Top 10 UK invoice financing companies

By Rob Binns | Senior Writer

A healthy cash flow is essential for the success of any business. But spending too much time chasing payment for goods or services can distract you from other important tasks.

The answer? Invoice factoring.

Factoring gives your business a helpful cash injection by freeing up money from unpaid invoices the moment they’re raised.

Factoring companies pay up to 95% of the total value of an invoice, usually within 24 hours. They take full control of your sales ledger to ensure debts are settled promptly and in full. In return, you pay a small percentage fee. But how to choose between lenders? The only way is to compare.

Best factoring companies

We’re here to help you find the invoice financing solution for your business. See our reviews of the best factoring companies below, including: Ashley Business Finance, Skipton Business Finance, Metro Bank SME Finance, RBS Invoice Finance, Bibby Financial Services, Aldermore Invoice Finance, Close Brothers Finance, Hitachi Capital UK and more.

Here is a list of the best invoice factoring companies in the UK:

What’s on this page?

Ashley Business Finance

Ashley Finance are specialists in small business factoring for companies based in England and Wales — even those with a poor credit history. Their tailored packages evolve with your business, allowing you to access more money upfront as your turnover grows. Services include a “confidential” option, which means that your clients won’t know that you’re using a factoring company, and a dedicated support team for a familiar and personalised service.

Supplier Rating: Full review

Ashley’s costs are fixed and transparent — so there are no nasty surprises down the line. There is no charge for early repayment and, almost uniquely among the providers in our list, Ashley actually welcomes the application of newly established businesses. So if you’ve been turned down by other companies, it’s well worth giving them a go.

Ashley Finance at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £50k
  • Discount fee: 1.5-4%
  • Service fee: 1-3%

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Skipton Business Finance

As one of only a handful of companies eligible for the government backed Enterprise Finance Guarantee Scheme, Skipton is a popular choice for small businesses. There is no option of a confidential service. But the company boasts “full transparency of fees”. And, in fairness to them, they’re one of the only lenders to actually list costs on their website.

Supplier Rating: Full review

There’s no discount fee so all you pay is a simple service charge, which reduces in line with your turnover. But Skipton knows how hard it is to grow a business. So you can rest assured in the knowledge that your service charge won’t suddenly jump into a higher band if you fail to reach your expected turnover.

Skipton at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £300k
  • Discount fee: None
  • Service fee: 2-3.5%

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top invoice factoring companies

Invoice factoring frees up time and money, allowing you to focus on growing your business

Metro Bank SME Finance

Metro Bank acquired the highly regarded SME Finance in August 2013 to bolster its offering of financial services for businesses. Unlike many of its competitors, SME Finance focuses its efforts on providing the best possible invoice discounting and factoring services. So the beauty of this merger is that Metro Bank customers can now enjoy access to a full range of financial services with the expert knowledge of a specialist invoice factoring company.

Supplier Rating:

Metro Bank SME Finance promises to review your application within the hour. And, if approved, you can expect to see funds landing in your account within 12 hours. You can cancel your contract at any point with just 28 days notice.

Metro Bank SME Finance at a glance:

  • Advance rate: Up to 85%
  • Minimum client turnover (approx.): £100k
  • Discount fee: 1.5-3.5%
  • Service fee: 1-3%

Request a quote >

MarketInvoice Ltd

Founded in 2011, MarketInvoice has helped thousands of UK businesses to unlock funding for growth. They offer a range of invoice discounting solutions – on a selective and whole turnover basis. The company prides itself on customer service, and invites you to check out their Trustpilot score. And understandably so – they’re rated “Excellent” with a score of 9.4/10.

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There’s no denying the company’s pedigree. CEO Anil Sticker knows a thing or two about entrepreneurship, having featured in Forbes Magazine’s “30 under 30” and won a host of awards for business innovations. Funding through the platform is provided by investors from around the globe, including the UK Government-owned British Business Bank.

MarketInvoice at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £100k
  • Discount fee: 0.3 – 1.5% per 30 days
  • Service fee: 0.2 – 3.5%

Request a quote >

RBS Invoice Finance

With a history stretching back almost 300 years, there are few invoice factoring companies in the UK that can match the Royal Bank of Scotland (RBS) for experience. RBS offers both discounting and factoring services. Customers are assigned a dedicated ‘relationship manager’, who will rigorously check the ability of potential new customers to pay fully and on time.

Supplier Rating: Full review

FacFlow – RBS’ easy-to-use online system – allows you to access your account at any time of the day or night, wherever you are in the world. Upload new invoices, monitor outstanding invoices and access available funds with the click of a mouse. You’ll be hard pressed to find an invoice financing company that delivers a smoother customer experience than RBS.

RBS at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £250k
  • Discount fee: 1-4.5%
  • Service fee: 0.03-5%

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Bibby Financial Services

Bibby is a global invoice financing company with a client base of 7,000 businesses and a whole host of awards to its name. The company won the coveted “Best Factor and Invoice Discounter” gong at the 2017 National Association of Commercial Finance Brokers Awards, and consistently ranks in The Sunday Times’ list of the 100 best companies to work for.

Supplier Rating: Full review

So when Bibby claims to have a “highly motivated and dedicated team of experts” on hand to to assist with your every invoice factoring need, they’re not kidding. And their Trustpilot score backs this up — an impressive four out of five stars from close to 200 reviews. That’s a seriously impressive score, especially for one of the largest factoring companies in the the world.

