If you need a financial solution which can release working capital to help your business with its cash flow and you could benefit from having some support in managing your customer accounts, then an invoice factoring service could be the solution for you.
This service allows you to access the funding that is tied up in unpaid invoices and receives expert back office support. If this sounds right for you continuing reading on to discover what these lending providers can offer you.
The table below gives a quick comparison of the top UK invoice factoring companies.
Company Maximum % factoring value
Close Brothers 90%
Aldermore 90%
RBS Facflow 90%
Bibby Financial Services 100%
Ultimate Finance 95%
Innovation Finance 90%
Calverton Finance 90%
HSBC Invoice Finance 90%
Skipton Business Finance 90%
IGF Invoice Finance 90%
Positive Cashflow Finance 85%
Advantedge 80%
Working Capital Partners 85%
Team Factors 90%
Pulse Cashflow Finance 85%
Peak Cashflow 85%
Santander Invoice Finance 85%
Metro Bank Invoice Finance 85%
ABN AMRO Commercial Finance 90%
Lloyds Bank Invoice Finance 90%
Paragon Bank Invoice Finance 95%
Outsauce Financing 100%
Trade Finance Global 90%
* The facts and figures included here come from each company’s website and were accurate at the time of writing but may have since changed. Also, please keep in mind these may not be apples to apples comparisons as each provider offers different solutions. This guide should be used as a starting off point for more research on your part.
Below we profile each of the companies’ services and features in a bit more detail.
Topics
1. Close Brothers
Some of the features and benefits of Close Brothers’ invoice factoring.
- Unlock up to 90% of your invoice value
- Receive a cash injection the same day that the invoice is raised
- They manage payment collects from your clients
- Receive the balance of your invoice when it is paid
- Only take a small fee
- Also offers invoice discounting where you retain the payment management
- Suitable for invoices with over 30-day payment terms
- Invoice factoring is available to companies with an annual turnover of over £250,000
- Provide services to a range of businesses including manufacturing and service-based businesses
- Highly ranked lending provider
Close Brothers is a highly ranked UK finance company that is part of a group of businesses that provide merchant banking services. They provide a range of financial lending services that include invoice factoring, invoice discounting and asset-based lending.
Close Brother’s invoice factoring service gives you same-day access to the some of the value of your invoices on the day the invoice is raised. The value that can be unlocked varies but can be up to 90%. The factoring service does not only release cash from your invoices, but they also collect the payment on your behalf and then release the remaining cash to you once the payment is received minus their fee.
2. Aldermore
Some of the features and benefits of Aldermore’s invoice factoring.
- Access up to 90% of your unpaid invoices
- Full credit control service
- Allows you to focus on your business, not your debtors
- Receive funds within 24 hours
- Packages tailored specifically to your business
- Online access to manage your account
- A dedicated Relationship Manager
- Optional Bad Debt Protection
- Positive customer review ratings
- Award-winning Invoice Finance Provider in 2015 and Factor and Invoice Discounter of the Year in 2014
Invoice factoring is designed to help businesses to grow and survive by giving them access to the funds tied up in unpaid invoices up to the value of 90% of the invoice value. Invoice factoring also offers credit control services so that you can concentrate on your business whilst Aldermore do the chasing for you.
Aldermore has created a personalised service which builds packages around your business needs and gives their customers a dedicated Relationship Manager who can provide ongoing business support. They also offer an optional Bad Debt Protection service to reduce the risk associated with customer losses.
3. RBS Facflow
Some of the features and benefits of RBS Facflow’s invoice factoring.
- Advance up to 90% of the value of your invoices
- Manage your debtors for you
- Collects unpaid or late invoices
- Suited to smaller businesses
- Also offers invoice discounting
- Offers asset-based lending
- Let them have the awkward conversations with customers about payments
- Access to your invoice finance online 24/7
RBS FacFlow is RBS’ invoice finance service that offers a range of financing options to help businesses to access funds that are tied up in their invoices or assets. Their services include invoice factoring, invoice discounting and asset-based lending.
RBS FacFlow’s invoice factoring service not only releases to you the funds you need that are tied up in unpaid or late invoices, but they also release your time for chasing up invoices. Once you engage their factoring service they will take control of the collection of the invoice value and they will have the awkward payment conversations with customers.
