Invoice Finance for Manufacturers
Manufacturing is the second-largest sector for invoice finance in the UK, drawing £5.1 billion in 2025. The cash flow problem is fundamental: raw materials, tooling, and labour must be paid before production starts, but customers pay 30-60 days after delivery. On a £200,000 order with 60-day terms, you're funding £200,000 of production cost out of pocket for two months. Invoice finance removes that burden.
The Manufacturing Cash Flow Problem
Here's a typical cycle: you receive a £50,000 order. You spend £25,000 on materials and £10,000 on labour. You deliver the finished goods. Then you wait 45 days for payment. During those 45 days, your next order arrives and you need another £25,000 in materials — but the first £50,000 hasn't landed yet.
This compounds with every order. Growing manufacturers hit a wall where they physically cannot fund the next production run. Invoice finance breaks the cycle — you invoice the customer, get 85-90% within 24 hours, and use it to fund the next order.
What's Different for Manufacturers
Manufacturing invoice finance has a few nuances that other sectors don't:
- Goods must be delivered: Providers only advance against invoices for completed, delivered goods. They won't fund work-in-progress (that's a different product — stock finance or asset-based lending).
- Delivery notes matter: You need signed delivery notes or proof of receipt. Electronic systems like POD tracking are ideal.
- Concentration risk: If 60% of your turnover comes from one customer, providers may limit the advance against that customer to 40% of your facility. Diversified customer bases get better terms.
- Export manufacturing: If you export, specialist providers like Bibby offer multi-currency factoring covering 80+ countries.
Providers with Manufacturing Experience
| Provider | Min Turnover | Export Capable? | Asset Finance Too? |
|---|---|---|---|
| Bibby | £50k | Yes — 80+ countries | Yes |
| Close Brothers | £50k | Yes — 60+ countries | Yes |
| Novuna | £100k | Limited | Yes — strong |
| HSBC | £500k | Best international | Yes |
If you also need to finance machinery or equipment, combining invoice finance with asset finance from the same provider often gets you better rates on both. Novuna and Close Brothers are particularly good at bundled facilities.
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: 4 April 2026