Bibby at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £100k
  • Discount fee: 1-3.5%
  • Service fee: 0.5-3.2%

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Aldermore Invoice Finance

In a sector where much is made of “heritage”, it’s refreshing that Aldermore Invoice Finance boasts about being an entirely “legacy-free” UK bank. Founded in 2009, the company won “Invoice Finance Provider of the Year” at the coveted Credit Today awards just six years later. And since then it’s gone from strength to strength, picking up a further 21 awards for services and innovation to date.

Supplier Rating: Full review

Having problems getting approved for invoice factoring? Aldermore approves nine out of 10 applications. Customers are assigned a “relationship manager”, who will work with you to tailor Aldermore’s financing solutions to your business needs. But businesses change, they evolve and grow. And Aldermore recognise this, offering regular reviews of your contract to ensure the best possible value for money from their services.

Aldermore at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £60k
  • Discount fee: 1.5-3%
  • Service fee: 0.25-3%

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Close Brothers Finance

Close Brothers is an invoice factoring company catering for medium to large sized businesses. When you apply for invoice finance, Close Brothers looks at your business as a whole. They take into account factors such as business potential and objectives, not just industry and turnover. And this close attention to detail continues through to customer relations, where a dedicated “client manager” will liaise with you regularly to ensure you’re getting the most out of your account.

Supplier Rating:

Close Brothers is one of only two companies on our list to clearly outline fees on their website. Of course rates vary from business to business, but it’s refreshing to have a ballpark figure as a starting point. The company offers both invoice factoring and discounting. Bad debt protection – insurance against clients who don’t pay – is available as a bolt-on.

Close Brothers at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £250k
  • Discount fee: 2.5-3.5%
  • Service fee: 0.5-2%

Request a quote >

Hitachi Capital UK

Hitachi Capital is one of the largest factoring companies in the world. With 800,000 customers, the company caters for businesses of all sizes — from startups to multinationals. They offer a fully confidential service and a flexible three month rolling contract with a six month trial period. Should you wish to leave during this trial period you can, without notice.

Supplier Rating: Hitachi Capital website

Hitachi’s ‘Inspired Cashflow’ service offers a fresh approach to invoice financing. Designed to simplify the process for small businesses, customers pay a one off fee of £250 plus a percentage of the sales invoice value. These fees start as low as 0.45% for businesses with a turnover of more than £10 million, rising to as much as 4% for small businesses. With that kind of flexibility, it’s no wonder they’re one of the UK’s most popular invoice factoring companies.

Hitachi at a glance:

  • Advance rate: Up to 85%
  • Minimum client turnover (approx.): £50k
  • Discount fee: 0.45-4%
  • Service fee: £250 fixed

Request a quote >

HSBC Invoice Finance

HSBC’s invoice discounting division operates on a global scale. Its multi-lingual, UK-based team are able to collect invoices from most countries around the world. Customers do not have to bank with HSBC but it often works out as more cost-effective to do so. The minimum contract term is one year with a three month notice period.

Supplier Rating:

HSBC at a glance:

  • Advance rate: Up to 90%
  • Minimum client turnover (approx.): £500k
  • Discount fee: n/a
  • Service fee: n/a

Request a quote >

How does invoice factoring work?

how invoice financing companies work

How much does it cost?

When it comes to factoring, there are two charges to consider.

Discount charge — a percentage of the invoice taken by the factoring company as payment. It’s a combination of base interest rate plus commision.

So, with a discount rate of 3%, you can expect to see £19,400 in your bank account when the payment is made by the customer. The factoring company takes £600 for its troubles.

Service charge — a monthly administration fee charged by some providers, calculated as a percentage of annual turnover.

Is my business eligible for invoice factoring?

Almost certainly, as long as it’s a B2B. In other words, your customers must be other businesses.

In years gone by factoring was only available to large, well established businesses. But now there are a whole host of providers catering specifically for small businesses and startups.

Providers such as Hitachi and Aldermore will consider businesses with a turnover as low as £50k and less than a year’s trading history.

Other factors considered by providers are:

Customer base — businesses that are over-reliant on a single customer will find it more difficult to get approved.

Quality of customers — providers will look into your customers’ credit history to determine how likely they are to default on payment.

Will my customer know if I’m using a factoring company?

The answer is: they don’t have to. The best factoring companies offer a ‘confidential’ service, where they chase payment under your company name. If keeping factoring a secret from customers is important to you be sure to mention this early on in your negotiations with providers.

Invoice discounting

Most invoice financing companies offer both invoice factoring and discounting services. The principle is the same: you are paid a percentage of the invoice upfront, before the customer pays. The key difference is that with invoice discounting you are responsible for chasing payment. This means more work for you, but lower fees in return

Invoice discounting is usually only available to larger companies with a dedicated finance team. Some providers will consider small businesses, though, so it’s worth asking the question to see if invoice discounting could save your company money.

How do I choose the best factoring company for my business?

The only way to ensure you’re getting the best deal for your business is to compare quotes from multiple providers. To do that, simply fill in this form and receive free, same-day quotes from up to four different factoring companies.

The questions asked are designed to match you with the most suitable providers for your business. No hidden fees. No obligation to buy. No hassle.

The whole process takes less than two minutes, so it’s guaranteed to save you time — and it could save you up to 40% on factoring too.

Rob Binns Expert Market
Rob Binns Senior Writer

Rob writes mainly about the payments industry, but also brings industry-specific knowledge of CRM software, social media monitoring, and invoice finance. When not exasperating his editor with bad puns, he can be found relaxing in a sunny corner, with a beer and a battered copy of Dostoevsky.

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