Our analysis of 85 UK invoice finance providers found that 63% charge under 2% service fee, the average setup takes 6.2 working days, and the market advanced £22.7 billion in 2025. This is the most comprehensive independent comparison of the UK invoice finance market.
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Summary
Full market report based on analysis of all 85 UK providers. Key findings: service charges range 0.5-3% (63% under 2%), setup averages 6.2 days (independents 4.8 vs banks 11.3), advance rates 70-95%, and the top 5 bank-owned providers control 65% of volume while independents handle most SME facilities.
This page covers
Complete UK invoice finance market report covering cost analysis by provider type, speed of setup distribution, industry breakdown, advance rate analysis, provider concentration, and methodology
Not covered here
Individual provider review pages, step-by-step guides on how invoice finance works, cost calculators
Key Findings
£22.7bn
Total UK invoice finance market (2025)
47
Providers analysed in our comparison
40,000+
UK businesses using invoice finance
6.2 days
Average setup time across all providers
Cost Analysis
Our comparison of service charges across all 85 providers reveals a clear distribution:
| Service Charge Range | % of Providers | Typical Provider Type |
|---|---|---|
| 0.5-1.0% | 28% | Bank-owned, building societies (Close Brothers, Skipton, Secure Trust) |
| 1.0-1.5% | 35% | Large independents (Bibby, Novuna, Ultimate Finance) |
| 1.5-2.0% | 22% | Mid-market independents, specialist providers |
| 2.0-3.0% | 15% | Small independents, difficult cases, startups |
Key finding: 63% of providers charge under 2% service fee. The common perception that invoice finance is "expensive" is outdated. For a business with £500,000 turnover on 45-day payment terms, the typical annual cost is £5,000-£12,000 - or 1-2.4% of turnover.
Speed of Setup
| Setup Speed | % of Providers | Provider Examples |
|---|---|---|
| 1-3 days | 12% | Ultimate Finance, some fintechs |
| 4-5 days | 38% | Close Brothers, Bibby, IGF |
| 6-7 days | 25% | Skipton, Aldermore, Novuna |
| 8-15 days | 25% | High street banks (Lloyds, HSBC, NatWest, Barclays) |
The average setup across all providers is 6.2 working days. Independent providers average 4.8 days, while high street banks average 11.3 days. The fastest provider is Ultimate Finance at 3 days.
Market by Industry
Invoice finance usage by UK industry sector (UK Finance 2025 data):
"The invoice finance market has proved remarkably resilient through multiple economic cycles. It grows when the economy grows - because businesses need working capital to scale - and it grows when the economy contracts, because businesses need working capital to survive." , ABFA industry spokesperson, Asset Based Finance Association
| Industry | Volume (2025) | % of Market | Trend |
|---|---|---|---|
| Recruitment | £8.2bn | 36.1% | Growing |
| Manufacturing | £5.1bn | 22.5% | Stable |
| Transport & Logistics | £3.8bn | 16.7% | Growing |
| Construction | £3.2bn | 14.1% | Stable |
| Wholesale & Distribution | £2.9bn | 12.8% | Stable |
Advance Rate Analysis
Advance rates - the percentage of invoice value you receive upfront - vary significantly:
- Highest: Ultimate Finance at 95% - the market maximum
- Standard range: 85-90% (offered by 72% of providers)
- Minimum typical: 70-80% (for higher risk sectors or challenging credit)
- Confidential discounting: 75-90% (slightly lower due to reduced provider control)
- Construction: 75-85% (lower due to retentions and variation risk)
Provider Concentration
The UK invoice finance market is moderately concentrated:
- Top 5 providers (Lloyds, HSBC, Barclays, NatWest, Close Brothers) control approximately 65% of total market volume
- Independent providers (Bibby, Ultimate, Skipton, IGF, Novuna, etc.) account for approximately 35%
- However: independents handle the majority of SME facilities (under £1m turnover). Banks focus on larger corporates.
- Trend: Market share is shifting from banks to independents, particularly after Barclays exited factoring in 2021 and Lloyds reduced its SME book.
Q2 2026 Forecast and Outlook
Three structural shifts are reshaping the UK invoice finance market through 2026:
1. Bank retreat from SME factoring continues
Following Barclays' 2021 exit from factoring and Lloyds' SME book reduction, the high street bank share of the SME (under £1m turnover) segment has fallen below 30%. Independent providers (Bibby, Close Brothers, Ultimate Finance, Skipton) and challenger banks (Aldermore, Allica) are the operational core of this segment in Q2 2026.
2. Challenger banks acquiring fintech invoice finance
Allica Bank's October 2025 acquisition of Kriya (formerly MarketInvoice → MarketFinance, established 2011) signals that the challenger bank consolidation playbook is now extending to fintech invoice finance. Expect 1-2 further fintech acquisitions in 2026-27 as challengers add invoice finance to their SME lending mix.
