Finding the right invoice factoring company can transform your business’s cash flow and accelerate growth. With over 140 invoice factoring providers operating in the UK market as of 2025, choosing the best one requires careful evaluation of rates, advance percentages, industry expertise, and service quality. This comprehensive guide reviews the leading UK invoice factoring companies, helping you identify the best partners for your business’s specific needs and circumstances.
What is invoice factoring?
Invoice factoring allows you to sell your invoices to a third party at a percentage value of the full amount. This lender will then usually take on the responsibility of managing your customers and ensuring that they pay their invoices. They make their money through the difference between the full amount of the invoice and the percentage that they have allowed your business to draw down. Usually, this is around 70 – 95%, with leading providers like Kriya, Skipton Business Finance, and Bibby Financial Services now offering up to 90% advances. The lender will also take an administration fee, which is based on the “difficulty” of the invoices you have sold them. The more work they need to do to recover the debt, the more they will charge.
As a business, you can either sell your entire sales ledger and have a monthly facility to draw down your percentage as required, or you can sell selected invoices – for example, those that usually pay large amounts monthly.
The benefits of invoice factoring
- The most important benefit of invoice factoring is that you get access to the value of the invoice before it has been paid. If your customer has 120-day payment terms, this can mean that you have those funds working for you, rather than for them, for upwards of 3 or 4 months.
- Invoice factoring also saves you time on the administration of your invoices and chasing the payments. Credit control can be a difficult task, especially when you want to avoid creating a bad relationship with your customer. Leaving this to a professional can take away that additional stress.
Invoice factoring lenders
While these types of lending arrangements are very common, it is important to do due diligence when deciding which invoice factoring lender to go with. Based on our 2025 market analysis, here are the best invoice factoring companies in the UK:
Bibby Financial Services – UK’s largest independent provider supporting 7,000+ businesses. Offers up to 100% advances with 28-day rolling contracts. Specialises in construction and recruitment.
Close Brothers Invoice Finance – Award-winning provider with 3,700+ professionals. Specialises in recruitment through the iDeal platform. Requires £750k+ turnover.
RBS FacFlow – Comprehensive banking support with dedicated industry experts and bad debt protection.
HSBC Invoice Finance – A major high street bank offering invoice finance to businesses with a £250,000+ turnover. Provides credit protection, international factoring, and online account management.
Excelerate Payments – Specialist invoice finance provider offering flexible funding solutions with competitive rates for SMEs.
Each will have a number of factors you should consider before signing on the dotted line:
- What “factor” percentage are they willing to give you? (Current market leaders offer 80-95%, with some offering up to 100%)
- What is their fee and how much administration do they offer for this fee? (Competitive rates now range from 0.5-5% monthly)
- Will they allow you to choose the invoices that go into the ledger, or will they want all of your invoices?
- Do they accept invoices that are paid by overseas clients?
- How long is the contract for, and how flexible is it for you to leave when your cashflow issues are resolved? (Leading providers now offer 28-day rolling contracts)
- Will your lender allow you to keep control of your customer relationships, or will they take over entirely?
- What level of creditworthiness do you and your customers need to have to be eligible?
- Do they offer bad debt protection and credit insurance options? (Most top providers now include this)
- What are their minimum turnover requirements? (Ranges from £100k-£750k annually depending on provider)
- Can they integrate with your existing accounting software? (Leading providers offer seamless integration)
- Do they provide dedicated account management and industry expertise? (All top-tier providers include dedicated managers)
On Lenders
Lenders will also have criteria that they need you to fit before they will agree to lend. These will vary depending on the lender, the factor percentage they want to take, the fee they will charge, your personal and business credit worthiness and your yearly turnover. Leading providers like Kriya require UK/Ireland LLP registration, Skipton Business Finance requires a minimum £250k turnover, while Metro Bank accepts startups without first-year accounts. Most require a minimum of 12 months of trading history, though some providers accept 6 months with additional services.
When deciding you’re the right lender for you, we suggest you use an invoice factoring calculator to establish the criteria you are looking for and what your monthly payments could be. This will give you a list of possible lenders, and you can compare based on your personal requirements.
Don’t forget that there are a number of other lending options for businesses – even those that are new or have a low turnover.
Invoice factoring is an excellent option if you have customers with regular payments or those who pay after long wait times. With the market becoming increasingly competitive in 2025, businesses now have access to better rates, more flexible terms, and enhanced service levels than ever before. The top providers mentioned above represent the best options currently available for UK businesses. As with all types of lending, you should do your homework, and this is where comparison sites and calculators can provide a wealth of knowledge to help you decide on the best invoice factoring lender for you.
Get in touch with us at Funding Bay for your invoice financing needs.