4. Bibby Financial Services
Some of the features and benefits of Bibby Finance Services’ invoice factoring.
- Access up to 100% of your invoice values
- Relieve cashflow issues
- Manage your sales ledger
- Deliver your credit control and collect payments on your behalf
- Ideal for businesses that struggle to manage their cashflow
- Access invoice value within 24 hours of issuing an invoice
- Optional bad debt protection
- 24/7 online account management
- Service Promise
- Confidential service
Bibby Financial Services offers a range of financial services to small businesses which include invoice finance. They offer Forward Finance for smaller businesses with an annual turnover below £300,000, and they also offer invoice factoring and invoice discounting.
Their invoice factoring service allows businesses to access up to 100% of the invoice value at the point of raising the invoice. The factoring service also takes control of your financial collection services with your customers to ease your workload, but they will do this confidentially. You still retain control and will have access to your account online 24/7.
Bibby Financial Services website
5. Ultimate Finance
Some of the features and benefits of Ultimate Finance’s invoice factoring.
- Access up to 95% of your invoice value
- Rolling contract
- Access to funds within 24 hours
- Fees are competitive
- Dedicated relationship manager
- Manage your sales ledger
- Collect your payments/debts for you
- Set up within a week
- Can alter services if required
Ultimate Finance offers an invoice factoring service but does not call it invoice factoring and they deliver both invoice discounting and invoice factoring all under the invoice finance name. If you prefer managing your own customers confidentially you can under invoice discounting.
Ultimate Finance’s invoice finance services are typically delivered as invoice factoring unless you request otherwise. This means that Ultimate Finance will manage your sales ledger and contact your customers to collect the outstanding invoices. This service allows you to access up to 95% of your invoices within 24 hours after the initial set up period.
6. Innovation Finance
Some of the features and benefits of Innovation Finance’s invoice factoring.
- Release up to 90% of your invoice values
- Funding received within 24 hours
- Complete outsourced collections service
- Professional service
- Send all communications to collect invoice payments
- Slow and late payment management
- Optional bad debt protection
- Credit advice and credit management
- Has a customer service promise
Innovation Finance specialises in invoice financing solutions to help businesses to release the cash flow that is tied up in their invoices and gives them the funds they need to survive and grow. They offer bad debt protection with their invoice factoring which can cover either selective accounts or the whole sales ledger.
Innovation Finance’s invoice factoring service offers up to 90% of your invoice value in your bank account within 24 hours, and the remaining balance will be released on payment minus fees. The service includes complete collections management service that will deal with all communications and debt issues to get the invoice paid.
7. Calverton Finance
Some of the features and benefits of Calverton Finance’s invoice factoring.
- Access up to 90% of your invoice value
- Quick release of funds tied up in invoices
- Assign your payments to Calverton Finance
- They collect the payments on your behalf
- Reduced administration for your business
- Focus your attention on building the business not chasing payments
- Detailed quote for their services will be sent within 24 hours
- Other financing options available
- Invoice discounting available if you prefer a more discretionary service
Calverton Finance offers a whole range of financial services to businesses that need to release funds to run their business or to grow it. These services meet a range of requirements and can tailor them to suit your needs.
Calverton Finance’s invoice factoring service works by offering you up to 90% of your invoice value at the point you raise your invoices. When you raise the invoice, you give the customer instructions to pay Calverton Finance and copy the invoice to them so that they can release the funds. Calverton Finance will then collect the payments for you and give the remaining funds minus their fee once the invoice is paid.
8. HSBC Invoice Finance
Some of the features and benefits of HSBC’s invoice factoring.
- Access up to 90% of your invoice value
- Receive cash within 24 hours
- Expert skills in managing credit control
- Dedicated credit controller
- Optional credit protection services
- Improved cash flow
- Manage your sales ledger
- Collect payments for you
- Secure funding that grows with your business
- Online account management
HSBC offers invoice finance called receivables finance that gives businesses access to the cash flow that is tied up in their unpaid invoices. They offer invoice factoring, invoice discounting and export invoice finance. They also offer optional bad debt protection with these services for extra protection.
HSBC’s invoice factoring service gives you access to your working capital so that you can utilise the funding to survive or grow your business. The factoring service not only releases cash flow but it also helps you to manage your credit control by taking care of your sales ledger and collecting payments for you.
