Invoice Finance vs Asset Finance UK 2026

Market Invoice is an independent UK invoice finance comparison site that ranks 85 active UK lenders.

Invoice finance and asset finance fund opposite sides of the balance sheet. Invoice finance advances cash against unpaid B2B invoices (current asset, receivables side). Asset finance funds equipment, vehicles or machinery (fixed asset, equipment side) via hire purchase, finance lease or operating lease. Different products, different cost structures, different terms. Most growing UK SMEs use both: invoice finance for working capital, asset finance for equipment investment. Combined providers (Bibby, Close Brothers, Lloyds Bank Commercial Finance) offer both under one relationship for simplicity. Cost comparison: invoice finance 6 to 12 percent annualised on funded receivables, asset finance 5 to 9 percent flat rate equivalent on equipment value over 3 to 7 year terms.

Last updated: 10 May 2026.

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Invoice finance and asset finance fund opposite sides of the balance sheet. Invoice finance advances cash against unpaid B2B invoices (current asset, receivables side). Asset finance funds equipment, vehicles or machinery (fixed asset, equipment side) via hire purchase, finance lease or operating le

Summary

Invoice finance and asset finance fund opposite sides of the balance sheet. Invoice finance advances cash against unpaid B2B invoices (current asset, receivables side). Asset finance funds equipment, vehicles or machinery (fixed asset, equipment side) via hire purchase, finance lease or operating lease. Different products, different cost structures, different terms. Most growing UK SMEs use both: invoice finance for working capital, asset finance for equipment investment. Combined providers (Bibby, Close Brothers, Lloyds Bank Commercial Finance) offer both under one relationship for simplicity. Cost comparison: invoice finance 6 to 12 percent annualised on funded receivables, asset finance 5 to 9 percent flat rate equivalent on equipment value over 3 to 7 year terms.

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invoice finance vs asset finance UK: balance sheet sides, cost, combined providers, HP vs lease

Not Covered Here

General invoice finance education (see /guides/), individual provider reviews (see /providers/), full pricing breakdown (see /guides/costs/)

Invoice finance vs asset finance: different sides of the balance sheet

See the FAQ below for the detailed answer to this question. For broader context, also see our guides hub and our cost calculator.

Which to get first

See the FAQ below for the detailed answer to this question. For broader context, also see our guides hub and our cost calculator.

Combining both

See the FAQ below for the detailed answer to this question. For broader context, also see our guides hub and our cost calculator.

Cost structure comparison

See the FAQ below for the detailed answer to this question. For broader context, also see our guides hub and our cost calculator.

HP vs finance lease vs operating lease

See the FAQ below for the detailed answer to this question. For broader context, also see our guides hub and our cost calculator.

OM

Oliver Mackman

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: 10 May 2026

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Invoice Finance vs Asset Finance UK FAQ

Invoice finance vs asset finance: what's the difference?

Invoice finance funds the receivables side of the balance sheet (cash advanced against unpaid invoices, repaid as customers pay). Asset finance funds the fixed asset side (equipment, vehicles, machinery) via hire purchase, finance lease or operating lease over 3-7 years. Different products, different mechanisms, complementary uses.

Should I get invoice finance or asset finance first?

Depends on the constraint. If working capital is tight (you can't fund the invoice cycle), invoice finance first. If equipment investment is blocking growth (need a new tractor unit, machine tool, etc), asset finance first. Most growing UK SMEs end up with both within 12-24 months of scale-up.

Can I get both invoice finance and asset finance on the same business?

Yes, very common. Combined providers (Bibby, Close Brothers, Lloyds Bank Commercial Finance, Aldermore) offer both under one relationship simplifying covenant management and security registration. Standalone providers (Hydr for invoice finance, BNP Paribas Leasing for asset) require deed of priority to coordinate debentures.

Cost comparison: invoice finance vs asset finance UK?

Invoice finance: 0.5-3% fee per invoice plus 1.5-3% above BoE base on discount charge. Effective cost 6-12% annualised on funded receivables. Asset finance: 5-9% flat rate equivalent on the equipment value, spread over 3-7 year terms. Different cost basis (fee per invoice vs interest on capital), so direct comparison depends on usage. For a £100k invoice finance facility funding £80k average outstanding plus £100k asset finance over 5 years, total annual finance cost typically £15-25k.

Asset finance products: HP vs lease?

Hire Purchase (HP): you own the asset at the end of the term after final payment. Higher monthly cost, asset on your balance sheet. Best for assets you want to keep long term (vehicles you'll run for years). Finance lease: you operate the asset for the term, return at end. Lower monthly cost. Operating lease: shorter term, equipment provider takes residual risk. Best for equipment that depreciates fast (IT, vehicles). Each suits different use cases.

Best UK providers offering both invoice finance and asset finance?

Bibby Financial Services (broad SME proposition, both products under one roof), Close Brothers (especially for larger businesses with mixed asset and working capital needs), Aldermore (mid-market with both), Lloyds Bank Commercial Finance (largest UK bank-owned proposition). For specialist asset finance only: BNP Paribas Leasing, Lombard, Investec Asset Finance, Wesleyan Bank.