Invoice Factoring UK 2026

Invoice factoring lets a UK business sell its unpaid B2B invoices to a factoring company, which advances about 80% to 90% within 24 to 48 hours and then collects payment from your customers. It suits smaller firms without a credit-control team and is disclosed, so customers know a factor is involved. On Market Invoice's scoring the best UK factoring companies for 2026 are Sonovate, Close Brothers Invoice Finance, Bibby Financial Services.

Last reviewed: 2026-05-27. Ranking covers 23 UK companies that offer factoring, with full structured terms in our dataset.

Invoice factoring is invoice finance where a provider advances 80-90% of unpaid B2B invoices within 24-48 hours and collects payment from your customers. The best-rated UK factoring companies for 2026 are Sonovate, Close Brothers Invoice Finance, Bibby Financial Services, Ultimate Finance, Aldermore Invoice Finance. More detail + scope

Summary

Invoice factoring is a disclosed invoice-finance facility: the provider advances most of an invoice's value upfront and runs collections, so it suits smaller UK businesses without their own credit control. It costs more than confidential invoice discounting because the provider also chases payment. Market Invoice ranks 23 UK factoring companies by overall editorial rating, transparency and setup speed; Sonovate leads at 4.6/5.

This page covers

What invoice factoring is, how it differs from discounting, what it costs in 2026, and 23 UK factoring companies ranked with min turnover, advance rate and setup speed

Not covered here

Confidential invoice discounting (see /invoice-discounting/), the full company ranking (see /best/invoice-finance-companies-uk-2026/), the full dataset (see /data/uk-invoice-finance-rate-index/)

How invoice factoring works

You raise an invoice to a customer as normal and send a copy to the factoring company. It advances a percentage of the value, typically 80% to 90%, into your account within a day or two. The provider then collects payment from your customer on the normal terms. When the customer pays, you receive the remaining balance minus the service charge and the discount charge on the cash you used. Because collections are handled for you, factoring also removes the admin of chasing late payers.

Best UK Invoice Factoring Companies 2026

Companies that offer factoring, ordered by overall editorial rating, then transparency, then setup speed. Service charges are starting rates for each company's lowest-risk client; a discount charge of base rate (3.75% as of 18 December 2025) plus margin applies on the cash advanced.

# Company Type Min turnover Advance Setup Rating
1 Sonovate Recruitment specialist No minimum Up to 100% 2 working days 4.6
2 Close Brothers Invoice Finance Independent £500k Up to 90% 5 working days 4.5
3 Bibby Financial Services Independent £100k Up to 90% 5 working days 4.4
4 Ultimate Finance Independent £100k Up to 90% 3 working days 4.3
5 Aldermore Invoice Finance Independent £250k Up to 90% 7 working days 4.2
6 Novuna Business Finance Independent £500k Up to 90% 7 working days 4.2
7 Skipton Business Finance Independent £100k Up to 90% 5 working days 4.2
8 Time Finance Independent £250k Up to 90% 7 working days 4.1
9 IGF (Independent Growth Finance) Independent £500k Up to 90% receivables + stock + plant 10 working days 4.1
10 ABC Finance Independent Varies by funder Up to 90% (funder dependent) 3 to 10 working days 4.0
11 Capitalise Fintech Varies by funder Up to 90% (funder dependent) 3 to 10 working days 4.0
12 eCapital Independent £100k Up to 90% 5 to 10 working days 4.0
13 Swoop Funding Fintech Varies by funder Up to 90% (funder dependent) 3 to 10 working days 4.0
14 Touch Financial Independent Varies by funder Up to 90% (funder dependent) 3 to 10 working days 4.0
15 White Oak (UK) Independent £50k Up to 90% 5 to 10 working days 4.0
16 HSBC Invoice Finance High street bank £500k Up to 90% 10 to 15 working days 4.0
17 Lloyds Bank Commercial Finance High street bank £500k Up to 90% 10 to 15 working days 4.0
18 Apollo Business Finance Independent Varies by funder Up to 90% (funder dependent) 3 to 10 working days 3.9
19 Fund Invoice Discounting Independent Varies by funder Up to 90% (funder dependent) 3 to 10 working days 3.9
20 SME Invoice Finance Independent £50k Up to 90% 5 to 10 working days 3.9
21 Barclays Invoice Finance High street bank £500k Up to 90% 10 to 15 working days 3.9
22 NatWest Invoice Finance High street bank £500k Up to 90% 10 to 15 working days 3.9
23 Santander Invoice Finance High street bank £500k Up to 85% 10 to 15 working days 3.8

Source: Market Invoice analysis, last reviewed 2026-05-27. Ratings are editorial, set from published criteria and Companies House records. Inclusion and ranking are never paid for. See the UK Invoice Finance Rate Index for the full dataset.

Factoring vs invoice discounting: when each wins

Factoring wins when

  • You have no dedicated credit-control team and want collections handled.
  • Turnover is smaller or the business is younger.
  • You want help reducing late payment and bad debt.
  • You are comfortable with customers knowing a factor is involved.

Discounting wins when

  • You run your own credit control effectively.
  • Confidentiality matters and customers must not know.
  • Turnover is larger and you want a lower service charge.
  • You want to keep the customer relationship fully in-house.

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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: 27 May 2026

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Invoice Factoring FAQ

What is invoice factoring?

Invoice factoring is a form of invoice finance where a UK business sells its unpaid B2B invoices to a factoring company. The provider advances around 80% to 90% of the invoice value within 24 to 48 hours, then collects payment from your customers directly and releases the balance, minus its fees, once they pay. Because the provider manages collections, factoring is disclosed: your customers know a factor is involved.

What is the difference between invoice factoring and invoice discounting?

With factoring the provider runs credit control and chases your customers, and the arrangement is usually disclosed. With invoice discounting you keep control of your own collections and the facility is normally confidential, so customers never know. Factoring suits smaller businesses without a dedicated credit-control team; discounting suits larger, established firms with their own finance function.

How much does invoice factoring cost in 2026?

Factoring has two charges: a service charge of roughly 0.75% to 3% of invoice value (it is higher than discounting because the provider also runs collections), and a discount charge of the Bank of England base rate (3.75% as of 18 December 2025) plus a margin of about 1.5% to 3% on the cash advanced. Total effective cost is typically 1% to 3% of annual turnover.

Which are the best invoice factoring companies in the UK?

On Market Invoice's editorial scoring, the top-rated UK factoring companies for 2026 are Sonovate, Close Brothers Invoice Finance, Bibby Financial Services, Ultimate Finance, Aldermore Invoice Finance. Ranking weights overall rating, then transparency, then setup speed. The best fit depends on your turnover, sector and whether you need a specialist (for example construction or recruitment).

Is invoice factoring confidential?

Standard factoring is disclosed, meaning your customers are told their invoices have been assigned and they pay the factor directly. If confidentiality matters, confidential invoice discounting keeps collections in your name and customers are never aware a facility exists. Some providers also offer confidential factoring for stronger businesses.