9. Skipton Business Finance
Some of the features and benefits of Skipton Business Finance’s invoice factoring.
- Access up to 90% of your invoice value
- Release funds quickly
- Remove the wait for longer invoice terms to a day from 30-90 days
- Create a more consistent cash flow to manage your finances
- Dedicated Relationship Manager
- Transparent costs
- Flexible service that grows with your business
- Support managing your sales ledger
- Collection of payments on your behalf
- Free credit reports on your clients
Skipton Business Finance is a part of the Skipton Building Society Group and their company’s remit is to provide businesses access to finance to aid their cash flow. They provide a range of services which include invoice finance services – invoice factoring and invoice discounting.
Skipton Business Finance’s invoice factoring service allows you to access the value tied up in your unpaid invoices up to a value of 90%. The service can be engaged as soon as you receive your invoices shortening the wait for the payments. At this point, Skipton Business Finance will take control of the collection of the payment and communications to your customer.
Skipton Business Finance website
10. IGF Invoice Finance
Some of the features and benefits of IGF Invoice Finance’s invoice factoring.
- Access up to 90% of your invoice value
- Release cash flow immediately after raising your invoices
- Professional credit management service
- Receive expert financial advice
- Manage your sales ledger
- Flexible service
- Tailored solutions
- Dedicated support team
- Allows you to focus on your business
- Early settlement discounts
IGF Invoice Finance is an established financial services provider whose services include invoice finance and asset-based lending. They offer these services to small to medium-sized businesses that are looking to release some of their cash flow that is tied up in unpaid invoices or assets.
IGF’s invoice factoring service allows clients to access up to 90% of their eligible invoice values and pays this at the point that the invoice is raised saving clients 30 to 90 days wait for the cash they need. The invoice factoring service not only boosts your cash flow but it also gives you access to their credit management services which can free up your time.
11. Positive Cashflow Finance
Some of the features and benefits of Positive Cashflow Finance’s invoice factoring.
- Access up to 85% of your invoice value
- Quick access to working capital
- Comprehensive credit control service
- Allows you to focus on your business
- Borrowing facilities from £10,000 to £1 million
- Available to businesses with turnover above £100,000 per year
- Open to new business start-ups
- Flexible service
- Experts in their field
- Backed by a larger group
Positive Cashflow Finance is a financial services provider who has an experienced background and is backed by the 1pm Group. They offer a wide range of financial products that include invoice finance and asset-based financial solutions which include invoice discounting and invoice factoring.
Positive Cashflow Finance offers invoice factoring which they call disclosed invoice finance which offers access to funding from £10,000 to £1 million for businesses of various sizes that have a minimum turnover of £100,000. Disclosed invoice finance also offers a comprehensive credit control to manage your invoice payments for you which gives you time to focus on your business, not payment collections.
Positive Cashflow Finance website
12. Advantedge
Some of the features and benefits of ‘Advantedge’s invoice factoring.
- Access up to 80% of your invoice value
- Release funds within the day
- Selectively chose which invoices you want to raise funding from
- Discloses the service only to those customers selected
- Improved cash flow
- A solution that grows with your business
- Control of which debtors are selected
- Experience credit control management
- Access up to £1.5 million of funding
- Assists seasonal trading patterns
Advantedge is an experienced, independent and privately-run financial services business who offers a personal approach that is delivered by local teams that support their customers to access the funding they need to grow their business.
Advantedge’s invoice factoring service is called selective invoice finance which offers customers access to their working capital that is tied up in unpaid invoices. This is selective invoice service as they allow customers to select which invoices they want to raise capital against and control who Advantedge will contact. Once set up Advantedge will collect the payments from these customers on your behalf.
13. Team Factors
Some of the features and benefits of Team Factors’ invoice factoring.
- Release up to 90% of your invoice values
- Receive funding the same day
- Send your invoices for borrowing the day you raise them
- Real-time tracking of finances
- Manage your account online
- Dedicated BACS account for payments
- Payment collection service
- Benefit from expert credit control service
- Flexible and bespoke service
- Debtor protection available
Team Factors is a smaller and independent financial services provider that specialises in only a few products that deliver funding solutions including invoice financing, recruitment financing and payroll. Team Factors only offer an invoice factoring service to their clients.
