Enter your details. It only takes one minute.
We compare the market to find you the best 3 quotes
You receive your quotes directly from the provider
Invoice Finance Companies UK
How Can They Help Your Growing SME?
If you’re a small enterprise or a new start up, you may be finding it confusing to choose the right business finance for your needs. The good news is that securing a great business finance deal doesn’t have to be difficult. Here are 3 aspects that every SME should look for in a small business loan:
- Profit Growth Business profits can be improved through various strategies – most notably through a greater focus on marketing for brand awareness and visibility, through advanced office equipment and professional premises, and through raised prices that reflect an enhanced quality and service. A recent report by British innovation charity Nesta – and backed by research by the University of Cambridge – suggests up to 63 percent of commercial peer-to-peer borrowers in the UK have successfully increased profits as the direct result of suitable and affordable invoice finance.
- Increased TurnoverThe same Nesta report suggests that around 70 percent of businesses that receive funding through an equity crowdfunding scheme – one of the most popular types of alternative invoice finance – enjoy increased turnover. This can be reasonably attributed to an improved sales volume through greater sales training, streamlined internal processes, and an expanded capacity for businesses in the service industry. There are, of course, many advantages to an increased turnover, one of the most prominent being compulsory VAT registration which can have a significant impact on business profile.
Invoice finance are becoming a much more attractive option for SME businesses who have perhaps lacked confidence in the years since the financial crisis. Today’s invoice finance don’t need to be a high risk endeavour, especially when choosing invoice finance with low interest rates. Small businesses can identify suitable lenders by using online comparison tools which make it quick and easy to see available deals.
A Guide to Invoice Financing
Invoice financing, also called accounts receivable financing, is a type of business financing that uses invoices as collateral. It’s usually fast and effortless to get cash for short-term needs such as a one-off project or purchase of inventory or equipment.
Business funding with SBA can be without a credit check, making it ideal for companies with poor credit or younger start-ups. Plus, the program is scalable – as your business expands, you can borrow more money as long as the volume of outstanding invoices increases.
Unpaid invoice financing can be a great way to turn unpaid invoices into immediate cash flow, but some things could be improved using this financing method. First and foremost, it’s only suitable for some B2C businesses or subscription-based or high-ticket services with regular billing cycles that rely on payments.
Another drawback of using a lender is the fees charged. Typically, you’ll pay an administration fee per week that your customer takes to settle an invoice.
Though these fees may seem minimal compared to other forms of business financing, they can still add up and make the funding expensive for your company. For instance, if you receive an advance of 90% on an invoice worth £100,000 with 30-day terms, you would owe £4,000 in fees.
Selecting the right lender and understanding how it functions is critical. Some companies allow you to select invoices for financing, while others provide full-facility products that cover your entire sales ledger.
Some invoice factoring companies will take over your accounts receivable department, collecting outstanding invoices and pursuing customer payments. While this can be a beneficial solution for some businesses, you need more flexibility and control.
Some businesses, such as those relying on one large client to cover most of their expenses, may need help finding this option. These clients typically have low credit scores and are more likely to delay paying their invoices, making it difficult for you to secure a loan from traditional lenders.
Invoice factoring can benefit many businesses, particularly those with few outstanding invoices and prefer direct contact with their customers. However, some customers may feel pressured to pay their invoices early if they know they can receive discounts from the factoring company; thus, you must do your due diligence and have an established customer base.
Consulting an accountant or financial expert is wise if you need help determining which financing option is best for your small business. They’ll assist in determining if invoice factoring is suitable for your company and provide helpful guidance along the way.
What is Asset Finance
Are you in the market for new or existing business assets like plants and machinery, vehicles or trailers? Asset finance offers a cost-effective way to spread payments over an agreed term. All that’s required is a deposit of 10% plus VAT of the item’s value which can then be spread over up to five years with flexible repayments.
A financing company will handle credit control and collections, freeing you to focus on running your business. This solution is ideal for companies with limited cash flow but needs additional funding as their operations expand.
You can also use our comparison service to explore all the invoice financing options available from various lenders. Just fill in your details in three minutes, and our team will match you with a lender that provides the best deal for your business.
Invoice Financing Providers
Who are Bibby Finance
Bibby Financial Services is one of the premier invoice finance providers, offering solutions to businesses of all sizes and industries. Its services include factoring, trade finance and purchase funding, and specific finance solutions for construction and recruitment firms.
Forward Finance from Bibby offers small and medium-sized enterprises (SMEs) an instant cash flow solution that can accelerate their business expansion. It releases up to 90% of unpaid invoices within five days of applying for the program.
Features of Bibby Finance
- One of the best factoring providers is Bibby Financial Services, which offers to fund over 7,000 UK businesses. They have earned a reputation for providing friendly, helpful service and fulfilling their promises.
- Businesses with a turnover under £300k can apply for this loan online. With flexible contracts and access to Bibby’s local network of advisors in the UK, you can choose from plenty of affordable options – plus, you won’t break your budget!
- Bibby Financial Services also offers Invoice Discounting, an ideal solution for businesses that need to increase their working capital and cash flow more quickly. With this financing option, your credit control team remains in control of chasing payments against outstanding invoices.
- You may also consider Bibby’s Invoice Finance Foreign Exchange service, which allows you to receive funds in your bank account without worrying about currency exchange rates. This is an ideal solution for international businesses that must regularly make international payments.
Why Choose Bibby Finance
Bibby Financial Services is one of the world’s most extensive invoice finance and factoring providers, boasting a client list of over 7,000 businesses. It has earned a reputation for outstanding customer service, earning its membership in the National Association of Commercial Finance Brokers and being listed among The Sunday Times’ Top 100 Best Companies to Work For list.
Bibby Finance is the first provider to offer Invoice Finance for the construction industry, where many contractors and subcontractors struggle with finding financing for projects and other business expenses. This type of loan allows contractors and subcontractors to pay up-front labour and materials costs and then receive payment upon project completion.
