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Beta · Interactive · Invoice finance

You're the underwriter.

Six UK invoice finance applications. Each one looks like a likely decline — concentration risk, a director's bad history, losses on the books, late filings, sector exposure. Read the pack, make the call, then see how an experienced lender finds the deal underneath the red flags.

A note on the cases. All six borrowers are anonymised composites. Names, directors and identifying details are fictional. Financial profiles, decisions and outcomes are drawn from real UK invoice finance cases.

01

Read the pack

Business, numbers, directors, the ask, and the red and green flags. Same view a credit team would get.

02

Make your call

Approve, refer with conditions, or decline. Set the rate and the structure. Lock it in.

03

See the reality

Real lender's verdict, full reasoning, and the outcome 12–24 months later.

Locked: 0/6 · You'd have funded: 0
Case 047 · Healthcare recruitment · The concentration question

Borrower A · Healthcare Recruitment Agency

Nine-year-old recruitment agency supplying agency nurses to NHS trusts and private care providers across the North West. Asking for £350,000 invoice finance to fund payroll growth.

The business

Sector
Healthcare recruitment
Trading
9 years
Location
North West England
Structure
Ltd, two-director owner-managed
Employees
14 internal · 280 contractors

The ask

Product
Confidential invoice discounting
Limit
£350,000
Term
12-month rolling
Security offered
Debenture, joint PG (uncapped)
Stated purpose
Working capital — fund payroll while debtors pay

The financials

Turnover (FY24)
£4.2m
Trend (3yr)
£3.1m → £3.6m → £4.2m
Gross margin
12%
Net margin
4%
EBITDA
£198k
Net cash
£85k
Debtor days
67
Debtor book
£780k
Top customer
41% (named NHS trust)

The directors

Director A
47, sole shareholder of 60%. No CCJs, no prior insolvencies, clean credit footprint.
Director B
41, 40% shareholder. One dissolved entity (2014, marketing consultancy, voluntarily struck off, no creditor losses).
HMRC
Up to date. No time-to-pay arrangement.

Context & flags

  • NHS framework agreements provide payment certainty — slow, but the cash comes.
  • Customer concentration at 41% to a single NHS trust. Material — needs to be priced, not ignored.
  • Sector tailwind: persistent NHS nursing shortage; revenue trend supports it.
  • Gross margin of 12% is typical for healthcare recruitment but leaves little room for collection delays.
  • No related-party transactions of note. Companies House filings on time.

Your call

What would you do with this application?

Conditions attached

Pick a verdict to continue.
Verdict revealed

What an actual lender did

Your call

—

Real lender's call

Approve
3.2% discount fee + 1.0% service
90% advance rate · 12-month rolling
Debenture + PG capped £75k each director

Why this funds

The 41% concentration to a single NHS trust looks like the deal-killer. For most working capital products, it would be. For invoice finance, it's almost the perfect debtor profile.

  • Concentration is priceable, not declined. An NHS trust is not going to default. The risk is delayed payment — which is precisely what invoice finance solves. A 90% advance rate against a 67-day book lets the business get paid the same day instead of waiting 67.
  • Thin margins improve with the facility. 4% net margin looks fragile until you realise the facility removes the working capital strain that's been holding back growth. Cash conversion is the right KPI here, not P&L margin.
  • Director profile is clean enough. Director B's 2014 dissolved entity was a different sector with no creditor losses. A capped PG (rather than uncapped) recognises this fairly.
  • The debenture matters. First charge across all assets is what gives the lender control if the debtor book ever deteriorates. Without it, this would be a decline.
  • Debtor protection isn't needed here. Non-recourse cover is a standard option lenders offer on IF facilities, but on a debtor book dominated by an NHS trust it would be over-engineering. NHS trusts are statutorily backed — they pay slow, not never. Paying for cover against a risk that doesn't exist is exactly the kind of mis-pricing a careful underwriter avoids.
OUTCOME · 18 MONTHS ON

Performing. Drawn balance averaged £290k. Limit increased to £500k at first anniversary review to support a second NHS contract win.

Case 048 · Mechanical engineering · The director's history

Borrower B · Mechanical Engineering Services

Five-year-old engineering services firm doing mechanical fit-out work for manufacturers and food processors. Asking for £180,000 selective invoice finance to fund materials on a new contract.

