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.
Manufacturing is the second-largest sector for UK invoice finance, drawing £5.1 billion in 2025. Invoice finance funds materials, tooling and labour paid before production while customers pay 30 to 60 days after delivery. More detail + scope
Summary
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 are paid before production starts, but customers pay 30 to 60 days after delivery. On a £200,000 order with 60-day terms, a manufacturer funds £200,000 of production cost out of pocket for two months. Invoice finance removes that burden.
This page covers
Invoice finance for UK manufacturers, sector funding volume, production cost timing and customer payment terms
Not covered here
Specific provider reviews (see /providers/), general invoice finance education (see /guides/), food and engineering (see /industries/)
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.
For a deeper look at how supply chain pressure and 60 to 90 day payment terms squeeze manufacturers, read our guide to invoice finance for manufacturing SMEs.
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.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
Last reviewed: 18 June 2026