Additionally, it can assist a business with funding the ongoing expenses of running an undertaking and can be combined with other forms of borrowing, such as mortgages. Bibby is one of the few lenders in the UK to offer this type of funding alongside 4Syte and Ultimate.
British Business Bank Invoice Finance
Who are British Business Bank Invoice Finance
The British Business Bank offers an extensive selection of invoice finance products and services. Their knowledgeable team can advise and guide you on which financing best suits your company’s financial requirements.
Their product portfolio includes factoring, debtor finance, invoice discounting, optional credit protection, and tailored solutions for sectors like recruitment. They provide a personalised service with all UK-based customer support based in Shropshire.
Features of British Business Bank Invoice Finance
- Capitalise on an often unused asset on your balance sheet
- Improve your cash flow
- You don’t have to give away equity
- Access finance quickly
- Flexible in terms of how you can spend the facility
Why Choose British Business Bank Invoice Finance
The British Business Bank partners with various small and medium-sized businesses nationwide to help them expand their operations. Their team understands small business owners’ difficulties and can provide creative financing solutions such as invoice financing, debtor finance and cashflow solutions to improve profitability.
Some lenders provide a ‘pay-as-you-go’ scheme, which can be especially advantageous for businesses needing short-term emergency cash flow. You can apply to get access to up to 90% of your invoice value within 24 hours and receive any remaining balance minus service charges once your customer pays it off.
NatWest Invoice Finance
Who are NatWest Invoice Finance
NatWest Invoice Finance is a speedy solution to help businesses access cash trapped in unpaid invoices. As part of NatWest and Royal Bank of Scotland Capital Connections’ panel of innovative sources of business finance, this fast-track service connects small business owners to alternative loans and other finance options. Customers with business accounts who generate at least £30,000 turnover annually and get paid within 14 days on invoice terms are eligible.
Features of NatWest Invoice Finance
- Invoicing finance costs can vary based on individual circumstances but typically start at 1% per month of the value of outstanding invoices. While this rate is relatively low, it’s still expensive compared to traditional forms of business financing.
- Businesses with difficulty accessing funding from traditional business lending providers but need additional capital for growth can benefit from this route. This could include companies looking to hire more staff members, secure new contracts or improve supplier payment terms.
- Different invoice financing methods exist, each with its advantages and drawbacks. One significant benefit is not needing to provide additional security – which may be advantageous for businesses with limited assets to offer as collateral.
- Natwest provides an online dashboard to check your balances and monitor loan progress in real-time. This makes the process streamlined, saving time in managing finances.
- Natwest will provide expert assistance throughout your invoice finance facility, helping you overcome challenges and arranging extra complementary funding when necessary.
Why Choose NatWest Invoice Finance
Invoice finance is an excellent option for small or medium-sized businesses that have been trading for six months or longer and meet their lender’s criteria. They can assist you in expanding your customer base, developing staff capabilities, and winning new contracts.
They can also assist in improving your cash flow by unlocking funds held in unpaid invoices, which could be put towards purchasing stock, completing orders or making payroll payments.
Invoice financing is fast and straightforward, typically offering an easy application process that provides funds within 24 hours of approval. It’s perfect for those who require quick cash with tight deadlines.
Close Brothers Invoice Finance
Who are Close Brothers Invoice Finance
Close Brothers Invoice Finance offers a variety of invoice finance solutions and asset-based lending to help you release funds against unpaid invoices, improve cash flow, or manage seasonal changes in demand. They also provide lousy debt protection – safeguarding your business if customers still need to settle their invoices.
They are one of the most well-known merchant banking groups in the UK. Their impressive case studies demonstrate their successful work with businesses of all sizes across multiple industries.
Features of Close Brothers Invoice Finance
- Invoice factoring lets you quickly release cash from outstanding customer invoices at a low service fee and discount rate. It’s an efficient way of getting the money needed quickly; they can release up to 90% of your outstanding bills within just a few days.
- Adding inadequate debt protection onto your invoice factoring facility guarantees 100% of what is owed if a customer defaults on their payments.
- Their service fee is based on a percentage of your turnover, and they typically set their discount rate between 2.5% and 3.5% over LIBOR, depending on the size of your facility. They accept businesses with 30-day plus payment terms and businesses from various industry sectors.
- Their fee structure is straightforward and offers an accessible online platform that lets you check your account anytime. Furthermore, the IDeal system integrates with major accounting software packages to make invoice submission a breeze.
- They’re a trusted, established provider that offers various services like invoice factoring and asset-based lending. Furthermore, they specialise in lousy debt protection – protecting your business if customers fail to pay their invoices.
Why Choose Close Brothers Invoice Finance
Close Brothers Invoice Finance offers a convenient and stress-free solution for when you need cash quickly, helping your business expand at an affordable rate. Their flexible invoice finance contracts can be tailored to fit your requirements for maximum efficiency and flexibility.
They stand out among other providers by having a wealth of information on their website, giving you an accurate assessment of what they charge and how much your facility will cost. Plus, there’s even a calculator to help calculate how much funding may be unlocked.
They’re a trustworthy invoice factoring provider with an impressive client base and an average customer lifetime of more than five years, according to Trustpilot. Furthermore, their extensive portfolio of case studies demonstrates how they’ve assisted thousands of UK companies in overcoming their cash flow difficulties.
Who are Lloyds Finance
Lloyds Invoice Finance is one of the top providers of commercial invoice financing, offering various services to help businesses improve their cash flow. They have an experienced team of industry specialists who can offer advice and support so businesses can maximise their growth through tailored funding packages.
Features of Lloyds Finance
- Businesses have access to a network of lenders through which they can choose which one best meets their financial requirements.
- Costs and fees may vary depending on the services offered but typically include a fee for loans and interest and credit management charges.
- Bill payment financing stands out among other forms of business funding as it’s completely transparent and ideal for companies with high turnovers. Furthermore, invoice financing works well even for businesses with poor credit histories, as the company can use their existing sales ledger as security for the loan.
- Bill finance comes in many forms, but the most popular ones include revolving credit lines, short-term bank loans and asset-based lending. These can fund various business needs like working capital, debtor protection, or property investment.