The business

Sector
Mechanical engineering services
Trading
5 years (current entity)
Location
Midlands
Structure
Ltd, sole director
Employees
22

The ask

Product
Selective invoice finance
Limit
£180,000
Term
12-month rolling
Security offered
Debenture, PG required
Stated purpose
Fund materials on a new contract requiring upfront purchase

The financials

Turnover (FY24)
£2.1m
Trend (3yr)
£1.5m → £1.8m → £2.1m
Gross margin
28%
Net margin
9%
EBITDA
£210k
Net cash
£45k
Debtor days
52
Debtor book
£310k
Top customer
22% (3-year relationship)

The director

Director
51, 100% shareholder. No current CCJs since 2016. HMRC up to date.
Prior
Previous company (2015) failed in CVL — different sector (construction subcontracting). £230k total creditor loss including £42k HMRC arrears.
Time elapsed
9 years since CVL
Current HMRC
Clean for the 5 years of the current entity.

Context & flags

  • Director's prior CVL involved HMRC creditor loss. Most serious historic issue.
  • Current entity is profitable, growing, and has 5 years of clean HMRC.
  • Diversified debtor book — top customer is 22%, no over-reliance.
  • 5 years trading on current entity is shorter than the typical lender preference for IF.
  • New contract is with an existing customer (3-year relationship), no concentration uplift.
  • Healthy 28% gross margin gives genuine headroom for the structure.

Your call

What would you do with this application?

Conditions attached

Pick a verdict to continue.
Verdict revealed

What an actual lender did

Your call

—

Real lender's call

Refer with conditions
3.5% discount + 1.2% service
80% advance rate · 12-month rolling
Debenture · PG capped £50k · quarterly MI
No related-party loans · dividend restriction

Why this funds, with structure

A director with a prior CVL and HMRC creditor loss is the case most owners assume is unfundable. It isn't — it's the case that requires the underwriter to do their job properly. The question is not "did this person fail" but "what's changed since, and how do we structure around what hasn't".

  • Time and context matter. The CVL was nine years ago in a different sector. People learn. The current entity has 5 years of clean HMRC, healthy growth, and 28% gross margins — that's a track record, not a fluke.
  • Capped PG, not uncapped. A £50k cap reflects the lender's residual concern about the director's history without making the deal unworkable for a sole-director business.
  • Lower advance rate gives the lender headroom. 80% advance versus a typical 85-90% means the lender carries less exposure on each invoice. The borrower pays for this in a slightly higher discount fee.
  • Quarterly MI is structural protection. The lender wants forward visibility, not retrospective reporting. Quarterly is the right cadence — monthly would be over-engineered for a £180k facility.
  • Related-party loan restrictions matter here. In businesses where a director has prior issues, related-party transactions are where the next problem hides. Restricting them up front removes the lever.
OUTCOME · 18 MONTHS ON

Performing. No covenant breaches, no late MI. Director used the cleaner trading record at first renewal to negotiate the discount fee down to 3.2% and the PG cap raised to £75k. The new contract that triggered the funding ask is now the borrower's third-largest customer.

Case 049 · Industrial wholesale · The accounting illusion

Borrower C · Industrial Parts Wholesaler

Twelve-year-old family-owned industrial parts wholesaler. Last year's accounts show a £180k loss. Asking for £400,000 invoice finance to replace an overdraft and fund a new product range.

The business

Sector
Industrial parts wholesaling
Trading
12 years
Location
Midlands
Structure
Ltd, family-owned (father/son directors)
Employees
18

The ask

Product
Whole-turnover invoice finance
Limit
£400,000
Term
12-month rolling
Security offered
Debenture, joint PG
Stated purpose
Replace overdraft (£250k, fully drawn), fund stock for new product range

The financials

Turnover (FY24)
£3.6m
Trend (3yr)
£3.2m → £3.4m → £3.6m
Statutory NM
−5% (£180k loss)
One-off write-off
£290k (obsolete stock)
Adjusted NM
+3% (£110k profit)
Adjusted EBITDA
£248k
Net cash
£18k
Debtor days
48
Debtor book
£475k

The directors

Director A
67, 60% shareholder. Clean credit, no prior insolvencies.
Director B
38, 40% shareholder (son). Clean credit, no prior insolvencies. Succession underway.
HMRC
Up to date. No history of time-to-pay.

