Invoice Finance for Small Business UK

Invoice finance lets a small business get paid on its invoices to other businesses before the customer pays. A lender pays you most of each invoice now and the rest, less fees, when the customer pays. You can put all your invoices through it (whole-turnover) or pick single invoices (selective or single-invoice finance). Some lenders that fund single invoices publish no minimum turnover; banks that publish one start at £100,000 a year.

Why small businesses use it

Government research published in July 2025 estimates that UK businesses are owed about £26 billion in late payments at any given time, and that late payment costs the economy almost £11 billion a year (Department for Business and Trade and Small Business Commissioner).

If you wait 30 to 90 days to be paid, invoice finance lets you use that money sooner. It is repaid when your customer pays, so there is no fixed monthly repayment, and the amount you can draw goes up as you invoice more. An overdraft, by contrast, has a fixed limit.

Whole-turnover, selective or single invoice

Fees are set by each lender and most do not publish them. See factoring vs discounting and selective invoice finance for more on each.

Lenders and their published minimums

Smaller businesses should look first at lenders with no published minimum or a low one. The larger minimums are shown so you can rule lenders out quickly.

Figures as published on each lender's own website, checked 14 October 2026. Most of these lenders do not publish their fees.

For more lenders see the provider directory, and for sector pages see best invoice finance by sector.

A worked cost example

All fees here are made up to show how the parts add up; they are not a quote from any lender. A business sells £750,000 a year on 45-day terms. On average about £92,466 is unpaid at any one time (£750,000 x 45 / 365). With an 85% advance, about £78,596 is drawn on average.

• Service fee of 1.5% of turnover: £11,250 a year
• Discount charge at base rate (3.75%, Bank of England) plus 2%, so 5.75% a year on £78,596: £4,519 a year
• Total: £15,769 a year

To compare with an overdraft, work out the interest on the amount you would actually borrow, plus any fees, and remember an overdraft limit does not grow with your sales. For more on costs see our invoice finance costs guide, or try the calculator.

Common reasons for a no

1. One customer owes most of the money. Lenders limit how much they fund against any one customer. See concentration risk.
2. Another lender already has security. If a bank holds a debenture, the lenders must agree who has first claim.
3. Invoices in dispute. Lenders fund invoices the customer has accepted. Keep orders and delivery notes.
4. Sales to the public. Only invoices to businesses can be funded.
5. Short trading history or credit problems. Some lenders still help; say so up front and ask.

What to have ready

1. Your latest accounts, or management accounts if you are new
2. An aged debtor list (most accounting software can export one)
3. Sample invoices and contracts with your largest customers
4. Recent bank statements
5. ID for the directors
6. Details of any existing security over the company

To start, request a free quote, or browse by sector at /industries/.

How we make money: Market Invoice is an independent comparison service, not a lender. Our introduction partner pays us a fixed fee for each business we introduce, whether or not you go ahead; you never pay us and it is never added to your costs. How we are funded.