Why Choose Lloyds Finance
Lloyds business loans offer several advantages, such as speedy access to funds and an expansive network of lenders. Not only can you use them for invoices of any size, but they can be tailored specifically to meet your requirements.
Scalability makes this platform ideal for companies that wish to expand their revenue base. Small and medium-sized enterprises (SMEs) that need to gain a foothold in the market or develop an impressive customer base and brand should find this technology highly beneficial.
Novuna Invoice Finance
Who are Novuna Invoice Finance
Novuna Invoice Finance is a lender specialising in invoice financing for small and medium-sized businesses. Rebranded from Hitachi Capital in February 2022, the firm is part of the Mitsubishi HC Capital UK PLC group with extensive experience offering business investment financing solutions worldwide.
Features of Novuna Invoice Finance
- They have several products for customers, intermediaries and franchise businesses.
- They can gather insights and knowledge with access to a range of material relevant to your business
- They are committed to ensuring that SMEs continue to work effectively through Brexit.
- They have funded over £5bn to UK businesses, helping thousands of SMEs across more than 50 industries achieve their goals and grow
- They are committed to helping businesses tackle environmental and sustainable challenges to help build a better tomorrow
- They provide exceptional service
Why Choose Novuna Invoice Finance
Novuna is a regulated lender requiring good credit records to qualify for their services. To check your credit history, you must supply them with a copy of your most recent bank statement and full business accounts. This will enable them to assess if you meet the qualifications for their offerings, and they’ll run an actual hard credit check on you.
Swoop Invoice Finance
Who are Swoop Invoice Finance
Swoop is a credit broker that helps businesses compare and apply for various business loans and funding solutions in minutes, including business loans, grants, equity finance and debt financing. Their user-friendly website makes navigating easy; plus, you can book a call with an assistant to discuss your financial requirements. Plus, they provide access to an online calculator, which lets you instantly compare potential loan offers so you know how much your business could receive.
Features of Swoop Invoice Finance
- Maintain control of your sales ledger to keep it confidential or let the lender pursue outstanding payments for you.
- Improve cash flow, and speed up your growth.
- Release the cash in unpaid bills or borrow funds to buy the materials you need to fill an order.
- Invoice finance lets you complete an order, send a bill, and get paid in 48 hours or less.
Why Choose Swoop Invoice Finance
Are you a business owner needing some quick cash? Invoice financing could be the ideal solution. This loan utilises your company’s unpaid invoices as security for lending, offering advances ranging from 75%-95% of their value.
With some strategic planning, you can utilise the extra cash to accelerate growth and maximise opportunities. This is especially helpful if your company plans on expanding operations or entering new markets.
You can use this funding to invest in new equipment or services for your business. Alternatively, you could refinance existing assets and use the cash generated to purchase assets or pay off other loans.
Tide Invoice Finance
Who are Tide Invoice Finance
Tide Invoice Finance is on a mission to revolutionise business banking. They provide an efficient online process that saves businesses both time and money. Not only can they help you open an account, create a business credit card, and register as a limited company – they offer all these services!
Features of Tide Invoice Finance
- Services provided by Cashback Hub can be accessed via its mobile app, available for iOS and Android devices. With it, you can view transactions, send and receive invoices, manage your account settings, freeze or unfreeze cards and make payments, and access cashback rewards.
- The app is free to download and designed for sole traders and small businesses. It also offers API linking features, enabling third-party financial tools to integrate with Tide’s platform.
- The Tide platform helps you manage your business finances and accept customer payments via email or direct debit. Plus, it integrates with GoCardless for automated payment collection on invoices sent through the Tide platform.
- This free app is ideal for sole traders, small businesses and freelancers who need to streamline their accounting processes. It can be downloaded from either the UK App Store or Google Play.
- You can email or contact Tide to speak to a staff member for further assistance. They are located at their headquarters in London and can be contacted Monday through Friday between 9 am-6 pm.
- They can assist in setting up a Direct Debit mandate for your clients and providing support if needed. They have advice on debt collection strategies and how to maximise your account’s efficiency.
Why Choose Tide Invoice Finance
Tide is an ideal option for solo entrepreneurs and small businesses that require a straightforward account with superior customer service. Their mobile app is user-friendly, and their support team is responsive.
Aldermore Invoice Finance
Who are Aldermore Invoice Finance
Aldermore Invoice Finance is a modern retail bank with an excellent reputation among businesses as a reliable lender offering flexible Invoice Finance products and specific services. They offer various solutions to help SMEs meet their working capital requirements, having assisted 37,000 UK businesses with funding worth £2.2 billion since 2009.
Features of Aldermore Invoice Finance
- Aldermore Invoice Finance makes it easy to get started by connecting you with a relationship manager who can assess your needs. They will then craft a package tailored to your company’s unique requirements.
- You can quickly access working capital by advancing against uncertified applications for payment or staged invoices so that you don’t need to wait around for customer payments before making staff and supplier payments or taking on new projects. Furthermore, with Bad Debt Protection, you can protect up to 95% of outstanding debts if their value exceeds £500.
- Aldermore offers invoice financing and trade finance, which is an ideal solution for companies that must import goods and pay them back over a set period (plus fees). This option works exceptionally well if you need to order stock from abroad; it is cost-effective and could boost your sales too!
- If your sales ledger is healthy, invoice discounting could be your answer. Aldermore will purchase your unpaid invoices and advance most of their cash value onto you. After collecting client payment, Aldermore will return any remaining funds minus fees.
- Does your business possess high-value assets? Aldermore may offer an asset-based lending facility to benefit you. With various terms available, this enables you to borrow money against the value of your goods and equipment.
Why Choose Aldermore Invoice Finance
Aldermore’s Invoice Factoring service is a popular option for small businesses, giving you up to 90% of the cash value of open invoices. This allows you to make payments on those invoices in a fraction of the time it would typically take–with no credit checks or collections necessary.
Your dedicated Relationship Manager will offer a tailored service and offer a full range of support. This includes online and phone assistance and face-to-face meetings at their network of twelve regional SME offices throughout the UK.
