Why High Street Banks Are Retreating from SME Invoice Finance in 2026

Some UK banks have narrowed their invoice finance offer over the past few years rather than leaving in one go. Barclays moved its factoring book to 4Syte in 2021 and now offers invoice discounting only; Aldermore sold a division to Bibby Financial Services in 2023; Virgin Money is not taking new invoice finance customers. If your facility is with a bank, check what it still offers before your next review, and compare quotes from other lenders.

What has actually changed

• Barclays: in February 2021 Barclays agreed to transfer assets from its factoring portfolio to 4Syte (4Syte announcement). Its invoice finance page now offers confidential invoice discounting only. See our Barclays review.
• Aldermore: in June 2023 Bibby Financial Services bought Aldermore's Working Capital Finance division (Bibby announcement). Aldermore still offers invoice finance under its own name. See our Aldermore review.
• Virgin Money: its business moved to Nationwide in April 2026 and it is not taking new invoice finance customers. See our Virgin Money page.
• NatWest: its website lists invoice discounting, for businesses with turnover over £300,000, but no factoring. See our NatWest review.
• Handelsbanken: its UK website no longer mentions invoice finance (checked 10 October 2026). See our Handelsbanken page.

We have not found a public source that says banks as a group are leaving the market, so we don't claim one. Other banks, such as Lloyds, HSBC and Santander, still list invoice finance on their websites.

What this means if you already have a facility

If your bank has changed its offer, it may change your terms or suggest another provider at your next review. That does not automatically mean worse terms, but it does mean the comparison you would normally do every few years should happen sooner. Check your agreement for the minimum term left, any early termination fee, and whether a deed of priority would be needed if your debtors are also security for other lending. Don't wait for the bank to raise it first.

How to compare other lenders

Compare lenders on total cost, how fast they pay, and how they deal with your customers, not just the headline rate. Most lenders do not publish their charges, so ask for the full fee schedule in writing, including minimum service charges, payment fees and any charge for the part of the facility you don't use. Discount charges are usually set as a margin over the Bank of England base rate, currently 4%. A lower rate with a high minimum service charge can cost more than a slightly higher rate with none. Our list of UK invoice finance companies shows who is still trading.

Red flags when switching

The main risks are a long minimum term, unclear termination fees and a deed of priority that takes longer than expected to arrange. Get the minimum term, notice period and exit fee confirmed in writing before you sign. A provider unwilling to put these in writing before contract stage is itself a warning sign.

Step by step

1. Check your current facility agreement for the minimum term remaining and any early termination fee
2. Ask your bank directly whether it plans to renew, change your terms or refer you elsewhere at your next review
3. Get full written fee schedules from at least two other lenders, not just their headline rate
4. Compare the total annual cost of each: discount charge, service charge and minimum fees
5. Confirm how a deed of priority would be arranged if you have other secured lending against the same debtor book
6. Give notice and time the switch so there is no gap in funding between the old and new facility

FAQs