There are 140 invoice factoring companies in the UK currently helping companies with their cash flow by unlocking the value locked up in their unpaid invoices.
Cash flow is particularly important for all businesses – we saw just how much it mattered during the COVID-19 crisis of 2020. A business may be profitable but, if it can’t trade for a few weeks yet it still has to pay some or all of its expenses, the remaining cash in a business will run out quickly.
In more normal times, cash flow crises are caused by one or more customers not paying a business what they’re owed quickly enough. On paper, a company may have made a profit from a deal it’s done but, if it can’t collect money in faster than it spends it, that business will eventually become insolvent no matter how big its order book and its margins on those orders.
How many companies use invoice factoring?
Invoice factoring is used by tens of thousands of companies in the UK to ease cash flow pressures caused by having to wait for customers to make payment. But what is it and is it right for your company?
In this article, we’ll consider:
- what invoice factoring is
- what to look for when choosing between differing invoice financing companies
- the current facilities offered by:
- ABN AMRO Commercial Finance
- Aldermore Invoice Finance
- Ashley Business Finance
- Barclays Invoice Financing
- Bibby Financial Services
- Close Brothers Invoice Finance
- Hitachi Capital UK
- HSBC Invoice Finance
- Lloyds Bank Invoice Financing
- MarketInvoice
- Metro Bank Invoice Finance
- RBS Invoice Finance
- Skipton Business Finance
- Ultimate Finance
- getting help to find the right factoring company
Invoice factoring brokering services
If you want to find out more about invoice factoring and you’d like help finding the right provider and tariff for your business, please fill in the form above. Once we have your details, we’ll then approach the three to four most suitable lenders on our panel.
When we place factoring companies in competition with each other, we’re normally able to secure lower rates and better terms for your business than you might get if you approach the funder directly.
There’s no cost to our service and you’re not obliged to accept any of the offers made to you by the members on our panel of invoice factoring service providers.
What is invoice factoring?
How does it work? Well, the invoices you send out to customers have value because there is legal force behind them. You have done work for your client to their satisfaction and they agreed to pay you a certain amount of money for that work having signed your terms and conditions.
Because you can take a client to court for not paying the invoice, that’s where its legal force comes from. When you factor an invoice, you essentially sell the title to that invoice – instead of owing you the money, the client now owes the factoring company the money. It’s not quite as simple as that but this is the basis upon which invoice factorers have the confidence to buy your invoices from you (or lend against them).
How does invoice factoring work?
Factoring business invoices is simple – once you have an account opened, you request credit limits for all of your clients. Your clients may then accrue invoices to that amount however, if the total accrued amount goes past the agreed limit, you either have to persuade your factorer to up the limit, you ask the client to pay the balance up front, or you invoice them on standard terms but you won’t be paid on that (part of the) invoice by the factorer.
When you issue an invoice to a client with a limit, you email or fax the invoice across to the factorer. Within 24 hours normally, you will receive an advance of the amount of the invoice (usually up to 90%). When the client pays, you receive the remainder of the balance minus the factorer’s fees.
What if I am paid on milestones?
Please note that any invoice you send over to your factorer must be for completed work unless you have agreed different terms with your factorer. Some factorers pay out on agreed milestones between you and your client – if this is how you work, it’s best to disclose it to the factorer in advance so that they can tell you whether they can work on those terms or not.
What if your client doesn’t pay?
Your invoice factorer does chase your client for payment however, if there’s a dispute, you and your client will have to settle that dispute before the factorer will start chasing again. If your client doesn’t pay where there is no dispute, then you will be expected to reimburse the factorer for the money they advanced to you.
Non-recourse factoring
For a higher fee, you can ask your factorer to pay an advance on an invoice which they will not claim back from you if the client doesn’t pay. This is called non-recourse factoring.
However, please be careful because, with some factorers, the circumstances under which they would not claim the money back can be quite narrow and this might call into doubt the efficacy of non-recourse factoring for your company.
Do I have to factor all of my invoices?
This is very much down to the discretion of each factoring company. Some will insist that you send each invoice issued for factoring whereas others are happy for you to pick and choose which ones you send.
What if I don’t want my clients to know I’m using a factoring company?
With invoice factoring, your client will always know that you’re using a factoring company. You could ask your factorer to provide an invoice discounting service instead however.
With invoice discounting, you receive the advance as normal but it’s up to you to collect and chase payment from the client. When you’re paid by the client, you then pay the factoring company. Most funders in the sector offer this service but many have a higher minimum turnover threshold requirement for discounting services than for standard factoring services.