HSBC Invoice Finance
Who are HSBC Invoice Finance
HSBC Invoice Finance is a service offered by HSBC that assists businesses with their invoices, helping to alleviate cash flow problems and lower borrowing costs. They even have an Approved Invoice scheme which enables you to receive early payment from HSBC on approved invoices your buyer has approved. You can mark all eligible invoices for early payment or pick and choose which ones should be paid sooner.
Features of HSBC Invoice Finance
- HSBC Invoice Finance product provides a flexible source of working capital driven directly by your trade credit invoices – the more you sell, the more cash is available. It’s an ideal solution for firms experiencing seasonal fluctuations in cash flow or having trouble securing traditional bank loans.
- HSBC Invoice Finance is an ideal solution for companies in turnaround phases, as obtaining bank loans after a change can be challenging. It’s beneficial for small firms with ambitious growth plans. Furthermore, international businesses seeking free cash from export invoices will find this service beneficial.
- In the UK, several invoice factoring companies provide various services, from international export invoice financing to lousy debt protection. Many also have dedicated customer support teams.
Why Choose HSBC Invoice Finance
HSBC is one of the world’s leading invoice finance providers, offering a comprehensive suite of business financing solutions to help companies manage their cash flow. Furthermore, it has an expansive trade finance offering which includes letters of credit, foreign exchange operations and export/import protection.
HSBC boasts a nationwide network of branches and an online platform called Facflow, enabling clients to view sold invoices and funds received in real-time. Furthermore, HSBC is one of the few providers that provides full e-invoicing and automated billing solutions.
Some companies charge a fixed interest rate, and others add credit management fees. Both charges are calculated daily, typically between 1.5% and 3% above the base rate set by the Bank of England.
Funding Circle Invoice Finance
Who are Funding Circle Invoice Finance
Funding Circle is a peer-to-peer business financing platform that connects small businesses with investors and lenders. They offer various loan products, with excellent customer service and an effortless application process.
Features of Funding Circle Invoice Finance
- Short & long term finance
- Apply online in 10 minutes
- Get a quick decision
- UK-based Support Team
- Fixed interest rates
- Other options include a business line of credit, which functions like a credit card with an established amount available. These can benefit small businesses that need quick cash flow to cover daily expenses.
Who Choose Funding Circle Invoice Finance
To be eligible for a Funding Circle business loan, you need at least two years of business history and an individual credit score of 660. Furthermore, no bankruptcy must have occurred within the last seven years. Furthermore, you must provide personal guarantees and UCC business liens to secure the loan.
Applying for a Funding Circle business loan is simple – complete their online application and wait to hear back from one of their account managers within an hour. They’ll discuss your business, collect necessary documents, and help you find loan terms that suit your requirements.
Metro Bank Invoice Finance
Who are Metro Bank Invoice Finance
Metro Bank Invoice Finance provides businesses with working capital. Its flexible funding solutions are tailored to small and medium-sized enterprises (SMEs) that need a reliable credit history or established business cash flow.
They provide invoice factoring and discounting services, which can significantly boost cash flow and get paid more quickly. Furthermore, they offer a terrible debt protection facility. With no minimum turnover threshold set by them, their invoice financing solutions can be applied across any industry.
Features of Metro Bank Invoice Finance
- Metro Bank boasts 76 branches throughout England and Wales, open until 8 pm weekdays and Sundays. Unfortunately, there are no branches located in Scotland or Northern Ireland.
- Their online banking system is user-friendly, and their customer support team excels. You can reach a representative anytime you need them via phone, email or post.
- Overall, Metro Bank is an attractive option for small and medium-sized enterprises (SMEs) who want to avoid paying the higher fees associated with larger banks and require improved customer service. As a high street institution, it provides each customer with a dedicated account manager and industry expertise at their fingertips.
Why Choose Metro Bank Invoice Finance
If your business has a high turnover and loyal customer base, consider opening a Metro Bank SME Finance account. It comes with an assigned Relationship Manager, access to asset and invoice financing solutions, and many other facilities designed to help boost the success of your enterprise.
RBS Invoice Finance
Who are RBS Invoice Finance
RBS Invoice Finance is one of the UK’s premier invoice factoring providers, boasting over 30 million customers and years of expertise in this sector. Their tailored contracts give you the flexibility to maximise your cash flow. Plus, they provide a range of support options and have offices nationwide to simplify achieving your objectives.
Features of RBS Invoice Finance
- With RBS, an assigned Relationship Manager will guide you through the invoice financing process and maximise your business’ finances.
- RBS FacFlow is an intuitive invoice finance management system. Powered by your personalised login, you have 24/7 access to your own workflow and invoice payment process.
- The ‘drill down’ feature at each stage of the invoicing process provides complete transparency, enabling you to quickly and efficiently monitor how much is due and what stage of payment it is at, and even look into if there are any potential savings during the procedure. This user-friendly online tool makes the invoice finance process incredibly straightforward and stress-free. It lets you view, submit and request payments online, saving you time and money in the long run.
- Additionally, you’ll have access to an Accounts Assistant who will assist with managing your account, along with the capability of uploading and downloading files at any time. Furthermore, a convenient ‘Payment Availability’ link displays how much can be withdrawn from your account at any time.
- This tool is fast and effortless, as you can access it from any internet connection worldwide. The system features an intuitive control panel layout which displays how much is owed on each invoice at a glance and provides an overview of your payment progress.
- Support resources such as videos with ‘how-to’ tips and administrator advice are readily available if needed. These are particularly beneficial if you’ve never used an invoice finance solution.
Why Choose RBS Invoice Finance
RBS offers two types of Invoice Finance: Invoice Factoring and Discounting. These solutions are ideal for businesses with established in-house ledger control and credit control processes. Furthermore, RBS offers credit protection as an optional extra to their Invoice Finance solution, providing peace of mind if clients fail to make timely payments.
Landlord Insurance FAQS
Other alternatives for financing include revenue-based lending, which relies on your projected future income. With this approach, you pay the loan monthly according to projected earnings. While more flexible than traditional invoice financing, you may have to pay higher fees and deal directly with the lender instead of your customers.
