page nine |
| Exit fee | Charged for leaving before contract end | Short notice period, no penalty after minimum term | Multi-year lock-in with a steep early-exit penalty |
| Personal guarantee | A director's personal liability backing the facility | Optional, offered where the book alone does not support terms | Required as a blanket condition regardless of book strength |
The facility cost is set out before you sign. If a fee is not on the sheet up front, that is the red flag, not the fee itself.
3.Fee anatomy, visualised
On a typical facility, the discount fee is usually the largest single component of total cost, followed by the service fee. The extras above, when a provider charges the worst version of all of them, can add a meaningful slice on top, illustrated here as the hatched segment.
Illustrative split of total facility cost. Discount fee (funds drawn) is usually the largest slice, service fee (admin and collections) second, and undisclosed extras the segment worth pushing back on.
4.How Done & Due screens for this
We only introduce facilities that set out the full cost before you sign: no hidden fee stack, no multi-year auto-renewing lock-ins, no blanket personal guarantees, and no minimum-usage charges for months you did not fund. See what we don't do for the complete list, and invoice factoring or invoice discounting for a worked example of these fees applied to a real invoicing figure.
Frequently asked questions
A service fee, a percentage of turnover covering credit control and administration, and a discount fee, an interest-like charge on the funds you have drawn, usually quoted as a margin over base rate. Everything else is optional, and worth questioning if a provider tries to charge it.
No, not automatically. An audit fee to verify your sales ledger, for example, is a reasonable control on some facilities. The issue is size and disclosure: a fair provider states these up front at sensible levels, a poor one buries them or prices them punitively.
Ask each provider for the all-in annual cost on your actual invoicing volume, including every fee on this page, not just the headline service and discount fee. A slightly higher headline rate with no extras often beats a low headline rate loaded with add-ons.
No. Done & Due is free to use. We are paid by the funding partner only if a facility completes, and we screen out the fee structures on this page that we consider unfair before a provider ever reaches you.
Two minutes, soft checks only, no impact on your credit score.
See how much you could releaseLast reviewed: August 2026
See how much you could release.
Two minutes, soft checks only, no impact on your credit score.