For many small businesses, cash flow can be a significant challenge. Invoice factoring is a popular financial solution that allows businesses to unlock the funds tied up in their unpaid invoices. This can provide essential working capital for growth and expansion.
In this blog post, we will compare and contrast the top 36 invoice finance companies in the UK, highlighting their unique features and benefits to help you make an informed decision when choosing an invoice factoring company for your business.
So, who are the three best invoice finance providers and factoring best invoice finance companies in the UK? Let’s dive in and find out.
- This article provides a comprehensive list of the top invoice factoring companies in the UK for 2023, highlighting their key features and advantages.
- Consider factors such as customer service, fees associated with invoice factoring, and eligibility requirements when choosing an invoice factoring company.
- Invoice Factoring offers small businesses improved cash flow management, access to working capital & tailored solutions, making it an ideal financing solution for their needs.
Top UK Invoice Factoring Companies for 2023
With so many invoice finance companies in the UK, it can be difficult to determine which one is the best fit for your business.
To make your decision easier, we’ve compiled a list of the top invoice factoring companies in the UK for 2023, focusing on their key features and advantages.
These companies include Kriya (formerly Market Invoice), eCapital Factoring, Close Brothers Invoice Finance, Skipton Business Finance, Bibby Financial Services, Pulse Cashflow Finance, Hitachi Capital Invoice Finance, and Nucleus Commercial Finance.
Each of these companies offers unique benefits tailored to meet the specific needs of different businesses. For example, Kriya emphasises technology-driven solutions and flexible fees, while eCapital Factoring provides tailored solutions for businesses of all sizes.
Close Brothers Invoice Finance offers bespoke packages with competitive rates, and Skipton Business Finance provides interest-free factoring options. Nucleus Commercial. Finance stands out with its confidential services catering to businesses seeking discreet financial solutions.
To help you decide which of these invoice factoring companies is the best fit for your business, we will delve deeper into their individual features, services, and offerings in the following sections.
Kriya (formerly Market Invoice)
Kriya, formerly known as Market Invoice, is the largest invoice finance platform in Europe and a part of ABN AMRO Commercial Finance.
With a focus on technology and asset-based lending solutions, Kriya sets itself apart from other invoicing providers. Their fees are determined based on the size of your company, anticipated payment dates, and overall invoice volume.
The company has also been recognised in the Commercial Finance Brokers Awards for its excellence in the industry.
Kriya provides invoice discounting services, offering up to 90% of invoice value within 24 hours. This timely access to funds can be crucial for small businesses looking to maintain cash flow, pay expenses, or invest in growth opportunities.
In addition, the UK government has initiated a loan program for small businesses via Kriya, further solidifying its position as a leading invoice factoring provider in the country.
By offering transparent fees, a technology-driven approach, and government-backed loans, Kriya has become a popular choice for small businesses seeking flexible and accessible invoice financing solutions.
eCapital Factoring is one of the United Kingdom’s premier privately-owned factoring companies, with the directors holding over 120 years of combined experience in funding businesses.
This extensive expertise allows eCapital Factoring to provide tailored solutions for businesses of all sizes, ensuring that companies receive the financial support they need to thrive.
Some key features of eCapital Factoring include funding lines up to £2.5 million, confidential invoice discounting, credit protection against bad debt, and the ability to use finance only as and when needed. Their excellent customer service is reflected in their 5.6 out of 5-star rating on Trustpilot.
With such a strong reputation and a range of tailored solutions, eCapital Factoring is an attractive option for businesses seeking a reliable and experienced invoice factoring provider.
Close Brothers Invoice Finance
Close Brothers Invoice Finance is a financial service provider offering factoring and selective invoice finance discounting solutions. Rather than taking a one-size-fits-all approach, Close Brothers evaluates the potential and objectives of each client to create a customised and selective invoice finance company discounting invoice finance package, that best suits their needs.
One of the key benefits of working with Close Brothers Invoice Finance is their innovative IDealTM technology. This platform facilitates automatic reconciliation of invoice payments, optimising time and cost efficiency for businesses.
The minimum turnover requirement for Close Brothers’ invoice discounting facility is £500,000 annually, ensuring that their services are accessible to a wide range of businesses.
With a holistic approach to client needs, custom invoice finance packages, and innovative technology, Close Brothers Invoice Finance is an excellent choice for businesses seeking a personalised and efficient selective invoice finance factoring solution.