Invoice Finance is a financing solution that enables you to release cash from unpaid invoices without waiting for debtors to settle or for payments to appear in your bank account. This could help fund growth, improve working capital, and eliminate the hassle of chasing customer payments.
Invoice Factoring is an ideal solution for businesses needing to bridge a cash flow gap, and it’s beneficial when working with long-term clients who require longer payment terms. With Invoice Factoring, you can unlock up to 90% of an invoice’s value within five days of applying with no setup fees and a 24-hour turnaround once factored in.
Invoice finance is an increasingly popular financing solution for small to medium-sized businesses. This process allows companies to borrow against unpaid invoices, providing working capital or maintaining growth and stability. The procedure is straightforward, providing quick access to cash when needed most.
Bill financing options can be confusing for small businesses. Before selecting a lender, consider all your financial requirements, as some providers may need to fit better into your company’s needs.
Some lenders charge an additional fee when you release funds from invoices. These charges, sometimes referred to as “factor rates” or service fees”, can be added to the cost of financing and your overall cost of borrowing.
Factor rate costs accumulate over time. Some factors offer a flat rate that stays the same for each payment period, while others charge an increasing fee if your invoices remain unpaid after a certain number of days have elapsed.
Invoice factoring is a popular solution among small businesses, as it allows them to quickly receive up to 85% of the value of their invoices. This frees them to focus on growing their core business without worrying about slow cash flow.
Applying for an Invoice Factoring account is quick and effortless, with only two simple fees – a service fee and a discount fee. Furthermore, they don’t charge any setup or minimum usage fees, making them exceptionally accommodating to SME businesses.
Invoice financing is an accounting technique enabling a business to borrow money against unpaid invoices to generate cash quickly. Unlike traditional bank loans, invoice financing enables companies to use their business debt as collateral for lower costs than credit cards or other unsecured sources.
Business financing through invoice financing can be advantageous for companies with established customers who pay their bills promptly since invoices act as a form of credit. Nonetheless, businesses need to comprehend the advantages and drawbacks before deciding.
Generally speaking, factoring companies charge a fee on each invoice they fund. This fee is usually in the low single digits, though depending on your industry may also charge a credit management fee. Since these fees can make up a substantial part of your overall costs, compare factoring rates before selecting this solution.
Spot factoring allows you to finance any outstanding invoices without entering into a long-term relationship with a factor. With this method, you can control how many invoices are funded – no need to worry about covering an entire month’s expenses.
Other factors influencing invoice financing costs include a company’s turnover, age and size. Some of these lenders have minimum turnover requirements. In contrast, others will review your credit record and assess your overall business strategy when deciding whether or not to provide you with funds.
Many UK lenders see an uptick in invoice financing, as it allows them to fill the void left by the collapse of banks after the financial crisis. This new form of lending allows wealthy investors to recoup their investments while giving small businesses valuable access to cash flow.
Business invoice financing can be an excellent solution for those with poor credit, as it’s typically easier to secure a finance loan using your invoices as security. Invoice financing is especially beneficial to grow companies that may face difficulties making ends meet due to increased sales and cash flow issues.
The primary advantages of invoice financing are that it helps boost your cash flow, accelerates growth and boosts profits. It’s especially advantageous for small businesses with limited resources as a great way to improve cash flow and free up funds so you can invest in more profitable projects.
Another advantage of invoice financing is its convenience in managing accounts receivables and cutting overhead costs. You’ll have money to pay suppliers more promptly, giving yourself more cash to invest in your business ventures.
Invoice finance can be an efficient way to release cash quickly, as applications for this service often get approved within 48 hours. This frees you up to focus on getting more work done instead of chasing down customers for payment – and usually allows you to maintain control over your sales ledger.
Invoice finance is a popular funding solution for start-up businesses. It gives them immediate access to cash tied up in outstanding invoices. It lets them cover shortfalls without increasing their overdrafts or taking out new loans. Their borrowing limits will automatically adjust according to their turnover, so there’s no need to raise additional capital as the business expands.
Invoice financing is an attractive alternative to loans and other borrowing facilities, as it provides instantaneous access to cash without the need for traditional loan applications. This allows your business to access funds as needed, ultimately improving cash flow.
Revolving credit lines are a popular form of invoice financing, as they allow businesses to borrow up to 90% of their unpaid invoices and get paid immediately (usually within 24 hours). This helps improve cash flow and boost working capital at the same time.
These loans are ideal for businesses with a turnover of £50,000 or more managed by the company’s credit control team.
What is invoice finance UK?
Invoice financing is a form of business funding that works by using your unpaid invoices as security for an advance. This allows you to get cash out of your clients without waiting weeks or months for payment terms and conditions to be met.
Invoicing finance companies can offer you a range of facilities allowing you to release cash upfront from one or more of your invoices or your whole sales ledger. The amount you can access depends on the lender’s risk criteria, but typically it is up to 90% of the value of your invoices – sometimes within 24 hours of approval!
Unlike traditional business loans, which require assets as collateral, invoice finance companies recoup their fees and interest from the loan at the point of repayment. This means you won’t have to wait for your customers to pay you, which can be particularly problematic in construction, where payment delays are expected.
There are two main types of invoice finance: factoring and discounting. Factoring is where the lender takes responsibility for credit control, chasing late payments and
What is invoice factoring in the UK?
Factoring is a way for UK-based businesses to raise cash by selling their outstanding invoices to a third-party lender at a discount. This allows them to release cash from their debtor book to meet their daily business demands, such as paying staff and settling any unexpected bills or expenses.
What is the application process like?
When applying for invoice factoring, your company will undergo a thorough credit check, including checking your business and personal credit histories. You will also be asked to provide a series of documents. These include your accounts, customer history, and the terms of your invoices.
Getting approved for invoice financing is usually a simple process. The main determining factors are:
– The financial strength of your customers.
– The repayment terms of your invoices.
– Your business credit history.
