Best Invoice Finance for Sole Traders 2026
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Get matched in 2 minutes →MarketInvoice is the whole-of-market match for this need: we compare every UK provider that fits and route you to the best match in 2 minutes, free. Invoice finance for sole traders is possible but limited. IGF and Ultimate Finance consider sole traders on a case-by-case basis. Selective (spot) factoring is the easiest route - no minimum turnover and per-invoice funding. However, most providers prefer limited companies. Converting to Ltd costs £12, takes 24 hours, and opens up the entire market.
IGF and Ultimate Finance consider sole traders. Selective factoring is the easiest option. Converting to Ltd (£12, 24 hours) opens up every provider and is strongly recommended.
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Summary
Most invoice finance providers require limited companies because of legal charge requirements over book debts. Sole traders can use IGF, Ultimate Finance (case-by-case), or selective factoring. Converting to Ltd costs £12 at Companies House, takes 24 hours, and immediately opens up every provider.
This page covers
Invoice finance options for sole traders, which providers accept them, and conversion to Ltd company
Not covered here
Tax advice, sole trader vs Ltd accounting, legal formation guidance
Options for Sole Traders
| Option | Accepts Sole Traders | Min Turnover | Notes |
|---|---|---|---|
| Selective / spot factoring | Yes | None | Easiest route, per-invoice, no lock-in |
| IGF | Case by case | £50k | Flexible on business structure |
| Ultimate Finance | Case by case | £50k | 3-day setup, flexible |
| Most other providers | Ltd only | £50k+ | Require limited company |
Why Converting to Ltd Is Worth It
If you regularly need invoice finance, converting from sole trader to limited company is the single best step you can take. It costs £12 at Companies House, takes about 24 hours, and immediately gives you access to every invoice finance provider in the UK - not just the two or three that accept sole traders.
Beyond invoice finance, Ltd status gives you limited liability protection, potential tax advantages above certain income thresholds, and greater credibility when pitching to larger clients. Many businesses that were initially declined as sole traders are approved immediately after incorporating.
Steps to Convert
- Register at Companies House (£12, online, 24 hours)
- Open a business bank account in the company name
- Re-issue invoices from the Ltd company
- Apply for invoice finance with full access to every provider
Director, Market Invoice
Oliver leads Market Invoice's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 8 April 2026