Can I Factor Invoices to Related Companies?
No. Invoices between related companies, group companies, or companies with shared directors/shareholders are excluded from factoring. The provider needs genuine third-party debtors to assess credit risk independently. Intercompany invoices are not financeable.
Why related-party invoices are excluded
Invoice finance prices the credit risk of your customer, not your business. When the customer is a connected company that risk assessment breaks down: you control both sides, the debt can be created or cancelled at will, and the invoice is not evidence of a genuine arm's length sale. Providers treat connected debtors as ineligible at underwriting and exclude them from the funded ledger, so they do not count toward your availability.
Connected typically means common shareholders or directors, a parent or subsidiary relationship, or family-controlled entities. Disclose the relationship up front: an undisclosed connected debtor found during a routine audit can trigger a reserve, a facility review, or in serious cases an allegation of fraud.
What you can do instead
Fund your genuine third-party invoices through a standard facility and keep the intercompany trading off the ledger. If most of your turnover is intercompany, invoice finance is the wrong tool: look at a business loan or other working-capital options. If you are comparing routes, our cost calculator and the provider directory show what each facility funds.
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Director, Market Invoice
Oliver leads Market Invoice's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 6 April 2026