Invoice funding companies work with businesses across all industries. Their services are designed to help UK businesses quickly get the capital they need. The key is to find an invoice factoring company that will match the needs of your business and offer a simple and affordable solution that suits your budget.
Invoice Finance Companies UK
Invoice finance companies UK can provide the cash you need to keep your business going. These services can help you leverage unpaid invoices, improve cash flow and reduce your time spent chasing customers who still need to pay.
Invoice factoring and discounting firms are an increasingly popular choice for businesses of all sizes that need quick and flexible funding. These firms will release a proportion of your outstanding invoices, and you can use these funds to pay suppliers, staff, or other business expenses.
The ‘Big Four’ banks have an invoice finance arm with a wide range of products and a national branch network. RBS is one of the leading providers and offers a dedicated online platform called Facflow that lets you manage your facilities and see invoices sold and monies received.
ABN AMRO is another large international banking group with a dedicated invoice factoring and discounting division that could be an option for import/export businesses. They’ll release a proportion of your invoices and offer flexible terms, plus you can access the facility through their UK-based team.
Bibby Financial Services is a top-rated invoice factoring provider with over 7,000 clients. It has a reputation for working with construction and recruitment firms and has won awards for its customer service.
Compare Invoice Finance
Invoice financing is a type of alternative business loan that’s revolutionising the way small businesses access essential funding. Unlike traditional business loans offered from high street banks, invoice financing is typically much more informal, with higher approval rates and more attractive lending terms.
So what is invoice financing? This alternative business loan involves ‘selling’ your unpaid sales invoices to a lender, who will essentially provide you with a cash advance. There’s no need to worry about the payment terms on your invoice, or be concerned with late payments that could leave you in the red. Instead, you’ll have instant access to the cash you’re owed, which can help you grow your business.
According to the EU Federation of Factoring and Commercial Finance, the invoice financing industry across Europe grew by a whopping 7.5 percent in 2014, showing that more and more businesses are opting for this form of alternative borrowing. However, understanding of alternative finance products such as invoice financing is still lacking, so what is it that businesses really need to know?
Invoice financing offers small businesses an opportunity for fast access to funding to facilitate brand growth and development. The way it works is simple – sales invoices for goods and services are ‘sold’ to a lender, who provides an agreed percentage of the cost instantly – usually within 24 hours. The percentage will vary by lender but is typically between 70 and 90 percent of the total cost. What this means is businesses have immediate access to their earnings, rather than having to abide by their payment terms, which could be anywhere from 21 to 60 days on average. Once a client has paid their invoice, the lender will provide the remaining percentage, less any arrangement fees.
The rising popularity of invoice financing all comes down to perceived risk – or lack of it! The way that invoice financing works – by selling unpaid sales invoices to lenders who provide an upfront payment totalling an agreed percentage of the invoice total – means there’s actually little risk involved. Business have a solid exit plan in their projected accounts receivable. No nasty surprises!
Here are just some reasons why perceived risk is typically low for invoice financing:
- Money is lent based on cash already owed to the business
- Businesses have a solid exit plan in the form of projected accounts receivable
- With invoice factoring, lenders take responsibility for their own repayments
- Businesses can identify suitable repayment terms by comparing lenders online
The term ‘invoice financing’ covers two different types of lending. Both involve borrowing a percentage of an unpaid sales invoice, but the logistics behind the two forms is different.
Invoice factoring is an excellent choice for start up businesses and small businesses who do not necessarily have the internal resources required to adequately manage accounts receivable. With invoice factoring, the lender takes over all aspects of sales ledger management, including taking invoice payments directly from the client, and contacting customer regarding overdue invoices. This can free up internal resources to focus on brand growth. The downside is clients will be dealing directly with a lender, so will be aware that the business is involved in factoring.
Invoice discounting is the second type of invoice financing, and is particularly suited to larger businesses and companies with a dedicated and capable accounts team. In this instance, the borrower retains full control of the sales ledger – the role of the lender is simply to ‘bridge the gap’ between issuing an invoice and receiving the payment. The primary advantage of invoice discounting for businesses is clients will still deal with the company itself, so do not need to know that a business is involved in factoring. The business will be wholly responsible for repaying the lender.
As alternative financing for businesses becomes more and more popular, we’re beginning to see a wealth of options available, including crowdfunding, pension financing, and invoice financing. So how can businesses make the right decision? It’s important to remember not every alternative finance product will suit every business, so it’s worth taking the time to find what works for you. Here are just some types of businesses that may find that invoice financing is the most effective decision for them:
Businesses Refused Traditional Business Loans
If you’ve been refused a business loan from a high street bank, you may be wondering what your options are. Many businesses are beginning to look into alternative finance, particularly invoice financing. As businesses have a solid exit plan in unpaid sales invoices, invoice financing lacks the same level of risk as traditional lending. This means many businesses are being approved for invoice financing, even if they’ve been refused elsewhere.
New Businesses and Startups
In order for new businesses to grow, develop, and make a name for themselves within their niche, it’s essential that opportunities are seized. However, opportunities can sometimes pop up when you least expect them to. This means that having quick access to finance is vital for new businesses. While traditional business loans can often be a long, drawn out procedure, alternative financing arrangements, like invoice financing, are typically completed much quicker.
Smaller Businesses & SMEs
Business loans are primarily focused on providing companies with the financial resources they need to develop – they’re not usually designed to make internal processes more streamlined. That’s where invoice financing stands out from the crowd. Invoice factoring is a type of invoice financing that delegates complete control of accounts receivable to the lender, ideal for smaller businesses and SMEs without a dedicated finance department.
While invoice financing – both factoring and discounting – was once quite rare, today it is one of the most popular forms of alternative finance for business. This means there are many providers offering invoice financing deals of up to 90 percent of the total invoice cost. Businesses are being advised to compare invoice financing deals online to identify the most suitable and affordable lender for their needs. By completing a quick and simple online form here at compareyourbusinesscosts.com, we can put you in touch with lenders and investors who are ready and willing to help you develop your company further. And if invoice financing doesn’t sound right for you, don’t worry! We’ll help you compare different types of alternative finance loans to find what you’re looking for.