Skipton Business Finance
Skipton Business Finance is a premier receivables financier. It has offices in major cities across the UK, such as Skipton, Leeds, Manchester, Birmingham and Bracknell. As a wholly-owned subsidiary of Skipton Building Society, a mutual financial institution with over 150 years of service to its members, Skipton Business Finance is backed by a strong and stable parent company.
Offering a range of invoice finance solutions to UK businesses, Skipton Business Finance provides invoice factoring, invoice discounting, and their award-winning My White Label solution.
These services are designed to provide working capital, helping businesses maintain financial stability and grow. Skipton Business Finance has earned a Trustpilot rating of 4.6 out of 5 stars, reflecting their commitment to customer satisfaction.
With a diverse range of invoice factoring customers and finance solutions, a strong parent company, and a focus on customer satisfaction, Skipton Business Finance is a top choice for businesses seeking reliable invoice factoring services.
Bibby Financial Services
Bibby Financial Services is a provider of financial solutions for small and medium-sized businesses, with a longstanding history of over 200 years in the industry.
They supply customised invoice finance products and solutions to a variety of UK firms, ensuring that businesses receive the financial support they need to succeed.
One of Bibby Financial Services’ standout offerings is their Forward Finance package, specifically designed for small businesses. This package allows companies to access up to 90% of the invoice value within 24 hours, with a pre-approved funding limit of £50,000. In addition to factoring and discounting services, Bibby Financial Services also offers a solution specifically designed for recruitment agencies, allowing them to access up to 100% of invoice value.
With its extensive history, diverse range of solutions, and focus on small businesses, Bibby Financial Services is a top choice for companies seeking invoice finance options that cater to their unique needs.
Pulse Cashflow Finance
Pulse Cashflow Finance specialises in providing working capital solutions to businesses, having provided over £1 billion of cash flow support since their founding 10 years ago. Their expertise in the industry is reflected in the numerous invoice finance and receivables awards they have received.
While they may not be as well-known as some of the other invoice factoring companies on this list, Pulse Cashflow Finance’s focus on working capital solutions and industry recognition make them a strong contender for businesses seeking financial support.
With a dedication to working capital solutions and a proven track record of success, Pulse Cashflow Finance is a viable option for businesses in need of invoice factoring services.
Hitachi Capital Invoice Finance
Hitachi Capital Invoice Finance has extensive experience in supporting small and medium-sized businesses, with over 700 businesses benefiting from their services. One of their standout offerings is their Inspired Cashflow solution, which charges a fee ranging from 0.45% to 5% of the company’s annual turnover.
With a wealth of experience and a commitment to providing tailored solutions, Hitachi Capital Invoice Finance is an excellent choice for businesses in need of the best invoice finance provider factoring services. Their Inspired Cashflow solution, in particular, offers a flexible and comprehensive approach to invoice finance facility factoring, catering to the unique needs of each business.
By offering a range of solutions backed by years of experience, Hitachi Capital Invoice Finance proves to be a reliable and effective invoice factoring service provider for small businesses.
Nucleus Commercial Finance
Nucleus Commercial Finance is an alternative business funding specialist. It provides the same credit facilities as a bank, but with the added flexibility of a peer-to-peer provider.
This makes Nucleus an attractive option for businesses seeking access to finance. Catering to businesses with a turnover of between £250k and £5 million, Nucleus Commercial Finance offers flexible cash flow solutions that can be tailored to meet the specific needs of each client.
With the ability to provide up to 90% of the invoice value, Nucleus Commercial Finance ensures that businesses have access to the funds they need to maintain cash flow and support growth.
While not as well-known as some of the other companies on this list, Nucleus Commercial Finance’s focus on alternative funding solutions and flexible cash flow options make them an attractive choice for businesses seeking invoice factoring services.
With a unique approach to business funding and a commitment to providing tailored solutions, Nucleus Commercial Finance is a strong option for businesses in need of invoice factoring online account management services independent growth finance.
Factors to Consider When Choosing an Invoice Factoring Company
When choosing an invoice factoring company, there are several factors that business owners should consider to ensure they select the best provider for their needs.
One of the most important factors is customer service, as working with a company that prioritises communication and support can make the process smoother and more efficient.
Another factor to consider is the fees associated with invoice factoring. These can include service fees, discount fees, and potential additional costs such as bad debt protection or credit control services.
It’s essential to compare the fees charged by different providers to find the best value for your business.
Eligibility requirements are also an essential consideration, as different invoice factoring companies have varying criteria based on factors such as customer base, creditworthiness, and annual turnover.
By evaluating these factors and comparing the offerings of various invoice factoring companies, business owners can make an informed decision that best suits their financial needs.