Team Factors’ invoice factoring service gives its clients access to the funding tied up in unpaid invoices and unlocks up to 90% of it. Clients can submit an invoice for factoring as soon as the invoice is raised and access the funding the same day. Team Factors uniquely delivers their BACS transfers through dedicated customer accounts for fast and accurate payment.
14. Pulse Cashflow Finance
Some of the features and benefits of Pulse Cashflow Finance’s invoice factoring.
- Release up to 85% of your invoice value
- Receive funding within 24 hours
- Financing decision made instantly
- Simple fixed rates
- No hidden charges
- Straightforward application process
- The application process takes 5 days
- Management of your credit control
- Free up time from credit control
- Customer credit checks included
Pulse Cashflow Finance are financial services provider who lends money to businesses that have good quality collateral to offer in return for the finance, this can be from assets or unpaid invoices. They base their services on this collateral and offer a bespoke service to meet your needs.
Pulse Cashflow Finance’s invoice factoring service allows businesses to release cash flow from their unpaid invoices within 24 hours for up to 85% of their value. They will take control of your sales ledger and collect payments for you. They will also credit check all your customers to help you decide who to give credit to.
Pulse Cashflow Finance website
15. Peak Cashflow
Some of the features and benefits of Peak Cashflow’s invoice factoring.
- Access up to 85% of your invoice value
- Release funding quickly
- Receive full credit support and detailed credit checks
- Experienced credit controllers to collect payments
- Tailored service
- Option to have confidential service
- Set up within 7 working days
- Contract based on quarterly minimal levels
- Available to start-ups up to large SMEs
- Optional bad debt protection
Peak Cashflow is a financial services provider who offers a range of financial solutions which include invoice finance services – invoice factoring, invoice discounting and confidential factoring.
Peak Cashflow’s two invoice factoring solutions provide a range of benefits to businesses. Invoice factoring offers access to funding tied up as well as providing a credit control service where they manage all your customer payments for you. Confidential factoring only differs from invoice factoring by it being a confidential service where the customers do not know that the factoring service is being used. If you want to retain control of your credit control then invoice discounting may be more suitable.
16. Santander Invoice Finance
Some of the features and benefits of Santander’s invoice factoring.
- Access up to 85% of your invoice value
- Immediately releases funds
- Raise cash flow as you send out invoices
- Manages your credit control
- Expert support and guidance
- Flexible service
- Bespoke products catered to your needs
- Online account management
- Offers a range of complementary financial products
- Experience financial providers
Santander is an international bank that provides a range of financial services products to businesses through their corporate and commercial banking arm. They provide business loans, overdrafts and finance such as asset finance and invoice finance.
Santander’s invoice financing solution is simply called invoice finance and they don’t distinguish between invoice factoring and invoice discounting, but they offer both types of services. The factoring element of their offering takes control of your credit control services and supports businesses that do not have an established back-office function. Their solutions are flexible and can be tailored to your needs.
Santander’s Invoice Finance website
17. Metro Bank Invoice Finance
Some of the features and benefits of Metro Bank’s invoice factoring.
- Release up to 85% of your invoice value
- Access funds within 24 hours of applying
- Apply for funding as you raise invoices
- Suits small businesses that can benefit from back office support
- Expert financial support
- Manages your credit control for you
- Release time normally spent chasing payments
- Clear and simple pricing
- Access funding up to £100,000
- Dedicated relationship manager
Metro Bank is a bank that delivers their services differently with stores that are open seven days a week so that its customers can access their services when they need them. They offer a range of financial services products to businesses that include invoice financing.
Metro Bank’s invoice financing services comprise of invoice factoring and invoice discounting. Their invoice factoring service offers businesses access to up to 85% of their invoice value within 24 hours of raising the invoice, but also gives them the back-office support functions of credit control services. This service is ideally suited to small businesses that do not have established financial support.
Metro Bank Invoice Finance website
18. ABN AMRO Commercial Finance
Some of the features and benefits of ABN AMRO’s invoice factoring.