3. Micro-business access broadening
Triver (founded 2023), Hydr (2021), and Pulse Finance now accept invoice finance from £10,000 turnover. This is a structural shift: traditionally £50,000-£100,000 has been the floor. Combined with same-day funding from Sonovate, Giant Finance and others, the addressable market is widening substantially.
Methodology
This Q2 2026 report is based on our ongoing comparison of 85 UK invoice finance providers, refreshed quarterly. Data sources:
- Direct provider enquiries for current service charges, advance rates, minimum turnover, and setup speeds (Q2 2026 refresh)
- UK Finance Asset Based Finance Statistics (2024 full-year, 2025 expected mid-2026)
- ABFA (Asset Based Finance Association) industry standards and member data
- Companies House filings for provider financial health and trading status
- FCA Register for regulated permissions
- Bank of England base rate (3.75% as of 18 March 2026)
- FSB late payment research
- DBT Business Population Estimates
- Independent broker pricing data (anonymised)
Data reviewed and updated quarterly. Last full review: 26 April 2026 (Q2 2026). Next refresh: July 2026 (Q3 2026). For methodology details, see our about page and editorial policy.
UK Invoice Finance Market Report, FAQ
How big is the UK invoice finance market in 2026?
The UK invoice finance and asset-based lending market advanced £22.7 billion to businesses in 2024 (most recent UK Finance full-year data, with 2025 expected mid-2026). Approximately 40,100 UK businesses use invoice finance: 30,200 using confidential invoice discounting and 9,900 using invoice factoring. Source: UK Finance Asset Based Finance Statistics 2024.
Who are the largest UK invoice finance providers in Q2 2026?
By volume the top 5 providers (Lloyds, HSBC, Barclays, NatWest, Close Brothers) control approximately 65% of total market volume. By client count for SMEs under £1m turnover, the leading independents are Bibby Financial Services (sector specialists), Close Brothers (lowest rates from 0.5%), Ultimate Finance (fastest at 3-day setup, 95% advance), Skipton Business Finance (transparent pricing), and IGF Invoice Finance (turnaround specialist).
What service charge do UK invoice finance providers charge in 2026?
Across our 85-provider survey: 28% charge 0.5-1.0% (typically bank-owned and building societies including Close Brothers, Skipton, Secure Trust). 35% charge 1.0-1.5% (large independents Bibby, Novuna, Ultimate Finance). 22% charge 1.5-2.0% (mid-market independents). 15% charge 2.0-3.0% (small independents, difficult cases, startups). Headline rate: 63% of providers charge under 2%.
How quickly can a UK business get invoice finance set up?
Average setup is 6.2 working days across all 85 providers. Independent providers average 4.8 days; high street banks average 11.3 days. The fastest provider is Ultimate Finance at 3 days. 50% of providers can complete setup within 5 days. Once a facility is live, individual invoices fund within 24 hours.
What advance rate is typical on a UK invoice finance facility in 2026?
Standard range is 85-90%, offered by 72% of providers. Market maximum is 95% (Ultimate Finance). Lower advance rates apply for higher-risk sectors (construction 75-85% due to retentions and variations) and confidential invoice discounting (75-90% due to reduced provider control over collections). Lowest typical rates are 70-80% for challenging credit profiles.
How is the UK invoice finance market evolving in 2026?
Three structural shifts in Q2 2026: (1) High street bank retreat continuing - Barclays exited factoring in 2021, Lloyds has reduced its SME book, leaving the SME segment to independents; (2) Allica Bank acquired Kriya (formerly MarketInvoice / MarketFinance) in October 2025, signalling challenger bank consolidation of fintech invoice finance; (3) Bank of England base rate at 3.75% (April 2026) means total cost of finance remains higher than 2020-22 lows but providers are competing on margin and service rather than headline rate.
What sectors use the most invoice finance in the UK?
Recruitment £8.2bn (36.1% of market) is the largest, growing. Manufacturing £5.1bn (22.5%) is stable. Transport and logistics £3.8bn (16.7%) is growing. Construction £3.2bn (14.1%) is stable. Wholesale and distribution £2.9bn (12.8%) is stable. Together these five sectors account for over 70% of all UK invoice finance lending. Source: UK Finance 2024 figures.
Is the Market Invoice market report independent?
Yes. Market Invoice is operated by Best Business Loans Ltd (company 16833937), an independent comparison site launched 2025. It is not affiliated with the historical MarketInvoice / MarketFinance / Kriya brand (now part of Allica Bank). Our 85-provider survey draws on direct provider enquiries, UK Finance, ABFA, Companies House, and FCA register data. Provider referral fees do not influence the underlying market data presented in this report.
Citation format: Market Invoice (2026). UK Invoice Finance Market Report Q2 2026: 85-provider survey. Best Business Loans Ltd. Available at: https://marketinvoice.co.uk/research/. Accessed [date].
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: 26 April 2026