UK Invoice Finance Statistics 2026
The UK invoice finance market advanced over £22bn to businesses in 2024, supporting more than 40,000 client firms. Advances outstanding exceeded £23bn at peak, while the average debtor day for SMEs remained above 50 days. Bad debt protection claims and client numbers have both risen steadily since 2021, reflecting growing adoption across manufacturing, recruitment, and transport sectors.
Key statistics
Total UK invoice finance and asset-based lending advances in 2024. Source: UK Finance
Number of UK businesses using invoice finance and asset-based lending at end of 2024. Source: UK Finance
Peak advances outstanding on invoice finance and asset-based lending facilities in 2024. Source: UK Finance
Average payment terms experienced by UK SMEs in 2024. Source: FSB (Federation of Small Businesses)
Proportion of UK small businesses that reported being paid late in 2024. Source: FSB (Federation of Small Businesses)
Estimated value of late payments owed to UK SMEs at any one time. Source: FSB (Federation of Small Businesses)
Bank of England base rate as of March 2026, directly influencing invoice finance discount rates. Source: Bank of England
Invoice finance advances to the manufacturing sector in 2024. Source: UK Finance
Invoice finance advances to the wholesale and retail trade sector in 2024. Source: UK Finance
Invoice finance advances to the transport and logistics sector in 2024. Source: UK Finance
Invoice finance advances to the recruitment and staffing sector in 2024. Source: UK Finance
Total number of SMEs in the UK at the start of 2024. Source: Department for Business and Trade (DBT) Business Population Estimates
Proportion of all UK private sector businesses that are SMEs. Source: Department for Business and Trade (DBT) Business Population Estimates
Combined annual turnover of UK SMEs in 2023. Source: Department for Business and Trade (DBT) Business Population Estimates
Share of UK SME external finance applications that involved invoice finance in 2023. Source: British Business Bank Small Business Finance Markets Report
Value of bad debt protection claims paid out under invoice finance in 2024. Source: UK Finance
Typical maximum prepayment percentage advanced against eligible invoices by UK providers. Source: UK Finance
Number of UK businesses using confidential invoice discounting at end of 2024. Source: UK Finance
Number of UK businesses using invoice factoring at end of 2024. Source: UK Finance
Value of asset-based lending (non-invoice) included within the broader ABL market in 2024. Source: UK Finance
What the numbers mean
Invoice finance has become one of the most significant sources of working capital for UK businesses, with total advances in 2024 reaching £22.7bn across more than 40,000 client firms. The market divides broadly into two products: confidential invoice discounting, where the business retains control of its sales ledger, and invoice factoring, where the finance provider manages collections. Discounting accounts for the larger share of clients and advances, reflecting its appeal to more established firms with stronger internal credit control.
The sectors driving the most demand are manufacturing, wholesale and retail trade, transport and logistics, and recruitment. These industries share a common characteristic: they raise invoices well in advance of receiving payment, creating cash flow gaps that invoice finance is designed to bridge. The FSB has consistently found that late payment remains a serious problem, with around half of small businesses reporting they were paid late in 2024 and average payment terms stretching beyond 50 days.
The Bank of England base rate stood at 3.75% in March 2026, meaning the cost of invoice finance remains higher than in the near-zero rate era of 2020 to 2022, but providers have competed on margin and service. Bad debt protection, sometimes called credit insurance, is now embedded in many factoring facilities, and the £480m paid in claims during 2024 illustrates that it provides genuine value.
With 5.6 million SMEs collectively turning over £2.4tn, the penetration of invoice finance remains relatively low. Industry bodies and the British Business Bank continue to highlight awareness and perceived complexity as barriers to adoption, suggesting significant headroom for market growth.
FAQs
How large is the UK invoice finance market in 2026?
Based on the most recent full-year data published by UK Finance, total advances reached £22.7bn in 2024. The market has grown steadily since 2021. Updated 2025 full-year figures are expected from UK Finance in mid-2026 and this page will be revised when they are published.
How many UK businesses use invoice finance?
UK Finance reported that approximately 40,100 businesses were using invoice finance or asset-based lending at the end of 2024. Of these, around 30,200 used confidential invoice discounting and approximately 9,900 used invoice factoring.
Which sectors use invoice finance the most in the UK?
Manufacturing receives the largest share of invoice finance advances, followed by wholesale and retail trade, transport and logistics, and recruitment. These sectors typically operate on extended payment terms and have high volumes of trade receivables, making them well suited to invoice finance facilities.
What is the typical advance rate on a UK invoice finance facility?
Most UK invoice finance providers advance between 80% and 90% of the face value of eligible invoices, with 85% being a commonly cited benchmark. The remaining balance, minus fees and charges, is released once the debtor pays. The exact rate depends on the quality and diversity of the debtor book.
Is invoice finance regulated in the UK?
Invoice finance provided to limited companies and partnerships is not regulated by the Financial Conduct Authority (FCA) in the same way as consumer credit. However, providers operating in the UK are subject to general commercial law, anti-money laundering regulations, and industry codes of practice overseen by UK Finance. Sole trader facilities may attract different regulatory treatment depending on the structure of the agreement.
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: 24 April 2026