- Access funds up to 90% of your invoice value
- Cash in your account within 24 hours
- Set up within 5 working days
- Flexible finance solution
- Professional credit control support
- Dedicated credit controller
- Personal account management
- Access your account 24/7
- Award-winning service
- Optional bad debt protection
ABN AMRO Commercial Finance is part of a leading Netherlands based global banking service that offers private and commercial banking services. They provide invoice financing and asset-based lending solutions to smaller to large businesses.
ABN AMRO Commercial Finance’s invoice finance solutions include invoice factoring and invoice discounting which both release up to 90% of unpaid invoices quickly so that businesses can utilise the capital that is tied up. Their factoring service also offers managed credit control services which allow businesses to benefit from expert credit controllers and focus on growing their business not chasing payments. You can track and monitor your account online 24/7.
ABN AMRO Commercial Finance website
19. Lloyds Bank Invoice factoring
Some of the features and benefits of Lloyds Bank’s invoice factoring.
- Release up to 90% of your invoice value
- Access funds within 24 hours
- Expert credit control support
- Free up time to focus on growing your business
- Increased cash flow
- More cost-effective than traditional finance products
- Flexible service which grows with your business
- Online account management
- Open to non-Lloyds Bank customers
- Optional customer insolvency protection
Lloyds Bank is an established bank and financial services provider that offers a range of financial services products that include invoice finance and asset-based lending solutions. They have created these services to cater for different sizes of businesses and their needs.
Lloyds Bank’s invoice finance solutions include invoice factoring and invoice discounting. The invoice factoring service is available to businesses that have an operating turnover of a minimum of £50,000. The invoice factoring service also manages its customers’ credit control function which is why this solution is ideally suited to smaller and newer businesses who do not have established back-office systems and staff to conduct credit control.
20. Paragon Bank Invoice Finance
Some of the features and benefits of Paragon Bank’s invoice factoring.
- Access up to 95% of your invoice values
- Release funding quickly
- Tailored contracts
- Flexible solution
- Experienced financial support
- Managed credit control service
- Credit card collections
- Quick and efficient collection of payments
- Suitable for new businesses
- Debt protection solutions
Paragon Bank is a specialised banking business that is UK based and whose business is primarily focused on lending solutions. They offer a range of savings and lending products such as asset finance, invoice finance, structured lending, development finance and mortgages.
Paragon Bank offers an invoice factoring service that they refer to simply as invoice finance, but it operates as a factoring solution. They will release up to 95% of your invoice value and will take over your payment collection function with their expert credit control team. Their factoring solution is available to new businesses and is most suited to businesses with no or minimal credit control function.
Paragon Bank Invoice Finance website
21. Outsauce Financing
Some of the features and benefits of Outsauce Financing’s invoice factoring.
- Release up to 100% of invoice value
- Access tied up cash flow quickly
- Expert support
- Handles your credit control and sales ledger
- Dedicated to recruitment agencies
- Frees up management time from payment collection
- Flexible service that grows with your business
- Offers payroll services and other credit control solutions
- Can be used alongside their other services
- Optional bad debt protection insurance
Outsauce is a business who offers a range of back-office and financial solutions to the recruitment sector. Their services include payroll, finance and credit control solutions. Outsauce’s aim is to help recruitment agencies to grow and develop which they have been doing for over 15 years.
Outsauce’s invoice finance offers both invoice factoring and invoice discounting. Their invoice factoring service is most suited to businesses that have no or little back-office facilities to run credit control as the service takes over their credit control services and collects payment for the business. This is not a confidential service though but if a confidential service is required then invoice discounting is a better solution.
22. Trade Finance Global
Some of the features and benefits of Trade Finance Global’s invoice factoring.
- Release up to 90% of your invoice value
- Receive funds as soon as the same day
- Access cash flow quickly from unpaid invoices
- Choice of selective factoring or standard factoring
- Expert credit control service
- Chase payments for you
- Frees up management time
- Reduces risk and stress
- Transparent service
- Independent broker who will find the best deal for you
Trade Global Finance is an independent global trade and finance broker who provides a wide range of finance products in the UK and globally. These products include a flexible range of trade finance, finance products and business funding.
Trade Global Finance offers invoice finance solutions that include invoice factoring and invoice discounting. Their range of invoice factoring solutions allows businesses to access up to 90% of their unpaid invoice values within two days and some providers on the same day. Their lenders can offer traditional or selective factoring, but all services include managed credit control and sales ledger which gives smaller businesses expert support.
