Invoice finance and factoring in the UK

Invoice finance pays you up to 90% of an unpaid business invoice now, and the provider takes a service fee plus a daily discount charge until your customer pays. On £50,000 of invoices that is £45,000 in your account within a day or so, at a cost the big providers will not publish; the one UK provider that does, Triver, would charge £891.00 for 30 days.

Figures checked 1 November 2026 on each provider's own site.

What invoice finance is, and the two ways it is sold

You raise an invoice to a business customer on 30 or 60 day terms. Instead of waiting, a finance provider advances most of its value against it. The British Business Bank describes the cost as a fee plus a discount charge, which works like interest, and says the product is usually only for established businesses that sell to other businesses. It is a large market: UK Finance members held £21.2 billion of advances at the end of 2024, against £313 billion of client sales that year.

Invoice factoring (debt factoring) means the provider runs your sales ledger and chases your customers, so they know you use it. Invoice discounting leaves collections with you and is usually confidential; see our invoice discounting guide. Both can cover your whole ledger. Selective invoice finance funds single invoices you choose, which is how Triver and Penny work.

Recourse and non-recourse factoring

Recourse factoring is the default: you remain responsible for invoices your customer does not pay. If a customer never pays, the provider takes the advance back from you. Non-recourse factoring includes bad debt protection if a customer fails to pay because of insolvency. Read the cover carefully: insolvency is covered, a customer refusing to pay over a dispute normally is not, and you should expect to pay for the protection. If your customers are large, creditworthy firms, recourse is usually the better buy.

Invoice finance cost: the fees you will be quoted

Charge	What it is (Bibby glossary)
Service fee	Percentage charged for managing the facility
Discount charge	Charge for using the money advanced, similar to overdraft interest
Minimum fee	Minimum charge as a percentage of invoices assigned over an agreed period
Disbursements	Extra charge for services outside standard fees, such as same-day payments or legal letters
Notice period	Usually up to 3 months

The minimum fee is the one that catches people out: if you sign a 12 month facility and then finance less than you expected, you still pay the minimum. Ask whether the discount charge is a margin over Bank of England Bank Rate, currently 3.75% (held on 17 September 2026); if it is, your cost moves every time the rate does.

Worked example: £50,000 of invoices

A supplier invoices £50,000 on 30 day terms. Say the customer pays on day 45, a fortnight late.

Selective, at Triver's published rate

Advance: £50,000 × 99% = £49,500
If paid on day 30: £49,500 × 0.06% × 30 days = £891.00
If paid on day 45: £49,500 × 0.06% × 45 days = £1,336.50
Minimum taken upfront (10 days of fees upfront, minimum £18): £297.00

Triver labels the calculator rate illustrative; your rate may differ. Limits: Facility up to £1 million; up to £100,000 per advance; invoices £100 to £100,000; invoices on 10 to 120 day terms.

Whole-ledger factoring at a 90% advance

Advance: £50,000 × 90% = £45,000; the other £5,000 comes when your customer pays, less fees
Service fee: not published; every 0.1% of fee on £50,000 costs £50.00
Discount charge, Bank Rate part: £45,000 × 3.75% × 45/365 = £208.05
Each 1 point of margin over Bank Rate: £45,000 × 1% × 45/365 = £55.48

The 90% advance is the published maximum from NatWest, Close Brothers and the British Business Bank. Bibby now says up to 95%. None publishes its service fee or margin, so ask for both in writing and add them to the lines above.

The comparison that matters: Triver's selective pricing is about 1.8% a month on the money drawn, with no contract. A whole-ledger facility may carry a lower discount rate, but it adds a service fee on every invoice, a minimum fee and a notice period. If you only need cash for one or two big invoices a year, the selective route will usually cost less overall even at a higher rate.

Advantages and disadvantages of debt factoring

For: cash arrives as you invoice rather than 45 days later, the facility grows with your sales, and a factor's credit control team can collect faster than a two-person office. Against: your customers deal with a third party, you pay on every invoice for as long as the contract runs, and a bad debt on a recourse facility comes straight back to you. Slow payers also limit what you can borrow; the British Business Bank says that customers taking more than 90 days to pay may mean a decline.

Invoice factoring companies in the UK

Provider	Advance	Minimum turnover	Fees
NatWest (FacFlow)	Up to 90% within 24 hours	£300,000 a year (discounting)	Not published
Close Brothers	Up to 90%	£750,000 a year	Not published
Bibby Financial Services	Up to 95% of invoice value	Not published	Not published
Triver (selective)	Typically 99% upfront	Not published	From 0.06% a day on the amount advanced (about 1.8% on a 30-day invoice)
Penny (selective)	Buys 100% of the invoice	Not published	Not published

The full breakdown, including contracts and FacFlow, is in our invoice finance providers comparison and the Bibby Financial Services review. Recruitment agencies: Bibby also sells a dedicated recruitment finance product.

Invoice finance or a merchant cash advance?

If you sell to consumers and get paid by card, invoice finance does not apply to you at all. A merchant cash advance is the card-takings equivalent, priced as a fixed fee and repaid as a share of each day's sales. Businesses with both trade invoices and card takings can compare the two in our invoice finance vs merchant cash advance guide, or price an advance with the MCA cost calculator.

Paid by card rather than invoice?

Tell us your monthly card takings and we will show what an advance would cost, with the fee in pounds. Free, no obligation.

Already taking cards? Check you are not overpaying on processing first with a free statement review, or browse all business funding options.

Invoice finance questions

How much does invoice finance cost?

Two charges: a service fee for running the facility and a discount charge on the money you draw, which works like overdraft interest. Only one UK provider we checked publishes a rate: Triver charges from 0.06% a day on the amount advanced, so £49,500 advanced against a £50,000 invoice for 30 days costs £891.00. NatWest, Close Brothers and Bibby price each facility individually and publish no rates.

What is the difference between recourse and non-recourse factoring?

With recourse factoring you stay responsible for any invoice your customer fails to pay, so the provider can claw back the advance. Non-recourse factoring adds bad debt protection if a customer fails to pay because it becomes insolvent (Bibby's own glossary definition). Expect to pay for that protection, and note it covers insolvency, not a customer who disputes the work.

What is debt factoring?

Debt factoring is the older name for invoice factoring: you sell your unpaid invoices to a factoring company, it pays you up to 90% straight away, chases your customers for payment, then pays you the balance less its fees once they settle.

Can a small business use invoice factoring?

Yes, but the big bank facilities set turnover floors: NatWest asks for £300,000 a year for invoice discounting and Close Brothers £750,000 a year for both products. Below that, selective invoice finance such as Triver or Penny funds one invoice at a time with no long contract.

Is invoice finance regulated by the FCA?

Not as a product, as far as the FCA publishes. Factoring firms that are not already FSMA-authorised must register with the FCA for anti-money-laundering supervision, which is not the same as regulating the finance. We found no FCA statement that business invoice finance is a regulated activity, so do not assume Financial Ombudsman cover; ask the provider. UK Finance members also follow an industry Standards Framework.

Can I use invoice finance if my customers pay by card?

No. Invoice finance needs business-to-business invoices on credit terms. A shop, café or salon paid at the till has no invoices to finance; the equivalent product is a merchant cash advance repaid from card takings.

Sources

Every figure on this page comes from the provider's own website or terms, or a named primary source, read on 1 November 2026. Where a provider does not publish a term we say "Not published" rather than fill the gap from a comparison site.