AT A GLANCE
Sector
Children's Residential Care
Challenge
Local authority contract described a self-bill arrangement, but no invoice would actually be issued. This made standard invoice finance impossible with payroll due that week.
Solution
Our sector expertise identified a non-standard invoice submission process within the council’s own framework. We pitched a revised billing arrangement directly to the Local Authority, who agreed to accommodate it.
Outcome
Facility approved, legal docs issued, and funds in the client's account within 48 hours. Payroll met, children's home stayed operational.
The Challenge
Our client had spent two years preparing their children’s home for its first placement. Property refurbishment, staff recruitment, Ofsted registration, all completed with significant investment and virtually zero revenue coming in.
When a Local Authority finally agreed a placement and a child moved in, it should have been the turning point. The Individual Placement Agreement confirmed the arrangement, the contract described a self-bill agreement, and significant monthly billing was expected. The client approached Team Factors for an invoice finance facility to bridge the gap between billing and payment. Payroll was due that week.
What We Found
A generalist lender might have taken the contract at face value. Because we work with care providers every day, we know that Local Authority billing arrangements rarely work the way the contract language suggests. So we went deeper.
When we sought clarification from the Local Authority, the picture quickly unravelled. Despite the contract describing a self-bill arrangement, no self-bill invoice would actually be issued. There was no portal to track signed-off work. And the council was planning to pay via scheduled Payments, meaning there would be no formal invoice at all.
You can’t finance an invoice that doesn’t exist.
Without sector knowledge, this is where the story ends. The deal gets declined, the client waits 30 days for their first payment, and a children’s home that spent two years preparing to open is left scrambling to cover payroll in its first week.
Knowing Where to Look
Our team reviewed the full contract and communication trail between the client and the Local Authority in detail. We weren’t looking for a loophole, we were looking for a process. And because we understand how Local Authorities operate, we knew what to look for.
Buried in one of those exchanges was a detail a generalist funder would almost certainly have missed: the council had an internal process for handling invoice submissions via email, designed for anything billed outside the standard IPA arrangement. If the Local Authority agreed to accept invoices through that channel, we would have a workable invoicing process, and a workable invoicing process meant we could fund it.
We weren’t looking for a loophole. We were looking for a process. And because we understand how Local Authorities operate, we knew what to look for.
The very next day, we were able to arrange a Teams call with the client and the Local Authority representative. We proposed the idea directly to the council, explaining how it would work within their existing framework. They agreed and confirmed it both verbally and in writing.
48 Hours
WEDNESDAY
Written confirmation received. Urgent trust account requested. Ian and Dean completed the full underwriting submission by late that evening.
THURSDAY
Facility fully approved, legal docs issued. Dean expedited the trust account setup. Jordan and Maria prepared everything for drawdown.
FRIDAY
Funds cleared by close of play. Payroll met. The children’s home stayed operational.
From green light to funds in the client’s account: less than 48 hours.
Why This Matters
This case wasn’t solved by speed alone. A generalist provider wouldn’t have known to dig into the Local Authority’s email trail, wouldn’t have recognised the non-standard submissions process for what it was, and wouldn’t have had the credibility to get on a call with the council and propose a change to their billing arrangement.
We could, because this is what we do every day. We understand how Local Authority contracts are structured, how IPAs translate into billing, and where the gaps appear between what a contract says and how payments actually flow. That knowledge is what turned a dead end into a funded facility.
If you’re a children’s home operator navigating complex Local Authority billing and need working capital to keep your service running, get in touch. We understand the contracts, we know the processes, and we know how to find a way through.