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FAQ
What is invoice factoring?
Invoice factoring is a financing method in which a company sells its unpaid invoices to a third-party factoring company. When a business sells an invoice, the factoring company pays a portion of the invoice value initially charged to the customer.
The third-party factoring company assumes complete responsibility for collecting the debt from the buyer. This transaction enables businesses to access funds immediately before receiving the invoice payment.
Who uses invoice factoring?
Numerous industries can benefit from invoice factoring services. The most common industries that use the service are as follows:
Transport industry
Fuel, salary, and vehicle maintenance expenses may fluctuate significantly, causing substantial cash flow concerns for people in the transportation industry.
Depending on the projects you accept, funding requirements may be intermittent or continuous. Setting up a factoring facility smooths out your cash flow each month, offering you considerable planning flexibility.
Manufacturing industry
The manufacturing industry has unique cost needs that this financing option may help meet. It’s often a never-ending cycle of mechanical repair and maintenance charges. When combined with the typical salary and facility costs, company owners frequently find themselves juggling money to remain afloat.
Logistics industry
Whether for regular contracts or a one-off delivery, there is not always enough accessible cash without jeopardising your monthly financial objectives when you need drivers. Factoring and discounting provide dependable cash injections, often offered within 24 hours of sending the invoice.
Security industry
Security invoice financing enables you to retain a positive corporate image within the security sector while also increasing employee security. Payments are sent to the company following the invoices you submit, with the only constraint on the amount of money accessible being the quantity of work you accept.
Commercial industries
An invoice factoring company can help commercial service organisations that provide credit terms to their customers bridge the payment gap. Waiting up to 90 days for payment is constraining. To chase customers is time demanding; there is also the risk of offending a valuable customer.
Is invoice factoring regulated?
Currently, the Financial Conduct Authority (FCA) does not regulate invoice factoring. Therefore, do your homework before selecting invoice factoring companies. Look into the potential hidden costs that aren’t immediately apparent.
When should a company consider factoring?
Factoring assists businesses with late-paying customers. For example, suppose your business cannot afford to wait 30 to 90 days or more for payment from customers. Factoring your invoices provides you with the cash flow necessary to operate your business.
What are the pros and cons of invoice factoring?
Here are some of the benefits of invoice factoring work:
– A secure and immediate source of cash flow through accounts receivable financing and the release of working capital held in unpaid invoices.
– It may save time spent on administration and tracking late payments since the factoring company bears responsibility for the outstanding invoices.
– Invoice finance may help you maintain positive cash flow management when your clients and customers have varying credit periods.
The disadvantages of invoice financing are:
– It may affect customer relationships since you must inform clients that a factoring company collects their remaining invoice amount.
– Because the factoring fee is far higher than a bank loan, this financing is suitable for companies with a large profit margin that can sustain the additional expenditures.
– Transferring responsibility for accounts receivable to factoring companies entails relinquishing credit control.
What is the average cost of factoring?
Invoice financing is as beneficial for small businesses and startups as for significant enterprises.
Invoice factoring cost varies between 0.75% and 15% of revenue, however; factoring firms will consider numerous aspects when determining eligibility, including the following:
– The size and source of the bills for which you are requesting payment
– Periods
– Potential dangers
– Your own business’s credit rating and reputation
This last aspect is less significant since the factor’s actual risk is associated with the entity that owes the unpaid invoice. This is because factoring providers are more concerned with the creditworthiness of your consumers than with your own.
Invoice financing may be an excellent option for small businesses, startups, and even businesses with bad credit since it enables them to access funds more efficiently. However, factoring costs may be somewhat higher for newer enterprises or those with poor credit.
What is the difference between invoice financing and factoring?
Invoice factoring accepts the whole outstanding amount, while invoice financing accepts invoices you intend to sell. This implies that you will retain control of your finances and company.
Companies may leverage invoice finance to boost cash flow, pay staff and vendors, and reinvest in business more immediately than if they had to rely on customers to pay their invoices in full.
Is invoice discounting cheaper than factoring?
Fees for invoice discounting are often less than those for factoring since you will continue to collect and handle debts independently. On the other hand, invoice factoring is less hazardous than invoice discounting. Most factoring companies supervise the credit control and collection processes in factoring.