HSBC Invoice Finance UK
HSBC is a global bank with a wealth of financial services that help businesses to grow and flourish. They provide a range of business banking products, including invoice finance, mortgages, credit cards and more.
Invoice finance can improve your business’s cash flow, making it easier to meet various needs and goals. It can speed up growth and reduce debtors while also helping your company manage risk by keeping your sales ledger in order.
The key to selecting the right invoice finance provider is choosing one with a reputation for providing excellent customer service. Whether you choose to go with an established high streets lender like RBS or a newer business lender such as Metro, you’ll want to be sure that the company can offer you the support you need – including a good range of branches and online resources.
RBS Invoice Finance UK
RBS invoice finance UK is one of the largest providers of business funding solutions, with a reputation for delivering the proper financial support to a range of sectors. They specialise in helping small businesses to release cash flow by providing invoice factoring, discounting and asset-based lending.
You can request a quote without making commitments to compare against the competition. This service is free, and you need to be based in the UK.
RBS have a dedicated support centre, as well as a variety of ways to contact them directly. You can write to or call them, and they guarantee to answer your query within five working days.
They also have an online platform called FacFlow that allows you to manage your factoring or discounting facility 24 hours a day, seven days a week. You can view all your transactions, the invoices sold, and the monies received.
As part of the Royal Bank of Scotland Group, RBS invoice finance UK has extensive experience in various industries. They offer invoice discounting, invoice factoring and asset-based lending to help you release working capital tied up in unpaid invoices, inventory, machinery or property.
Lloyds Invoice Finance UK
Lloyds invoice finance UK is the UK’s largest invoice finance company, offering various options to support your business. Its services include confidential invoice discounting and invoice factoring, as well as asset finance for hire purchase and finance lease agreements on assets such as vehicles.
They also provide comprehensive customer support, regular face-to-face meetings and phone calls, and dedicated Client Managers to answer your questions.
It is a leading provider of commercial credit and financial solutions to SMEs across the UK. It has over 2,000 branches and provides business loans, debtor protection, payroll and asset finance solutions.
The bank has a strong reputation for providing personalised and sector-specific solutions, with experts in construction, manufacturing, recruitment, agriculture and logistics. It also has dedicated Client Managers who can advise you on various business finance issues, such as debtor protection or payroll.
They are one of the leading merchant banks in the UK, focusing on larger businesses and SMEs that turnover more than £500k per year. They adopt a bespoke fee structure to your business, with fees only revealed when financing is arranged.
Aldermore Invoice Finance UK
Aldermore invoice finance UK is a modern retail bank founded in 2009 and focuses on small and medium-sized businesses. It has over 37,000 business customers and funded £2.2 billion to date.
The business provides invoice finance in several forms and has an extensive customer service department. Their relationship managers are dedicated to building a successful business relationship with you. They have a proven track record and understand the challenges faced by small and medium-sized businesses in the UK.
They offer factor and invoice discounting, which can be secured with bad debt protection. They also offer asset-based lending and construction finance.
Aldermore invoice finance is a simple, straightforward and transparent solution that can provide you with the immediate working capital you need to grow your business. Its highly qualified Relationship Managers can help you identify your current cash flow issues and provide expert advice on how best to tackle them. The company’s online portal – called E3 – makes it easy to manage your accounts and conveniently view your progress. You can also contact a Relationship Manager via telephone during UK business hours.
Close Invoice Finance UK
Close invoice finance UK is a merchant bank that combines the benefits of a large financial institution with the flexible service of an independent provider. Their UK offices are staffed with dedicated Relationship Managers who will provide you with a bespoke invoice financing solution tailored to your business and funding needs.
They offer a range of solutions to improve cash flow and help businesses grow, including asset-based lending and invoice factoring. They also offer bad debt protection and credit control to help protect against late or non-payments from customers.
The company is part of a larger merchant bank, offering various factoring and other business financing services. Its ‘client managers’ will liaise with you regularly to ensure that you are getting the best possible deal for your business.
Invoice Finance Brokers UK
Invoice finance brokers UK help businesses find the right financial product for their needs. They have access to a range of lenders and know which products are best for your industry; they can also negotiate preferential rates from them on your behalf.
Invoice factoring vs invoice finance
Invoice discounting and invoice financing are different financial products that enable business owners to release a percentage of outstanding invoices instead of waiting weeks or months for debtors to settle them. Both methods are designed to improve cash flow by releasing funds from unpaid debts and allowing the business owner to focus on growing their company.
Which is better?
We’ve compared the most popular invoice finance providers in the UK to find out which offer excellent service and support. We’ve looked at their back office portals, support and customer reviews.
The broker’s knowledge of the market, lending criteria and ethos can be used to find lenders who share your culture and appreciate your sector and requirements. They can also provide practical and speedy access to optimum facilities, saving you time and money.
Costs of invoice finance
Invoice financing costs are comprised of interest and credit management fees, which are calculated daily. These costs are typically 1.5% to 3% over the Bank of England base rate and 0.25% to 0.5% turnover.
The factor rate depends on several factors, including the industry you work in, your customers’ creditworthiness and payment history. Your business’s credit rating, and the number of invoices you issue, are also considered.
Other useful links…
- What Is Equity?
- How to Write an Invoice in 2023
- How to Make a BACS Payment
- What is a Guarantor? All You Need to Know in 2023!
- Essential Tips for Improved Invoice Management
- Invoice Funding and Global Trade: Connecting Businesses Worldwide
- How to Streamline Business Finance Processes to Drive Growth
- 15 Effective Financial Management Tips for Small Business Owners
- How to Write an Invoice: All You Need to Know in 2023
- Your Ultimate Guide to Property Finance: Everything You Need to Know
- Business Guide: How Does A Brokerage Company Work?
- 15 Money-Saving Personal Finance Tips for Your Wallet
- Currency Brokers In The UK: What Are They And How Do They Operate?
- Is Invoice Financing Good For Your Business? 10 Reasons Why We Think it is!
- Is a Loan an Asset Or a Liability?
