Invoice finance companies in the UK: facilities, fees and minimums

Start with the type of facility you need, then compare invoice finance companies that offer it. Our guide to invoice finance explains how the product works. In short, a provider advances most of an invoice’s value when you raise it and pays you the balance, less its charges, when your customer settles. Before you look at price, check these five points:

• Who collects. With factoring, the provider runs credit control and chases your customers. With invoice discounting, you keep collecting.
• Whether customers are told. Confidential facilities keep the arrangement private. Disclosed ones notify your customers.
• Whole ledger or selected invoices. Some providers fund every invoice. Others let you choose single invoices.
• Size. Providers publish minimum turnover, facility ranges or invoice sizes. A business outside the range will be declined.
• Contract. Some facilities run for a minimum term with notice to leave. Others are pay-as-you-go.

Our comparison of invoice discounting and factoring covers the first two choices in detail.

The table shows each provider’s invoice finance products in its own published words, taken from its profile in our directory of UK business lenders. Providers are listed in alphabetical order. Where a provider has not published a figure, the table says so.

A provider’s terms can change after the date shown, so check its own pages before you rely on a figure. Most providers do not publish their fees.

These notes come from each provider’s profile, which records its own published criteria.

• Aldermore Bank offers invoice discounting and factoring, advancing up to 90% of invoice value, and generally looks for a minimum turnover of £750,000. It says contract length is negotiable and that it takes security over your debtors.
• Bibby Financial Services offers factoring and confidential invoice discounting, typically advancing up to 85%, and says invoice finance typically suits UK businesses selling to other businesses on 30 to 90 day terms.
• Cynergy Bank provides receivables finance within facilities of £200,000 to £40 million per business, and says facilities other than asset finance and block discounting must include a receivables component.
• eCapital advances up to 90% on confidential invoice discounting and up to 80% on selective invoice finance, where you choose which invoices to fund.
• Hydr runs a disclosed product that it says advances up to 100% of the value of the invoices you select, for a fixed fee quoted up front.
• Kriya publishes invoice finance facilities from £100,000 to £3 million or more, advancing up to 90% of invoice value, with contracts starting from 12 months.
• Partnership Invoice Finance offers recourse factoring and disclosed invoice discounting for funding up to around £1 million, for start-ups and SMEs.
• Penny funds single invoices of £500 to £500,000 by spot factoring or confidential discounting, with no commitment to fund the whole ledger and no long-term contract described. It works in England, Scotland and Wales only.
• Team Factors offers factoring facilities up to £1.5 million with advances up to 90%, and handles credit control.
• TP24 offers a CreditLine of £250,000 to £5 million backed by receivables, charging interest only on what you draw, and says it takes no personal guarantee or floating charge.
• Triver advances against selected invoices, £100 to £100,000 per advance within a facility of up to £1 million, and says it does not contact your customers or register a charge.

Invoice finance is usually priced with two charges: a service fee, often a percentage of turnover or of each invoice, and a discount charge, which works like interest on the money you have drawn. Some providers quote one fixed fee per invoice instead. Comparing the headline percentage alone misses most of the cost, so ask each provider for these in writing:

• The service fee and what it is a percentage of: total turnover, funded invoices or the facility limit.
• The discount charge, and the rate it is set above.
• Any minimum monthly or annual fee, which you pay even if you draw little.
• Set-up, audit, refactoring and termination fees.
• The minimum contract term and notice period.
• Whether bad debt protection is included or extra. Bibby, eCapital and Team Factors all list it as an option.

Because the discount charge runs until your customer pays, slow payers cost more. Our page on debtor days and creditor days shows how to measure how long your customers take.

Invoice finance is built for businesses that sell to other businesses on credit terms. The providers above publish similar basic conditions, subject to status and their own criteria:

• Invoices to business or public sector customers, not to consumers.
• Goods delivered or work completed before the invoice is funded.
• Payment terms within the provider’s range, such as 10 to 120 days at Triver or up to 90 days at Penny.
• A minimum size where one applies, such as Aldermore’s general £750,000 turnover minimum.
• Access to your accounting software or sales ledger, which some providers connect to directly.

Your customers’ payment terms also matter. GOV.UK guidance says agreed payment dates between businesses should usually fall within 60 days, and where no date is agreed a payment is late 30 days after the customer receives the invoice or the goods or service, whichever is later. Our guide to late payment interest covers what you can charge.

Whole-ledger facilities commonly take security over your debtors, and some also ask for a debenture over the company or a guarantee from the directors. Aldermore, for example, says it takes security over your debtors. Others publish lighter terms: TP24 says it does not rely on a personal guarantee or floating charge, and Triver says there is no registered charge against your business.

Where a company gives a charge, GOV.UK guidance says it should be registered at Companies House within 21 days of being created. Our guide to what a debenture is explains what a lender can do under one.

Invoice finance suits a business whose cash is tied up in unpaid invoices. Other options fit other gaps:

• Supply chain finance, where a large customer’s finance provider pays you early.
• A revolving credit facility or overdraft, for gaps not tied to particular invoices.
• Unsecured business loans for a one-off cost.
• Asking customers for deposits or staged payments, which reduces the gap at source.

Capzy is a credit broker, not a lender, and the provider pays us when a facility completes. We describe providers from their own published terms and do not rank them. You can check your funding options with a soft search that does not affect your credit score. A provider’s full application may use a hard search, and all funding is subject to status and lender criteria.