Diagnosis

The invoice exists. Nobody will fund it.

An invoice can be entirely valid, wholly owed and still be worth nothing to a funder. The reasons are specific and mostly structural: how the work was billed, who owes the money, how much of the ledger sits with one customer, and whether anything sits behind the debt that could reduce it. Knowing which one applies is what decides whether the answer is a different funder, a different facility, or a change to how you bill.

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Recognition

Valid, owed, and unfundable

Businesses in this position have usually already been told yes in principle and then no in practice. The facility exists, the ledger exists, and yet the specific invoices that matter are excluded from it. That is not a credit decision about the business. It is a decision about whether a particular debt can be relied on to pay, and it turns on a handful of recognisable causes.

The exclusion table

Thirteen reasons a valid invoice gets excluded

Find the row that matches the invoice the funder has held back. The basis column says where the point comes from: a funder's own published guide, legislation, or our reading of how the law applies. The numbers in brackets point to the sources listed at the foot of the page, all checked on 1 November 2026.

Reason	What the funder sees	Basis	What can change it
The invoice is in dispute	Any query from the customer about the invoice, or about whether it has to pay at all. The guide lists invoices in dispute among the ineligible debts held back from the availability calculation, and says a dispute left unanswered for 35 working days may be reassigned to the client at the funder's discretion. [1]	Funder guide	Clear the query. Issue a credit note for anything you accept is owed back, or reply to the customer in writing and copy the funder. Once it is settled the invoice can come back into availability, on your agreement's terms.
The invoice is past the facility's overdue cut-off	Invoices a set number of days past their due date are held back. The number is in the schedule to the agreement; the guide's own example is 60 days past the due date. [1]	Funder guide	Collect it, or agree longer terms with the funder for customers who pay slowly but reliably. Check the cut-off in your own schedule rather than assuming a market norm.
Too much of the ledger is owed by one customer	The concentration limit is a percentage of the whole ledger set by the funder. Any single customer's balance above that percentage is held back. [1]	Funder guide	Because the cap is a percentage of the total, a larger ledger from other customers raises it in pounds. Otherwise ask the funder to review the limit for that customer; the answer is its credit decision.
The customer's balance is over its funding or credit limit	Each customer can carry its own limit. The amount above it is held back from availability. On a non-recourse facility the funder also sets credit limits. [1]	Funder guide	Request a limit increase, with the customer's full registered name and company number so the funder can assess it.
The funder has started legal action against the customer	Customer accounts where the funder has started legal action are ineligible, and the guide says the customer's limit is removed. [1]	Funder guide	Little, for that customer, until the action ends. With the limit removed, new invoices to them are unlikely to fund either, so the real question is whether to keep selling to them on credit.
The customer paid you instead of the funder	Customer balances subject to direct payment are held back. Payments received by you on assigned invoices must go to the funder straight away with the remittance. [1]	Funder guide	Pass the payment on at once, with the remittance, and ask the customer to update its payee details so the next one goes to the funder.
The customer is also your supplier (contra or set-off)	A legal assignment passes the debt 'subject to equities having priority over the right of the assignee', so a customer with a set-off against you can generally raise it against the funder too. The Explanatory Note to the 2018 Regulations says a contractual right of set-off is not a restriction they override. If the customer goes into liquidation, mutual debts between you must be set off against each other. [3, 2, 4]	Legislation	Tell the funder about the cross-trading at the outset and keep both accounts with that customer settled. How much it reserves against the risk is the funder's policy, not a legal rule.
The customer's contract bans assignment of the debt	For contracts entered into on or after 31 December 2018, a term banning or restricting assignment of a receivable has no effect. It still has effect where the supplier (you) is a large enterprise or a special purpose vehicle at the time of assignment, and for the contract types excluded by regulation 4, including contracts concerning land, prescribed financial services, contracts where a party is acting outside a business, and contracts where no party is in business in the UK. The Explanatory Note says the Regulations deal with contracts under the law of England and Wales or Northern Ireland. [2]	Legislation	Check three things: when the contract was signed, whether your last filed accounts put you in the small or medium-sized regime and outside a large group (sole traders and ordinary partnerships are never large enterprises), and which law governs the contract. If all three are on your side, the clause does not stop the assignment.
A construction application for payment has not yet become a sum due	A construction contract must set how and when payments become due, and require a notice, from the payer or a specified person, or from you where the contract says so, no later than five days after the payment due date, stating the sum considered due and how it was calculated. Before that, an application is your claim, not a fixed debt. [5, 6]	Our reading of the law	Work to the contract's payment timetable and get the notified sum on paper. The notified sum is a figure a funder can check; the amount applied for may not be.
The amount is a retention	Cash retention is held back under the construction contract and released later, on terms set by that contract. It is not overdue, so it is not treated like an ordinary late invoice. [8]	Our reading of the law	Track release dates and chase them when they fall due. A retention held by a contractor that becomes insolvent may not be recovered at all.
Payment depends on your customer being paid by someone else	In a construction contract, a pay-when-paid term is ineffective unless the third party (or someone further up the chain) is insolvent, and making payment conditional on performance or a decision under another contract does not count as an adequate payment mechanism. Both rules apply only to construction contracts as the Act defines them. [7, 5]	Legislation	If a funder has excluded construction invoices because of a pay-when-paid clause, point it to section 113. Where the upstream party is insolvent, the clause does work, and the invoice is genuinely at risk.
The customer is overseas, or the contract is under foreign law	The Explanatory Note to the 2018 Regulations says they deal with contracts under the law of England and Wales or Northern Ireland, and regulation 4 excludes contracts where no party is in business in the UK, so a ban on assignment in a foreign-law contract may still bite. Which countries a funder will take is its own appetite; we found no public rule or standard list. [2]	Our reading of the law	Read the contract's governing law clause and ask the funder for its list of acceptable countries before you sign, not after the first overseas invoice is excluded.
The invoice was raised before the goods or services were delivered	The funder takes the debt subject to the customer's defences. If the work is never done, the customer can refuse to pay the funder, so an invoice billed ahead of performance is a claim on work still to come. [3]	Our reading of the law	Invoice on delivery or on completion of a stage. Value built up before billing is a work in progress question, not a ledger one.

