Principal Business Finance Review
Principal Business Finance Limited is a Northampton-based business finance broker, incorporated in 2022. It states on its own site that it is "an independent asset finance brokerage not a lender": it introduces businesses to a range of funders for invoice finance, asset finance, loans and other products. The facility, the advance rate and the fees therefore come from whichever funder it places you with, and Principal publishes no minimum, advance rate or pricing of its own.
What this page covers
This page covers
What Principal Business Finance is, how its invoice finance introductions work, and what to check
Not covered here
General invoice finance education (see /guides/), sector pages (see /industries/), the full provider directory (see /providers/)
Key Facts
When Principal Business Finance Fits
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Businesses that want invoice finance and asset finance handled together
Principal's own background is asset finance, and it also arranges invoice finance, loans and revolving credit, so a business buying equipment and funding its debtor book can have one broker look at both.
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Owners who would rather not approach several funders themselves
A broker can take your details once and approach funders on your behalf. Ask which funders it will approach and how it is paid, because a broker's panel may not cover the whole market.
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Businesses that value a named contact through the application
Principal presents itself as a small team offering a personal service. The credit decision and the timetable still sit with the funder, so ask the broker for the funder's expected decision and setup time.
When to Look Elsewhere
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You want to deal with a funder directly
Better fit: go to a funder such as Close Brothers or Skipton Business Finance yourself, or compare several at once. A broker adds a step and may be paid by the funder it places you with.
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Recruitment agencies requiring specialist payroll funding
Better fit: Sonovate. Sonovate specialises in recruitment funding, including contractor payroll, which a generalist broker's panel may not cover.
How Principal Business Finance Compares
| Provider | Type | Min facility | Fee from | Advance to | Speed |
|---|---|---|---|---|---|
| Ultimate Finance | both | Not published | Not published | 95% | Within one week |
| Bibby Financial Services | both | Not published | Not published | 85% | 5 working days |
| Close Brothers | both | £750k turnover | Not published | 90% | 5 working days |
| Skipton Business Finance | both | £100k turnover | Not published | 90% | 5 working days |
These are funders, not brokers, so they are not like-for-like with Principal: they are the kind of provider a broker may place you with, or that you can approach directly. Figures are from the Market Invoice provider dataset; "Not published" means the funder does not state the figure publicly.
Illustrative worked example
Hypothetical: A West Midlands engineering components manufacturer with £1.2m turnover, placed with a funder through a broker
Not a real client. The charges are illustrative assumptions, not the funder's published rates; the funder quotes each facility individually. Monthly cost = £750 service charge (0.75% of £100,000) plus about £514 discount charge (7.25% a year on £85,000 drawn for a month, at the 3.75% Bank of England base rate).
Setting Up With Principal Business Finance
- 1
Enquiry and application
Principal describes a three-step process: enquiry, application with the information the funder needs (typically an aged debtor list, recent accounts and bank statements), then payout. Ask at the start which funders it will approach and whether it is paid a commission by them.
- 2
Funder due diligence and documents
The funder, not Principal, runs the credit checks and debtor verification and issues the facility agreement. Read its minimum term, notice period and any exit fees before you sign.
- 3
Onboarding and first drawdown
Once the facility is live you submit invoices to the funder, which advances a percentage of each, usually within 24 hours. Your day-to-day relationship is then with the funder.
FAQs
Is Principal Business Finance a lender?
No. Its site says it is "an independent asset finance brokerage not a lender" that can introduce you to a range of finance providers. It does not make the credit decision or provide the funds; the funder it introduces you to does. Brokers are usually paid a commission by the funder, so ask how Principal is paid and which funders it works with.
Can Principal fund against overseas invoices or only UK debtors?
That depends on the funder Principal introduces you to, not on Principal itself. Many invoice finance facilities fund UK domestic invoices only. Export invoice finance requires additional credit insurance and currency risk management. If you're invoicing EU or international customers, specialist providers like HSBC Invoice Finance or dedicated export factors may be more suitable. Always confirm geographic coverage during initial discussions.
Who carries the bad debt risk if a customer doesn't pay?
That is set by the funder's agreement, not by Principal. Under factoring the funder usually runs credit control and may offer non-recourse protection for an extra fee, meaning it absorbs approved bad debts. Under invoice discounting you keep control of collections and the facility is usually with recourse, so unpaid invoices come back to you. Check the recourse terms in the funder's agreement.
What happens if my invoicing drops during a quiet month or I want to reduce the facility?
That is governed by the funder's agreement. Many whole-ledger facilities carry a minimum fee or minimum term and a notice period, so ask the broker to show you those terms from the funder before you commit.
Our Verdict
Principal Business Finance is a small Northampton broker, not an invoice financier, so judge it on which funders it can reach and how clearly it explains its fees, not on rates, which come from the funder. If you use it, ask which funders it approached, how it is paid, and compare its best offer with at least one funder you approach yourself.
Sources: Principal Business Finance, invoice finance ("an independent asset finance brokerage not a lender", Northampton address) · Companies House 14254305 (incorporated 25 July 2022)
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
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