Invoice Finance vs. Invoice Factoring: Understanding the Differences
While the terms invoice finance and invoice factoring are often used interchangeably, they refer to two distinct types of financing services.
Invoice finance is a more general term that encompasses both the invoice financing companies and factoring and invoice discounting.
Both of these services provide businesses with access to funds based on the value of their sales ledger unpaid and sales ledger invoices, but they differ in how the sales ledger and customer payments are managed.
With invoice factoring, the factoring company takes control of the sales ledger and is responsible for collecting customer payments.
This type of financing is not confidential, as customers are aware that the business is using a factoring company to manage their invoice payments.
On the other hand, invoice discounting allows businesses to maintain control of their sales ledger and collect customer payments themselves.
The invoice discounting provider is not disclosed to customers, making this service more of confidential invoice discounting than selective invoice discounting factoring.
Understanding the differences between various invoice finance providers and invoice factoring can help businesses determine which type of invoice financing that is best suited for their needs and ensure they select the most appropriate provider.
Costs Associated with Invoice Factoring
Invoice factoring companies typically charge two main fees: a discount fee and a service fee.
The discount fee is usually a fixed percentage that is deducted from the invoice amount, while the service fee is calculated as a percentage of the company’s annual turnover.
Invoice factoring agreements come with a service fee. Generally, this fee varies between 0.75% and 2.5% of invoice value of your total turnover.
Smaller businesses may face higher fees due to the higher risk associated with lending to smaller companies.
It’s crucial for businesses to compare the fees charged by different invoice factoring companies to ensure they are getting credit control service and the best value for their money.
Additional costs hidden fees that may be associated with invoice factoring include bad debt protection and credit control services.
These services can help protect businesses from potential financial losses and ensure efficient management of customer payments, but they may come at an additional cost.
Eligibility and Requirements for Invoice Factoring
Eligibility for invoice factoring depends on several factors, including the customer base, the creditworthiness of the customers, and the annual turnover of the business.
Most invoice factoring service providers require a minimum annual turnover of £50,000, ensuring that their services are accessible to a wide range of businesses.
Customer base and creditworthiness are important factors in determining eligibility, as businesses with a diverse and creditworthy customer base are more likely to be approved for invoice factoring.
Dependence on a single client or poor customer reliability can impact eligibility and may require businesses to explore alternative financing options.
By understanding the eligibility requirements for invoice factoring, businesses can better assess their chances of approval and ensure they are choosing the right financing solution for their needs.
The Benefits of Invoice Factoring for Small Businesses
Invoice factoring can provide numerous benefits for small businesses, particularly those in need of immediate access to working capital.
By unlocking the funds tied up in unpaid invoices, invoice factoring can help businesses maintain cash flow, pay expenses, and invest in growth opportunities.
In addition to providing access to working capital, invoice factoring can also improve cash flow management and customer relationships.
With the factoring company handling credit control and collecting customer payments, businesses can focus on their core operations and building strong customer relationships.
Invoice factoring providers may also offer confidential services and industry-specific solutions, ensuring that businesses receive tailored support that aligns with their unique needs and goals. By considering the potential benefits of invoice factoring, small businesses can make an informed decision about whether this financing solution is the right fit for their needs.
Frequently Asked Questions
How many factoring companies are there in the UK?
There are a total of 140 factoring companies operating in the UK, each serving its own target market and specialising in different sizes of invoices. As such, businesses have many options to explore when searching for a factoring partner.
Is invoice factoring regulated in the UK?
Yes, invoice factoring in the UK is regulated, albeit self-regulated by associations. The UK government has set up guidelines to ensure fair practices and protect businesses engaging in invoice factoring activities.
These guidelines include the requirement for most invoice finance providers and factoring companies to be members of the Asset Based Finance Association (ABFA) and the Invoice Finance Association (IFA). The ABFA is an acronym for ABFA.
In conclusion, invoice factoring can be a valuable financial solution for small businesses seeking immediate access to working capital and improved cash flow management.
By comparing the top invoice factoring companies in the UK, such as Kriya (formerly Market Invoice), eCapital Factoring, Close Brothers Invoice Finance, Skipton Business Finance, Bibby Financial Services, Pulse Cashflow Finance, Hitachi Capital Invoice Finance, and Nucleus Commercial Finance, businesses can find the provider that best meets their unique needs and requirements.
Factors such as customer service, fees, eligibility, and expertise should all be taken into consideration when choosing an invoice finance provider or factoring company.
By understanding the differences between invoice finance and invoice factoring, as well as the associated costs and benefits, small businesses can make an informed decision about this financing solution and unlock the growth potential of their business.