Download the table as CSV or JSON. Each row carries its sources and the date they were checked. The funder guide rows come from one funder's published client guide dated May 2015: it shows how a funder sorts ineligible debts, not the current terms of any funder. Your own cut-offs, percentages and limits are in your facility schedule, and we have not put numbers on them except the one example the guide itself gives. Free to reuse with credit (CC BY 4.0).

Reading the table

Three groups, three different fixes

The funder guide rows (dispute, overdue, concentration, customer limit, legal action, direct payment) are the facility working as written. The debt is fine in principle, and the fix is in how you manage the ledger or what you negotiate in the schedule. The legislation rows cut both ways. Set-off is the law working against you: a customer who is also a supplier can reduce what the funder collects. An assignment ban in a post-2018 contract with a small or medium-sized supplier, or a pay-when-paid clause in a construction contract, may carry less weight than a funder first assumes, so check the rule before accepting the exclusion. Most of our reading rows (applications for payment, retentions, billing ahead) are about whether a fixed, due debt exists yet; if it does not, a different receivables funder rarely helps. The overseas row is about whether the 2018 protection reaches the contract at all.

Where to take it

Which cause points where

Uncertified applications or retention. The answer is rarely a different receivables funder, because no due debt exists yet. Retention mechanics are covered under retentions and certification, and the retention release estimator sets out when held money should come back.
An assignment ban in the customer's contract. Whether it has effect can turn on your company size in your last filed accounts. The company size checker works that out from your figures.
Value sitting in unbilled work. That is a work in progress question, not a ledger one.
A ledger that is simply not enough for the requirement. An asset-based facility that also lends against stock and plant reaches further than a receivables line can.
An existing lender's security blocking the alternative. That is a consent and ranking question.

Asking your funder

Get the reason in writing

A funder that is a member of UK Finance's Invoice Finance and Asset-Based Lending board has signed up to its Code (2025 edition, effective from 1 January 2025). It commits members to provide clients with all appropriate information in a timely and transparent manner, to write legal documentation that is clear and does not obscure the client's obligations, and to run their own complaints procedures, telling clients about UK Finance's independent complaints process at the start of the facility and whenever a complaint is not resolved to the client's satisfaction (UK Finance IF/ABL Code, 2025). That gives you a fair basis to ask which part of the agreement or schedule excluded the invoice, and to take it to the funder's complaints process if the answer is not clear.