Choosing a factoring services provider
Below, we look at fourteen of the major invoice factoring providers in the UK to give you an idea of the types of tariff available to your company.
What do the figures mean? With each mini-profile, you’ll see the following:
- minimum turnover – your business must turn over more than the minimum turnover shown on each table to be eligible for an account
- discount fee – this is the charge made per invoice. For example, if you invoice a customer for £10,000 including VAT and the discount fee is 2%, you’ll be charged £200 for that invoice. This is normally a flat fee however MarketInvoice (included below) charge an interest rate as a discount fee based upon the amount of time which elapses between your issuance of the invoice and the client’s settlement of it.
- service fee – this is a fee for the maintenance of the account and it is normally charged at a percentage of your annual turnover
- Trustpilot reviews – we have included the number of reviews for each provider as shown on Trustpilot as well as the score. On occasions, there is no separate Trustpilot score for the invoice factoring division however there is a score for the bigger company of which it is a part. Where there is no separate Trustpilot score for the invoice factoring division, there is an asterisk (*) next to its name.
ABN AMRO Commercial Finance
| Name of invoice factorer | ABN AMRO Commercial Finance |
| Minimum turnover | £1,000,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.5% |
| Maximum discount fee | 3.0% |
| Minimum service fee | 0.2% |
| Maximum service fee | 1.0% |
| Trustpilot No Reviews | 0 |
| Trustpilot Av Score | 0.0 |
ABN AMRO is a major international Dutch banking group with a significant presence in the UK market. In addition to offering cross-border foreign exchange and financing solutions to companies seeking to expand abroad, they offer a relatively competitive invoice factoring service for businesses selling to other UK businesses.
100% bad debt cover on invoices is available for an additional premium on the discount fee.
For clients wanting invoice discounting – meaning that their customers do not know that they’re using invoice funding – a confidential service is available however, to qualify, your company needs to have been historically and consistently profitable in recent years. They also will want to check how efficient and successful your internal credit control department is prior to accepting your application for discounting.
Aldermore Invoice Finance*
| Name of invoice factorer | Aldermore Invoice Finance* |
| Minimum turnover | £60,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.5% |
| Maximum discount fee | 3.0% |
| Minimum service fee | 0.3% |
| Maximum service fee | 3.0% |
| Trustpilot No Reviews | 583 |
| Trustpilot Av Score | 4.3 |
With a low turnover requirement of just £60,000 per annum for both its factoring and discounting service, many companies which would otherwise be disqualified for invoice funding can access it through one of the newer entrants into the market, Aldermore Invoice Finance.
Aldermore are one of the few funders to have a structured product granting advances on in-progress contracts and on future subscription fees.
Ashley Business Finance
| Name of invoice factorer | Ashley Business Finance |
| Minimum turnover | £50,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.5% |
| Maximum discount fee | 4.0% |
| Minimum service fee | 1.0% |
| Maximum service fee | 3.0% |
| Trustpilot No Reviews | 2 |
| Trustpilot Av Score | 2.5 |
Ashley Business Finance’s minimum turnover threshold is even lower than Aldermore’s and it is one of the few providers in the market to actively seek brand new businesses to take up its services.
Ashley has an innovative “confidential” option for its factoring service meaning that your clients will be unaware that you’re using invoice funding – this discretion is still important for many invoice funding clients despite the growing popularity of this finance option.
Barclays Invoice Financing*
| Name of invoice factorer | Barclays Invoice Financing* |
| Minimum turnover | £100,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.5% |
| Maximum discount fee | 4.5% |
| Minimum service fee | 0.3% |
| Maximum service fee | 1.0% |
| Trustpilot No Reviews | 2811 |
| Trustpilot Av Score | 1.4 |
Recently, the responsibility for providing Barclay’s invoice funding service for SMEs was transferred to another company reviewed in this article – MarketInvoice.
To access Barclay’s direct service, your business needs to turn over at least £500,000. There is a large degree of flexibility on how many of your invoices you put across to Barclays hence its competitive service fee.
Invoice discounting is also available to companies whose turnover is greater than £500,000 but acceptance into this scheme requires a large percentage of your orders to be invoiced across a wide range of payments overseen by a recognised computerised credit control platform. Barclays’ service will also be unsuitable for companies looking for milestone or stage payment funding.