Context & flags

  • Statutory accounts show a £180k loss last year. Looks loss-making on first read.
  • The loss is fully explained by a one-off £290k obsolete stock write-off. Underlying trading is profitable.
  • Long-established business with stable customer base and 48-day debtor cycle.
  • Net cash of £18k is very thin — precisely why the facility is needed.
  • Father-son succession in place. Institutional knowledge retained.
  • Replacing an overdraft with IF is structurally sound — IF scales with revenue, an overdraft doesn't.

Your call

What would you do with this application?

Conditions attached

Pick a verdict to continue.
Verdict revealed

What an actual lender did

Your call

—

Real lender's call

Approve
3.0% discount + 0.8% service
88% advance rate · 12-month rolling
Debenture + PG capped £100k joint
Condition: overdraft repaid on first drawdown

Why the P&L doesn't matter here

This is the case that catches out lenders who only read the statutory accounts and never read the notes. The headline loss is real, but it's not a trading loss — it's a balance sheet cleanup. For invoice finance, that distinction is everything.

  • P&L is the wrong lens for an IF underwriter. Cash conversion is. The £290k stock write-off is a non-cash event — old parts that were on the balance sheet at a value the business could no longer realise. Writing them off cleaned up the books; it didn't reduce the bank balance.
  • Underlying trading is healthy. Adjusted EBITDA of £248k on £3.6m turnover is a clean 7% — perfectly normal for industrial wholesaling and consistent with the prior years.
  • The debtor book is the security, not the P&L. 48-day debtor days against a stable customer base is what the facility funds. The book exists whether the business turned a profit on paper last year or not.
  • Replacing the overdraft with IF is structurally smart. An overdraft is a fixed limit set at a moment in time. IF flexes with revenue. As this business grows, the IF facility grows with it. The overdraft would need to be renegotiated.
  • The condition matters. Making first-drawdown contingent on the overdraft being repaid stops the borrower running both facilities in parallel and over-extending.
OUTCOME · 15 MONTHS ON

Performing. Overdraft repaid in month one. New product range launched in month three and is now contributing 14% of turnover. Savings on overdraft fees alone have offset most of the invoice finance cost.

Case 050 · Marketing & print · The administrative test

Borrower D · Marketing & Print Services

Seven-year-old marketing and print services firm with a "proposal to strike off" notice in its recent history. Asking for £150,000 invoice finance to fund growth from three new contracts.

The business

Sector
Marketing and print services
Trading
7 years
Location
South Wales
Structure
Ltd, sole director + finance manager
Employees
11

The ask

Product
Confidential invoice discounting
Limit
£150,000
Term
12-month rolling
Security offered
Debenture, PG
Stated purpose
Fund growth — three new contracts won in the last 6 months

The financials

Turnover (FY24)
£1.8m
Trend (3yr)
£1.4m → £1.6m → £1.8m
Gross margin
35%
Net margin
7%
EBITDA
£155k
Net cash
£22k
Debtor days
58
Debtor book
£290k
Top customer
18%

The director

Director
43, sole shareholder. Clean credit footprint.
Filings
Last accounts filed 4 months late. "Proposal to strike off" posted 5 months ago, withdrawn 8 days later.
Accountants
Two changes in 18 months (first became ill, second underperformed). Now with a high street firm.
HMRC
2 months of PAYE arrears 9 months ago, cleared. Up to date now.

Context & flags

  • Active "proposal to strike off" history (withdrawn). Looks like operational chaos on a credit check.
  • Strike-off was administrative (missed confirmation statement), not creditor-driven. Withdrawn within 8 days.
  • Trading is healthy, profitable, and growing.
  • Two accountant changes in 18 months. Worth a conversation, not a decline.
  • HMRC arrears were brief, self-cured, and historic. No current arrears.
  • New accountant is a credible high street firm — the source of admin chaos has been fixed.

Your call

What would you do with this application?

Conditions attached

Pick a verdict to continue.
Verdict revealed

What an actual lender did

Your call

—

Real lender's call

Approve
3.2% discount + 0.95% service
85% advance rate · 12-month rolling
Debenture + PG capped £60k
Monthly MI for first 6 months

Why admin chaos isn't a decline

A "proposal to strike off" notice in the recent history of a borrower is a credit-check red flag that often triggers an automatic decline at less-experienced lenders. Read past the headline and the picture is different.