Boundary

When the answer really is a receivables specialist

If the case is genuinely receivable-led (the ledger is sound and the requirement is simply a better or differently structured invoice finance facility), the question becomes which provider, not which facility. Our own invoice finance pages explain the structures, but we do not compare providers side by side. The specialist site for that market is Market Invoice, which compares UK invoice finance providers. Market Invoice is run by Best Business Loans Ltd, a separate company under the same ownership as Muswell Rose Consulting Ltd, which operates Established Finance.

What we do

Diagnosis first, then the right kind of facility

Established Finance is an introducer, not a lender. Where a case needs more specialist handling, we may introduce you to a specialist provider. This page is information rather than advice, and the specific treatment of any invoice depends on your contract and your funder's own policy.

Sources

Where each row comes from

RBS Invoice Finance, Factoring Guide (May 2015), 'Ineligible items which may affect the amount of funding available'. May 2015.
Business Contract Terms (Assignment of Receivables) Regulations 2018 (SI 2018/1254), regulations 1 to 4 and Explanatory Note. Made 23 November 2018; applies to contracts entered into on or after 31 December 2018.
Law of Property Act 1925, section 136 (legal assignments of things in action). Current version on legislation.gov.uk.
Insolvency (England and Wales) Rules 2016, rule 14.25 (winding up: mutual dealings and set-off). Current version on legislation.gov.uk.
Housing Grants, Construction and Regeneration Act 1996, section 110 (dates for payment). Current version on legislation.gov.uk.
Housing Grants, Construction and Regeneration Act 1996, section 110A (payment notices). Current version on legislation.gov.uk.
Housing Grants, Construction and Regeneration Act 1996, section 113 (prohibition of conditional payment provisions). Current version on legislation.gov.uk.
GOV.UK, Retention payments in the construction industry (consultation on the practice of cash retention under construction contracts). GOV.UK page dated 26 February 2020 (latest update).

All sources read on 1 November 2026. Also cited above: UK Finance, Invoice Finance and Asset-Based Lending Code (2025 edition). Legislation is quoted from legislation.gov.uk under the Open Government Licence.

Talk it through

Need another perspective?

You may already know which facility you think fits. The more valuable question is whether it's actually the right structure for what's happening in the business. We'll review the situation before suggesting possible routes. It costs nothing to have that conversation.

What happens next

We read it. No need to know which facility you want first.
If we can help, we may introduce you to a provider.
No charge and no obligation at any point. You decide whether to go further.

Adam Parker

Founder of Muswell Rose Consulting Ltd, which trades as Established Finance · Managing Director of Penny, an invoice finance business, from July 2020 to November 2023, and working in mortgages, commercial finance and fintech lending since 2010 (career history; career record).

AI-assisted check 1 November 2026

Practical questions

Before you get in touch

Does a clause banning assignment stop an invoice being financed?

Often not. For contracts entered into on or after 31 December 2018, the Business Contract Terms (Assignment of Receivables) Regulations 2018 make a term that bans or restricts assigning a receivable ineffective. The clause still works if you are a large enterprise or a special purpose vehicle when the debt is assigned, and for the contract types listed in regulation 4, such as contracts concerning land. The Explanatory Note says the Regulations deal with contracts under the law of England and Wales or Northern Ireland.

Why would a funder exclude an invoice the customer has not complained about?

Because eligibility is about the debt, not the customer's mood. An invoice can be excluded because it is past the facility's overdue cut-off, because the customer's balance is over its limit or over the concentration limit, because the customer is also a supplier who could set off, or because it was billed before the work was done. None of those needs a complaint.

Where do I find the rules my own funder applies?

In your facility agreement and its schedule, which set the overdue cut-off, the concentration limit and the customer limits. The UK Finance Invoice Finance and Asset-Based Lending Code (2025 edition) commits member funders to legal documentation that is clearly written and does not obscure the client's obligations, and to their own complaints procedures.

How long does it take?

It varies by facility, so there isn't one number that fits every case. Some drawdowns against an existing facility complete within a day or two; arranging something new from scratch usually takes longer. We'll give you a realistic timeline once we understand your situation.

What information do I need?

To start, just a description of what’s actually happening in the business. If it progresses, the provider will ask for the usual things: recent accounts, a sense of turnover and trading history, and details of the specific need.