Bibby Financial Services
| Name of invoice factorer | Bibby Financial Services |
| Minimum turnover | £100,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.0% |
| Maximum discount fee | 3.5% |
| Minimum service fee | 0.5% |
| Maximum service fee | 3.2% |
| Trustpilot No Reviews | 383 |
| Trustpilot Av Score | 4.6 |
Bibby are one of the top 3 UK providers of invoice factoring and they offer many different products serving different sectors of business.
For companies whose turnover is less than £300,000 (but more than £100,000), their easy-in, easy-out “Forward Finance” tariff unlocks up to 90% of the value of your invoice within 24 hours.
Their invoice discounting service is particularly generous in that it advances up to 100% of the value of an invoice within a day. The higher your advance however, the higher your discount fee is likely to be.
They have specific divisions for the construction sector (multi-stage milestone payments for contractors and subcontractors) and the recruitment industry (allowing temps to be paid if a recruiter is waiting for their client to pay their invoice).
Close Brothers Invoice Finance*
| Name of invoice factorer | Close Brothers Invoice Finance* |
| Minimum turnover | £250,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 2.5% |
| Maximum discount fee | 3.5% |
| Minimum service fee | 0.5% |
| Maximum service fee | 2.0% |
| Trustpilot No Reviews | 3503 |
| Trustpilot Av Score | 4.4 |
Targeting established and growing companies, Close Brothers provides clients with up to 100% funding on invoices if needed. Their services support multi-currency payments and their bad debt protection product is very highly regarded within the industry.
If your turnover is greater than £500,000 a year and you use their factoring service, dedicated agents will collect payments on your behalf. For clients interested in invoice discounting, up to 90% of the value of the invoices you issue are funded but you will be required to demonstrate competence and success in both credit control and sales ledger management.
Their platform integrates with dozens of accounting and bookkeeping systems for greater operational convenience for your company and for the colleague at Close Brothers working on your account and collecting your payments.
Hitachi Capital UK
| Name of invoice factorer | Hitachi Capital UK |
| Minimum turnover | £50,000 |
| Advanced Rate | 85.0% |
| Minimum discount fee | 0.5% |
| Maximum discount fee | 4.0% |
| Minimum service fee | £250 |
| Maximum service fee | £250 |
| Trustpilot No Reviews | 344 |
| Trustpilot Av Score | 4.8 |
With a low minimum turnover threshold, Hitachi only asks new clients to sign for up a 6 month rolling contract. If you’re prepared to stay with them after the trial period, their service fee is a very low fixed £250 a year although this is offset by slightly more expensive discount rates for clients with smaller turnovers.
Clients with turnovers of £250,000 a year or more may apply to join Hitachi’s invoice discounting service. This may be particularly important for some companies requiring because Hitachi’s factoring service requires your clients to pay Hitachi direct.
In recent years, the company has developed a significant presence in the payroll funding sector for recruitment agencies.
HSBC Invoice Finance*
| Name of invoice factorer | HSBC Invoice Finance* |
| Minimum turnover | £500,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.0% |
| Maximum discount fee | 4.5% |
| Minimum service fee | 0.2% |
| Maximum service fee | 1.0% |
| Trustpilot No Reviews | 3046 |
| Trustpilot Av Score | 1.4 |
Part of one of the world’s largest banking groups, HSBC Invoice Finance provide multi-currency funding as well as export invoice finance, collections teams in many countries around the world, and a substantial 100% credit protection insurance offer charged as a premium on your discount fee.
HSBC also promises its factoring clients access to a dedicated credit controller.
Lloyds Bank Invoice Financing*
| Name of invoice factorer | Lloyds Bank Invoice Financing* |
| Minimum turnover | £50,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.0% |
| Maximum discount fee | 4.0% |
| Minimum service fee | 0.3% |
| Maximum service fee | 1.0% |
| Trustpilot No Reviews | 1001 |
| Trustpilot Av Score | 1.8 |
Like Hitachi, Lloyds offers new customers a six month trial and, like Ashley Business Finance, they are open-minded to receiving applications for invoice funding from new starts. If you’re not happy with Lloyds’ service after the six months’ trial, they will refund your service fee. If you’re happy to continue, you only have to offer them 28 days’ notice.