- How Profitable is Factoring in 2023?
- Do Banks Do Invoice Factoring?
- What Is Pre Invoice Financing?
- Factoring Rates - How Much Does Factoring Cost in 2023?
- What Are 3 Types of Loan Assets?
- 3 Ways Invoice Factoring Can Help Your Business Grow
- How Do Factoring Companies Work?
- How to Make Money on an Invoice in 2023
- How Does Invoice Factoring Work? We Break it Down in 8 Simple Steps
- What Are 4 Types of Assets?
- How Fast Do Factoring Companies Pay Your Invoices? 7 Things to Consider!
- 12 Benefits of Factoring Your Invoices
- 8 Steps to Getting Fast Cash From Invoice Factoring
- 9 Reasons Why Invoices Are Confidential
- 8 Ways Factoring Can Improve Your Cash Flow
- What is a Factoring Company, and 10 Ways They Can Benefit Your Company
- 6 Key Aspects of Factoring Invoices
- 10 Ways to Find Good Factoring Rates
- What is the Difference Between Invoice Financing and Invoice Discounting? We Explore 5 Main Differences!
- 5 Critical Differences Between Invoice Financing Vs Factoring
- Purchase Order Financing: 8 Things You Need to Know!
- What Businesses Use Invoice Factoring? We Look at 16 Different Industries it is Suitable For!
- What Is Accounts Payable Financing?
- What Are the Disadvantages of Factoring? We Look at 9 Key Considerations!
- 13 Advantages of Invoice Factoring For Small Businesses
- Is Invoice Finance Regulated? 8 Ways it Is in the UK
- Is Invoice Financing Factoring Right For Your Business?
- 6 Different Types of Invoices
- Factoring Your Invoices: 10 Steps to Factor Correctly
- Is Factoring Right For Your Business? 10 Things to Consider Before Deciding!
- Is Invoice Discounting Cheaper Than Factoring?
- How Do I Become a Factoring Company? The Ultimate 12 Step Guide!
- Do Factoring Companies Do Credit Checks in 2023?
- What Businesses Use Invoices? We Look at 20 of The Most Common!
- Reverse Factoring: 5 Benefits You Need to Know!
- How Do Factoring Companies Get Their Money? 8 Common Ways Explained!
- 3 Benefits of Asset-Based Lending
- 8 Ways to Sell Unpaid Invoices
- Why Do We Factor Invoices? 10 Important Reasons to Help Your Business!
- What is a Debt Factor?
- 10 Essential Functions of an Asset-Based Contract
- Is Invoice Finance Expensive? 7 Crucial Things to Consider
- Is Invoice Discounting Safe? 6 Crucial Things to Consider
- What Are Types of Factoring in 2023?
- Who Can Do Invoice Discounting in 2023?
- Do Banks Do Factoring?
- Factoring Fees: What is a Typical Factoring Fee in 2023?
- Why Do Companies Use Factoring? 12 Useful Reasons You Need to Know!
- 7 Ways to Get Out of Invoice Factoring With Bad Credit
- How Much Do Factoring Brokers Make?
- Is a Debenture a Debt? We Explore 6 Key Characteristics
- What is Loan Capital?
- What is an Invoice in Banking?
- 4 Important Things to Consider When Factoring Your Invoices
- 4 Tips to Get Out of Invoice Factoring
- Should I Use Invoice Factoring?
- Unlocking the Essentials: What Are Accounts Receivables and How They Impact Your Business
- Navigating the Numbers: Unraveling the Distinction Between On Invoice and Off Invoice Deductions
- Which is Better, Kredx Or TradeCred?
- Unlocking Cash Flow in 8 Steps: How Do I Sell an Invoice?
- Factoring Rate Calculator: Unveiling the Secrets of Success
- Boosting Your Cash Flow: Invoice Factoring and Discounting Demystified
- Cash Flow Solutions Unveiled: Pros and Disadvantages of Invoice Discounting Explained
- Exploring the Downsides: Unraveling the Disadvantages of Factoring for Businesses
- Small Funds, Big Impact: How Does a Micro Loan Work
- Understanding the Legality of Invoice Discounting: Is Invoice Discounting Legal?
- Unlocking the Power of Finance: Industries That Benefit from Invoice Finance
- Demystifying Finance: Understanding the Difference Between Invoice Financing and Factoring
- Navigating Finance Options: Is Invoice Finance Asset-Based Lending the Right Fit for Your Business?
- Unlocking Financial Jargon: What is ABF in Banking?
- Unlocking Financial Freedom: The Benefits of Invoice Discounting for Your Business
- Profit or Pitfall? 6 Considerations to Decide: Is Invoice Discounting Profitable?
- Demystifying Invoice Finance: Is Invoice Finance a Loan or a Financial Game Changer?
- Unlocking Business Potential: What Is Asset Finance and How Can It Benefit Your Company?
- Exploring Financial Horizons: Navigating the Risks of Invoice Finance
- Behind the Scenes: How Do Invoice Finance Companies Make Money?
- Unlocking Cash Flow: What is Invoice Discounting and How Can Your Business Benefit?
- What Is Full Factoring and How Can It Benefit Your Business?
- 5 Advantages and Disadvantages of Invoice Factoring
- What Is an Invoice Copy? A Comprehensive Guide to Duplicate Invoices in Business
- Demystifying Factoring: What Factoring Means and How to Choose the Right Factor for Your Business Needs
- Exploring Invoice Financing: Do Banks Do Invoice Financing?
- Demystifying Factoring Fees: All You Need to Know About the Costs of Factoring
- Cost-Saving Techniques: 5 Strategies to Cut Costs to Save Your Business's Future
- Cash Flow Boost: Small Business Invoice Factoring Explained
- Top Invoice Financing Companies in the UK: Empowering Your Business Cash Flow
- Overdraft vs Invoice Factoring: Unpacking Financing Options for Your Business
- Maintaining Clear Boundaries: How to Separate Personal and Business Finances
- Unlocking Social Impact: What is Social Enterprise Lending?
- What is SME Funding? 16 Ways to Raise Your Funds!