Invoice Finance vs Supply Chain Finance UK 2026

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

Invoice finance and supply chain finance (SCF, also called reverse factoring) fund the same underlying receivable but from opposite sides. Invoice finance is initiated by the seller (you sell your unpaid invoice to a finance provider for 70 to 90 percent advance). Supply chain finance is initiated by the buyer (your customer sets up a programme with their bank that pays approved supplier invoices early at a discount). SCF is typically cheaper for the supplier (1 to 3 percent above SONIA effective rate) because the cost is anchored to the buyer's credit profile. SCF only applies if your customer offers a programme; major UK buyers running SCF include large retailers, public sector, and FTSE corporates. The Greensill Capital collapse (2021) tightened SCF accounting treatment under IFRS but the product remains widely used and well-regulated post-2022.

Last updated: 10 May 2026.

Quick Reference

Direct Answer

Invoice finance and supply chain finance (SCF, also called reverse factoring) fund the same underlying receivable but from opposite sides. Invoice finance is initiated by the seller (you sell your unpaid invoice to a finance provider for 70 to 90 percent advance). Supply chain finance is initiated b

Summary

Invoice finance and supply chain finance (SCF, also called reverse factoring) fund the same underlying receivable but from opposite sides. Invoice finance is initiated by the seller (you sell your unpaid invoice to a finance provider for 70 to 90 percent advance). Supply chain finance is initiated by the buyer (your customer sets up a programme with their bank that pays approved supplier invoices early at a discount). SCF is typically cheaper for the supplier (1 to 3 percent above SONIA effective rate) because the cost is anchored to the buyer's credit profile. SCF only applies if your customer offers a programme; major UK buyers running SCF include large retailers, public sector, and FTSE corporates. The Greensill Capital collapse (2021) tightened SCF accounting treatment under IFRS but the product remains widely used and well-regulated post-2022.

This Page Covers

invoice finance vs supply chain finance UK: reverse factoring, Greensill aftermath, cost comparison, SCF availability

Not Covered Here

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

Invoice finance vs SCF: seller-initiated vs buyer-initiated

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

How supply chain finance works step by step

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

When SCF is available to your business

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

Cost comparison

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

Greensill collapse and current SCF market

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

Get 3 Quotes Matched to Your Business

Free, no obligation, 60 seconds.

Your details are secure. We only share them with matched providers. See our privacy policy.

85 providers in panel · 24hr indicative quotes · No obligation

Invoice Finance vs Supply Chain Finance UK FAQ

Invoice finance vs supply chain finance: what's the difference?

Invoice finance is initiated by the seller. Supply chain finance (reverse factoring) is initiated by the buyer. Both fund the same underlying receivable but with different cost structures (invoice finance priced on the seller's risk; SCF priced on the buyer's risk, usually cheaper).

How does supply chain finance work?

(1) Buyer (typically large retailer or FTSE corporate) sets up an SCF programme with their bank or specialist provider. (2) Buyer approves supplier invoices for early payment. (3) Supplier opts in to the programme. (4) Supplier sells approved invoices to the SCF provider at a small discount (1-3% above SONIA equivalent). (5) Supplier receives cash within 24-48 hours. (6) SCF provider collects from buyer on the original payment date.

When is SCF available to me?

Only if your major customers offer an SCF programme. Most large UK retailers (Tesco, Sainsbury's, B&Q), public sector buyers (DHSC, MoD via specific programmes), automotive OEMs, and FTSE 100 manufacturers run SCF programmes. Ask your customer's procurement team. SME-led customer relationships rarely have SCF available.

Cost comparison: invoice finance vs SCF?

Invoice finance: 0.5-3% fee per invoice plus 1.5-3% above BoE base discount charge. Effective cost 6-12% annualised. SCF: 1-3% above SONIA equivalent rate (so 5.5-7.5% APR currently). SCF is typically cheaper because the cost is anchored to the buyer's credit profile, not the supplier's.

Greensill collapse: is SCF still safe?

Yes for properly structured programmes. Greensill Capital collapsed in March 2021 due to its specific business model risks (ABS securitisation against single-customer concentration, opaque accounting treatment). The mainstream SCF market run by banks and specialist fintechs (Taulia, PrimeRevenue, C2FO, Tradeshift) continues with tighter accounting standards under IFRS and clearer disclosure requirements. Use accredited providers and ensure the programme is properly disclosed in your accounts.

Can I use both invoice finance and SCF?

Yes, on different customer invoices. SCF on the customers that offer programmes (typically the largest), invoice finance on customers that don't. Many UK businesses with mixed customer bases (a few FTSE corporates plus a long tail of SME customers) use SCF for the corporates and invoice finance for the SME-side receivables. Coordinate carefully so the same invoice isn't double-financed.