2 min read
Definition
A concentration limit in invoice finance caps how much of your funded ledger can come from a single customer — often around 20–30%. It stops the financier over-relying on one debtor, and protects both parties if that customer fails.
In plain terms
If one customer makes up half your sales, a financier will only advance against part of that exposure, because a default there would be catastrophic. The concentration limit spreads the risk across your customer base.
Why it matters
A heavily concentrated ledger reduces how much invoice finance can release, and is a business risk in itself. See disapproved invoice.
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