Skip to navigation

Skip to main content

UK Invoice Factoring Services

Invoice Factoring Services In UK

Explanation of Invoice Factoring

Invoice Finance or Invoice factoring is a service that provides companies with a way to release cash into the business by selling the sales invoices to a third party or factoring company, while at the same time reducing the administrative burden or credit collection.  The factoring facility can be used where your business sells to other businesses and so isn't suitable for businesses that sell to the public.  The services provided by a factoring company include permitting you to draw down the money owed to the business from customer invoices.  Invoice discounting is a similar service to invoice finance but with invoice discounting a business keeps control of sales ledger management.

Invoice factoring services are provided in two different formats.  The first is recourse factoring where a company remains responsible for their customer bad debts.  So where your customers fail to pay for the services they've had your business has to repay any monies received from the factoring company.  The second is Non-Recourse factoring.  Here the bad-debt risk is taken on by the factor.  Non-recourse factoring tends to be a more expensive service as the risks to the factor are deemed higher.

UK Invoice Factoring Companies

Many invoice factoring companies are part of retail banks however many independent finance businesses provide factoring services.  Barclays Bank, HSBC, Lloyds TSB and Royal Bank Of Scotland are just a few of the banks offering factoring services in the UK. The independent factoring specialists can be both national or regional and they include companies such as Bibby Financial Services, GE Commercial Finance, and Hitachi Capital.

If your business bank provided a factoring solution that could be a good place to start however it doesn't mean that you should use their services.  The services provided by invoice factoring companies can vary significantly and many specialise in certain industry sectors or types of business.  All factoring companies have varying terms and conditions of contract.  The best way to make a decision about which factor would be best suited to your company is to make contract with a few companies to understand what they offer and to get comparative quotes etc.

Get Your Quotes Now

What Does Invoice Factoring Cost in The UK?

UK invoice factoring fees are built up using a number of different variables which may or may not include discount fees, charges for credit control and/or credit protection.  The so called discounting fee is the fees charged on the amount loaned, and is often based on a daily rate and charged monthly.  Very similar to the way a bank would charge interest on loans.  Interest rates for factoring vary between companies but can typically be 1-3% above the base rate.  Generally credit management fees vary between 1-10% and they're to cover the costs of administering your factoring account.  Credit protection costs are strongly influenced by the factoring companies view of the strength of your customer base - how financially robust your customers are i.e. likely to pay.  These fees are relevant only in non-recourse factoring arrangements..

How To Find A UK Factoring Company

The first port of call should be ABFA (Asset Based Finance Association) website.  ABFA is the recognised trade association for the industry in both UK and Ireland and their website provides full details of all their members together with advice on choosing a company.  Once you have a list of potential factoring companies you should make contact with them to discuss your requirements and to get comparative quotes.

Find Invoice Factoring Companies Now
Enter your requirements in the form below

  • Businesses %

    Consumers %

Invoice Factoring Additional Information

Invoice Factoring Companies

What Is Invoice Factoring?

Invoice Factoring Buyers Guide

Single Invoice Finance Or Spot Factoring

main image 3

Follow us now

You can follow us on the following sites

Buyers guides

We provide a selection of guides to relevant business products and services; together with tips to help you get relevant quotes and to make an informed decision.


Enter Your Login Details