  • Strike-off was administrative, not creditor-driven. A confirmation statement was missed. Companies House posts a notice. The director fixed it within a week. There was never a creditor action.
  • Trading is healthy regardless. Revenue is growing, margins are good, debtor days are reasonable, top customer concentration is modest. The numbers do the work the admin record doesn't.
  • The source of chaos has been identified and fixed. Sick accountant, underperforming replacement, now a credible high street firm. That's a borrower learning — exactly what you want to see.
  • HMRC arrears were brief and self-cured. Two months of PAYE that was cleared without a time-to-pay agreement is a footnote, not a flashing red light.
  • Monthly MI for six months is the right structural protection. It gives the lender forward visibility through the period where the new accountant beds in. After six months, it converts to quarterly automatically.
OUTCOME · 12 MONTHS ON

Performing. All filings now current, no late submissions since facility went live. The three new contracts that triggered the application are all in production. Limit increased to £200k at first anniversary review.

Case 051 · Construction subcontracting · The sector question

Borrower E · Mechanical & Electrical Subcontractor

Eight-year-old M&E subcontractor with 100% of its debtor book in construction. Asking for £550,000 invoice finance to fund WIP and payroll between application-for-payment and main contractor pay date.

The business

Sector
M&E subcontracting
Trading
8 years
Location
South East
Structure
Ltd, two directors
Employees
34

The ask

Product
Whole-turnover invoice finance
Limit
£550,000
Term
12-month rolling
Security offered
Debenture, joint PG
Stated purpose
Fund WIP and payroll between application-for-payment and main contractor settlement

The financials

Turnover (FY24)
£2.9m
Trend (3yr)
£2.4m → £2.7m → £2.9m
Gross margin
22%
Net margin
6%
EBITDA
£225k
Net cash
£62k
Debtor days
71
Debtor book
£710k (100% construction)
Customer mix
Tier-1 main contractors, named

The directors

Director A
52, 50% shareholder. 16 years industry experience. Clean credit.
Director B
49, 50% shareholder. 14 years industry experience. Clean credit.
HMRC
Up to date. No history of time-to-pay.

Context & flags

  • 100% construction sector exposure — a sector with above-average insolvency rates.
  • All customers are tier-1 main contractors with public, scrutinisable balance sheets.
  • 71-day debtor days is long, even by construction standards. Application-for-payment cycle.
  • Stable revenue growth and consistent margins through a volatile sector period.
  • Retention monies (typically 5%) are contingent, not financeable on the same basis as core invoices.
  • Director experience averages 15 years in the same sector. Operators, not opportunists.

Your call

What would you do with this application?

Conditions attached

Pick a verdict to continue.
Verdict revealed

What an actual lender did

Your call

—

Real lender's call

Refer with conditions
3.5% discount + 1.25% service
80% advance rate · 12-month rolling
Debenture · PG £75k per director
Non-recourse cover on rated main contractors
30% concentration cap · retentions excluded · monthly MI

Why sector "risk" is the wrong frame

Construction has high headline insolvency rates. Lazy underwriting reads that statistic and declines. Careful underwriting asks who in construction is failing — and the answer is rarely the tier-1 main contractors with public balance sheets.

  • The risk in construction IF is not "construction" — it is concentration to a struggling main contractor. Cap exposure per contractor and you have structured around the actual risk.
  • Tier-1 main contractors are scrutinisable. Their balance sheets are public. Their credit ratings are available. They are not the failures.
  • Retention monies are not invoices. They are contingent claims, often subject to defects and adjustments. Excluding them from the financeable book is non-negotiable.
  • Tier-2 contractors are excluded explicitly. If a smaller subcontractor sneaks onto the book through a novation or assignment, the concentration cap and quality of debtor changes. Monthly MI catches this.
  • Debtor protection is the structural answer. The lender offered non-recourse cover on the rated main contractors, with the cost baked into the service fee. If a covered debtor enters administration, the lender absorbs the loss — not the borrower. For a single-sector book like this, debtor protection is the most important protection on the page.
  • Pricing reflects the work, not the sector. 3.5% + 1.25% is a fair price for construction IF with these structural protections, including the cost of debtor protection — not predatory, not the cheapest money on the market.
OUTCOME · 24 MONTHS ON

Performing. A £14k application from a tier-2 subbie was caught at month four and excluded from the financeable book before drawdown. Non-recourse cover meant the £42k exposure to a smaller main contractor that entered administration at month 19 was settled in full by the lender's debtor protection policy. Limit raised to £700k.

