If your business sells to commercial customers, and thinking about Invoice Finance, you may want to know who are the Top UK Factoring companies and how you may be able to benefit from a process known as invoice factoring.
This is where a company sells its invoices to a third party namely a factor, they then give you the money up front and then chases payment on your behalf.
This works because the money owed is a business asset so we are here to let you know more about the top UK invoice factoring companies UK. The two types of factoring companies to choose from are: main high street banks offer business factoring services (although you do not have to choose the same bank that handles your other financing needs) or go for a specialised independent factoring company instead.
Invoice Funding are one of the leading Invoice Factoring Companies in the UK. It’s worth noting that invoice factoring is not regulated by the Financial Conduct Authority (FCA) in the UK, so if you are a borrower you should research providers carefully. To help you understand the funding options that are available, we’ll explain and provide a rundown of the best invoice factoring options on the market.
Best Invoice Financing Companies
Banks have strongly promoted the loan facilities, known as Invoice factoring, Invoice funding and invoice discounting, to small UK companies in recent months. Total advances at the end of last year stood at £14bn, but many see the loans as prohibitively expensive. Typically, banks advance 80 per cent of the value of each sales invoice when issued by a client, paying the balance , less a fee. When the trade debtor settles up days or months later. In factoring, banks chase up debts, this is a job they leave to the borrower in invoice discounting schemes.
Banks are promoting invoice finance aggressively in a bid to improve their security and to raise margins in the wake of the credit crunch, Mr Carty said. Banks often used the loans as a means of whittling down customers’ overdrafts: “If customers decline to switch, it can be a case of like it or lump it,” he said.
Skip forward to 2021 most invoice factoring lenders now are now ruled by a code of conduct. The banks have given way to smaller lenders that are flexible in their view to lend. This has been a great relief to UK Business.
Invoice financing is not regulated by the Financial Conduct Authority (FCA) in the UK. If you are looking to use the services of invoice factoring companies you should carryout your own research.
To help you understand invoice finance providers, we’ll provide a rundown of the best invoice factoring options on the market for 2021.
List of Factoring Companies
- Lloyds Commercial – factoring service is available to any company with an annual turnover of at least £50,000 and is especially suitable for start-ups or growing businesses. They offer a 6-month, no-obligation trial.
- RBS Fac Flow– were named the Invoice Finance Bank of the Year in a 2012 poll and are one of the UK’s largest and most trusted invoice finance companies, offering a beneficial link between invoice finance and business banking.
- Barclays Invoice Finance – usually focus their invoicing services on companies with credit sales of at least £100,000 a year and work with a wide range of enterprises such as printers, distributors, transport firms and recruitment agencies.
- HSBC Invoice Finance – offer services to medium and large businesses (usually with a projected turnover of £250,000) and provide attractive packages that include credit protection, international factoring, online account management and no hidden charges.
- Skipton Business Finance are part of Skipton Building Society Group family – recently voted in the top 100 companies to work for by The Times and their funding lines start from as little as £25k and currently go up to £5m.
- Aldermore Finance – founded in 2009, Aldermore is a modern, legacy-free bank which challenges the established view of what banking should be. They deliver award-winning finance solutions to Britain’s small and medium-sized enterprises
- Close Brothers Invoice Finance – Close Brothers Invoice Finance is part of Close Brothers Group plc, a leading UK merchant banking group.
- Paragon Invoice Finance – Paragon Bank PLC, we are proud to be a specialist lender and savings bank offering a range of products and services in the UK.
- Siemens Invoice Finance – Part of the A+ rated* worldwide Siemens Group, Siemens Financial Services has a long and proud history of assisting businesses grow through leveraging innovative financial products.
Leading Finance Companies in the UK
- Metro Bank SME Finance is a specialist invoice finance company, focused on helping small businesses. Their flexible packages are designed with the customer firmly in the driving seat and they pride themselves on customer service and independent advice have been purchased by metro bank.
- Bibby Financial Services are the UK’s largest independent factoring company. For an 85% return on the cash tied up in outstanding services, Bibby offer debt chasing, credit control and sales ledger management, which can be kept completely confidential (confidential invoice discounting). They offer help with overseas debt (international factoring) as well as bespoke packages for all industries.
- Hitachi Capital provides award-winning invoice factoring and discounting to small and medium sized UK businesses. They offer easy to understand cash flow solutions, with good customer support, trial periods, price promises and a focus on friendly service.
- Factor 21 The established, independent invoice finance company Factor 21 has changed its name to Advantedge Commercial Finance, with effect from 22nd January 2018. The name appears an interesting combination of the words “advantage” and “edge”.
- MarketInvoice is an online platform that brings a combination of auction and crowdfunding to the invoice financing sector. The site is a 24-hour facilitator, enabling companies to sell their invoices to the highest bidder at any time of the day.
- Ashley Business Finance Founded in 1993, Ashley Business Finance has grown quickly it focuses on small business. The holding company for them is Ultimate Finance Group plc which is itself a factoring company.
- Peak Cashflow was established in 2007 by Jim Small and Peter Stanton, they are fully independent, meaning we are not owned or operated by any major bank or financial institution.
- Calverton Finance has been trading over 20 years, supports the recruitment industry with their back office offering.
- Team Factors are fully independent, meaning we are not owned or operated by any major bank or financial institution.
- Satago Business Finance offers a technically advanced invoice finance system via its platform, which is designed to help businesses manage their cashflow.
- IGF Invoice Finance is an independent UK commercial finance provider, that has been operating in the Invoice Finance and Asset-Based Lending sector for the past 20 years.
- Sonovate Invoice Finance are a recruitment timesheet finance company based in Cardiff Wales, with an office in London, the businesses started with a team of 12, Sonovate has grown to a staff of over 100.
- Working Capital Partners specialist in single invoice funding, they are dedicated to helping small businesses optimise their existing cash flow rather than just taking on debt.
- Catalyst Finance are one of the UK’s leading providers of finance for SMEs, with a complete understand what running a business is all about. This is why they aim to make the whole process as easy as possible for you.
- Reward Finance have a flexible approach to helping businesses who are in need of finance, they look at your individual situation. No box-ticking. Just a common-sense understanding of your ambitions, and a willingness to help you achieve them.
Choosing The Top Invoice Factoring Company
Before choosing an invoice factoring company, there’s an awful lot to consider and it’s crucial that you do your homework to ensure that invoice factoring is the top solution for your business requirements.
There are a number of different factors to consider, including their fees, relevant experience in dealing with your industry, value-added services, and integrity.
At the same time, you should also take this opportunity to check any relevant penalty information. For example, the vast majority of factoring companies require their clients to sign long-term contracts, which often have a bespoke set of criteria that all clients must abide by. This is super important as failure to abide to this criteria could result in serious penalties.
Compare Factoring Companies Today
The information on this page should help you to understand what invoice factoring companies can offer to you; to find out more though, you should speak to a professional Invoice Factoring broker, like ourselves.
To compare invoice factoring quotes from the top UK suppliers. We can use your details and specifications to match you to the best possible factor. This process is free, quick and easy, and could save your business both time and money.
Should you need any more information on the top UK Factoring Companies please complete our online enquiry form. The process is quick and simple, once we have received your enquiry, a funding specialist will contact you.