MarketInvoice
| Name of invoice factorer | MarketInvoice |
| Minimum turnover | £100,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 0.3% |
| Maximum discount fee | 1.5% |
| Minimum service fee | 0.2% |
| Maximum service fee | 3.5% |
| Trustpilot No Reviews | 292 |
| Trustpilot Av Score | 4.2 |
MarketInvoice have, for over a decade, been one of the more progressive invoice funders. They now account for a large part of the overall invoice factoring market in the UK and they recently agreed with Barclays to run their SME factoring service.
With MarketInvoice, you receive up to 90% of the invoice value within 24 hours. They do offer confidential invoice discounting but you are required to submit all of your invoices to the company under that service.
They also offer a contract financing option against both contractual invoices and on future subscription fees. Advances made under this service attract a maximum advance of 80%.
Metro Bank Invoice Finance*
| Name of invoice factorer | Metro Bank Invoice Finance* |
| Minimum turnover | £100,000 |
| Advanced Rate | 85.0% |
| Minimum discount fee | 1.5% |
| Maximum discount fee | 3.5% |
| Minimum service fee | 1.0% |
| Maximum service fee | 3.0% |
| Trustpilot No Reviews | 2331 |
| Trustpilot Av Score | 3.6 |
Metro Bank have a growing branch network around the UK – they were one of the better funded challenger banks launched in the aftermath of the Great Recession of 2008-2009.
Their discount and service fees are fairly standard however they promise that funds will be advanced within 12 hours of receiving an invoice and that you only have to give them 28 days’ notice to leave the service.
RBS Invoice Finance*
| Name of invoice factorer | RBS Invoice Finance* |
| Minimum turnover | £250,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 1.0% |
| Maximum discount fee | 4.5% |
| Minimum service fee | 0.3% |
| Maximum service fee | 0.5% |
| Trustpilot No Reviews | 419 |
| Trustpilot Av Score | 1.4 |
RBS are one of the three leading providers of invoice factoring in the UK and one of the few companies with specialist divisions targeting business sectors like recruitment, manufacturing, haulage, and so on.
To use their factoring service, your turnover must be between £250,000 and £6,500,000 – with this service, you’re paid 90% of the value of your invoices within one working day and RBS collects clients’ payments on your behalf.
Their invoice discounting service also offers a 90% advance if you turn over more than £300,00 and you can demonstrate established credit controls, strong control of your ledger, and you offer as security your debtor book.
Skipton Business Finance
| Name of invoice factorer | Skipton Business Finance |
| Minimum turnover | £300,000 |
| Advanced Rate | 90.0% |
| Minimum discount fee | 0.0% |
| Maximum discount fee | 0.0% |
| Minimum service fee | 2.0% |
| Maximum service fee | 3.5% |
| Trustpilot No Reviews | 0 |
| Trustpilot Av Score | 0.0 |
One of the smaller yet more innovative competitors in the market is Skipton Business Finance, a division of the Skipton Building Society.
The services they offer to clients include:
- a standard but well-respected invoice factoring service (where clients make payment to Skipton so that they know you’re using invoice funding)
- recourse invoice factoring (where they will fund invoices past its due date but they are able to claim it back on non-payment)
- confidential invoice discounting (up to 90% advances on invoices where your company chases payment from your clients)
Ultimate Finance
| Name of invoice factorer | Ultimate Finance |
| Minimum turnover | £0 |
| Advanced Rate | 95.0% |
| Minimum discount fee | 1.0% |
| Maximum discount fee | 4.5% |
| Minimum service fee | 1.0% |
| Maximum service fee | 3.0% |
| Trustpilot No Reviews | 351 |
| Trustpilot Av Score | 4.9 |
Ultimate Finance do not offer any invoice discounting service for clients – they offer invoice factoring. Unless you specify to them that you want to use their confidential service, your clients will realise that your invoices are being funded.
They offer up to 95% advances on invoices up to £5m with pay-out within 24 hours. They also have dedicated teams for companies in the construction and recruitment sectors.
Get help finding the right factoring company for your business
Each of the 140 factoring companies in the UK has its own target market – the types of companies and the sizes of invoices it prefers to work with. If you approach a factorer not targeting your type of company, your application may be declined or you may receive higher rates than you would have received from one of their competitors.
We work with a substantial panel of invoice factorers – we know, with each of them, which companies and sectors they wish to grow their market share in. Fill out the form at the top of the page and let us identify the right factorers for you. On your behalf, we’ll negotiate with the most suitable funders and, afterwards, we’ll present you with the top three or four deals we’ve found.
Our service is free of charge and you’re under no obligation to accept any offer made by a funder.