Case 052 · Food packaging · The recovery story

Borrower F · Food Packaging Supplier

Six-year-old food packaging manufacturer recovering from the loss of its biggest customer. Asking for £250,000 invoice finance to support the rebuild with three new customers on longer payment terms.

The business

Sector
Food packaging manufacturing
Trading
6 years
Location
East of England
Structure
Ltd, sole director
Employees
19

The ask

Product
Whole-turnover invoice finance
Limit
£250,000
Term
12-month rolling
Security offered
Debenture, PG
Stated purpose
Working capital — new customers pay on 60 days vs 30 previously

The financials

Turnover (FY24)
£2.4m
Trend (3yr)
£3.0m → £3.2m → £2.4m
Gross margin
24%
Net margin
5%
EBITDA
£130k
Net cash
£35k
Debtor days
54
Debtor book
£360k
Top customer (now)
19%
Customer lost
45% of TO, 11 months ago

The director

Director
39, sole shareholder. Clean credit footprint.
Context
Customer loss was due to that customer's acquisition by a competitor, not service failure.
Response
Three new customers won and onboarded in 9 months. Margins held through transition.
HMRC
Up to date.

Context & flags

  • Turnover decline of 25% year-on-year. Looks like a business in trouble on a quick read.
  • Decline is fully explained by a single known event (customer acquired by competitor), not trading deterioration.
  • Debtor book is now more diversified than before. Top customer 19% vs 45% previously.
  • Three replacement customers won and onboarded in 9 months. Evidence of operational capability.
  • Replacement customers pay on 60-day terms (vs 30-day for the lost customer). Exactly what IF solves.
  • Margins maintained through the transition. Pricing discipline intact.

Your call

What would you do with this application?

Conditions attached

Pick a verdict to continue.
Verdict revealed

What an actual lender did

Your call

—

Real lender's call

Approve
3.1% discount + 0.9% service
85% advance rate · 12-month rolling
Debenture + PG capped £80k

Why backward-looking metrics mislead

A 25% revenue decline on the headline is the kind of thing that triggers a reflex decline. The careful underwriter asks one question first: is the decline still happening, or has it already finished?

  • The decline is a known, named, finished event. The customer was acquired by a competitor 11 months ago. That cannot happen twice with the same customer. The cause has passed.
  • The current debtor book is healthier than the historic one. Three customers, no concentration above 19%, all paying. Pre-loss, 45% in one customer was a much bigger vulnerability than the current book.
  • The 60-day payment terms on new customers are precisely what IF is built to solve. Without the facility, the borrower has to absorb the difference between paying suppliers in 30 days and being paid by customers in 60. With the facility, that gap evaporates.
  • The fact that margins held through the customer loss is the most important number on the page. Many businesses cut prices to win replacement customers and never recover their gross margin. This one didn't.
  • Forward-looking reasoning, not backward-looking. The £3.2m of historic turnover doesn't come back automatically — but the trajectory is back up, the book is better diversified, and the operator has demonstrated they can win new customers.
OUTCOME · 14 MONTHS ON

Performing. Turnover recovered to £3.1m by month 12 and is now above the pre-loss peak. Limit raised to £350k. The director cited the IF facility as "what made the recovery possible" because it converted the 60-day terms into useable working capital from day one.

Scorecard

Six calls made.

0 of 6
Cases you'd have funded.
Real lender funded all six. £1.88m of facilities written.

Every one of these cases looked like a likely decline on first read. Every one of them was funded. The point isn't that lenders always say yes — they don't. The point is that the things that look disqualifying often aren't, when the deal is structured properly.

If you're a business owner who has been declined elsewhere, the most useful thing you can do is understand why. Most rejections are driven by a single trigger — concentration, a director's history, a P&L line — that a more careful underwriter would price for rather than walk away from. The lender who eventually says yes is rarely the cheapest. They're usually the one who looked at the pack longest.

Juno publishes these cases because the more business owners and advisors understand how lenders actually think, the harder it becomes to mis-sell, mis-price, or under-explain SME funding. That is the entire point of this tool.

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