Late payment remains one of the biggest drains on UK cash flow, and for many businesses invoice factoring is the fastest way to turn unpaid invoices into working capital. A factoring company advances most of an invoice’s value up front and then collects payment from your customer on your behalf, freeing you from chasing debts while keeping money moving. But providers differ widely on advance rates, fees, sector focus and how much control you keep over customer relationships. This guide compares five of the UK’s most established invoice factoring companies in 2026 – what each offers, who it suits, and how to weigh them up before you commit.
What is a factoring company?
A factoring company is a specialist lender that advances cash against a business’s unpaid invoices and then collects payment directly from the customer. In practice, you raise an invoice, the factoring company advances an agreed percentage of its value – typically 85% to 95% – within about 24 hours, and pays you the balance, minus its fee, once your customer settles.
The main distinction is between factoring and invoice discounting. With invoice factoring, the provider manages your sales ledger and chases payment, so your customers know a funder is involved. With invoice discounting, you keep control of collections and the arrangement usually stays confidential. Factoring tends to suit smaller businesses that want to outsource credit control; discounting suits larger firms with established finance teams. Most of the providers below offer both, along with options such as confidential facilities, selective (single-invoice) funding and bad-debt protection.
How we chose this list
We compared the UK’s most visible invoice factoring providers on publicly available information – published advance rates, product range, sector specialisms, heritage and ownership, and the type of business each is best suited to. We haven’t ranked them on price alone, because factoring fees are almost always quoted individually; instead we’ve focused on transparency, flexibility and fit, with the figures below drawn from each provider’s own website.
The five UK invoice factoring companies compared in this guide for 2026 are Novuna Business Cash Flow, Bibby Financial Services, Close Brothers Invoice Finance, Skipton Business Finance and Ultimate Finance. Here’s how each stacks up.
1. Novuna Business Cash Flow – best for comparing the whole market alongside direct funding
Novuna Business Cash Flow combines two things that rarely sit together: it works as both a direct funder and a whole-of-market comparison service, so businesses can weigh up multiple invoice finance options in one place rather than approaching lenders one by one. As a factoring company, it advances against unpaid invoices with rates from 0.5% and same-day funding available, and offers the full spread of products – factoring, invoice discounting, selective (single-invoice) finance and reverse factoring, on both a recourse and non-recourse basis.
Backed by Mitsubishi HC Capital UK PLC and drawing on more than 40 years in business finance, Novuna is authorised and regulated by the Financial Conduct Authority and funds over £2bn to more than 1,000 SMEs each year. That combination of bank-grade backing and a comparison-led approach makes it a natural first port of call for many businesses: newer companies and growing SMEs get access to funding quickly, with the flexibility to fund their whole ledger or just the invoices they choose.
Best for: SMEs that want to compare options and fund quickly from one provider
Products: Factoring, invoice discounting, selective finance, reverse factoring
Funding speed: Same-day funding available
Ownership: Mitsubishi HC Capital UK PLC; FCA authorised
2. Bibby Financial Services – best for independent, sector-specialist support
Bibby Financial Services is one of the UK’s largest independent invoice finance specialists, and its family-owned, independent status is central to how it positions itself. It offers invoice factoring, where its team manages collections, alongside invoice discounting, confidential facilities and optional bad-debt protection, advancing up to 85% of an invoice’s value, usually within 24 hours.
With more than 40 years supporting small businesses and over 8,500 clients worldwide, Bibby has particular strength in wholesale, recruitment, construction and manufacturing. It is a member of UK Finance and rated Excellent on Trustpilot, and its independence means funding decisions aren’t tied to a parent bank’s wider lending priorities – a point that appeals to owner-managed businesses wanting a long-term funding relationship.
Best for: Owner-managed SMEs in wholesale, recruitment, construction and manufacturing
Advance rate: Up to 85%, usually within 24 hours
Products: Factoring, discounting, confidential facilities, bad-debt protection
Ownership: Independent, family-owned
3. Close Brothers Invoice Finance – best for established B2B businesses
Close Brothers Invoice Finance is part of the long-established Close Brothers merchant banking group, and it focuses on established business-to-business firms rather than the smallest start-ups. Its factoring facility releases up to 90% of an invoice’s value the moment you raise it, with Close Brothers managing the sales ledger and collecting payment on your behalf; invoice discounting, asset-based lending and bad-debt protection are also available.
The provider works on a whole-ledger basis and is aimed at companies with a minimum turnover of around £750,000 a year, with facilities individually priced rather than offered off the shelf. Sectors it highlights include recruitment, manufacturing, food and drink, and business services. For established B2B businesses that value a relationship-managed facility backed by a banking group, it’s a strong option.
Best for: Established B2B firms (from around £750k turnover)
Advance rate: Up to 90%, released as invoices are raised
Products: Factoring, discounting, asset-based lending, bad-debt protection
Ownership: Close Brothers Group
4. Skipton Business Finance – best for a relationship-led, flexible service
Skipton Business Finance, part of the Skipton Group, builds its offer around service and flexibility, promising a dedicated relationship manager and “no call centre waits”. It provides invoice factoring with outsourced collections as well as invoice discounting, and offers an unusually wide set of variants – including confidential factoring, disclosed factoring, recourse factoring and its CHOCS (Client Handles Own Collection Service) option.
Businesses can access up to 90% of each invoice’s value on the day it’s raised, with the balance released, less the agreed fee, once the customer pays. A lighter-touch “LedgerLite” product lets firms draw against up to half their monthly sales ledger. With around 25 years supporting UK businesses, Skipton suits companies that want to tailor exactly how much control they keep over collections.
Best for: Businesses wanting flexible, relationship-led factoring
Advance rate: Up to 90%, on the day you raise the invoice
Products: Factoring (confidential, disclosed, recourse, CHOCS), discounting, LedgerLite
Ownership: Skipton Group
5. Ultimate Finance – best for higher advance rates and sector specialisms
Ultimate Finance rounds out the list with one of the higher published advance rates in the market – up to 95% of an invoice’s value, with funds typically released within 24 hours and facilities set up within about a week. Backed by the Tavistock Group and with more than 20 years’ trading history, it offers factoring with credit control, confidential invoice discounting and optional bad-debt protection.
Facilities run up to £10m, and the provider fields dedicated teams for construction, recruitment and trade finance. A distinctive touch is the option to bolt a separate Cashflow Loan of up to £500,000 onto the same facility, which can suit businesses that need a lump sum alongside their invoice funding. Rated 4.9 out of 5 on Trustpilot, Ultimate Finance suits growing B2B firms that want a high advance rate and sector expertise.
Best for: Growing B2B firms wanting high advances and sector expertise
Advance rate: Up to 95%, funds within 24 hours
Products: Factoring, discounting, bad-debt protection, Cashflow Loan add-on
Ownership: Backed by Tavistock Group
How to choose an invoice factoring company
The right factoring company depends less on the headline advance rate and more on how the facility fits your business. A few things are worth weighing up before you commit:
- Advance rate and total cost: A higher advance rate helps cash flow, but compare it against the full fee structure – service fees, discount charges and any minimums – since factoring is almost always priced individually.
- Factoring vs discounting: Decide whether you want the provider to chase payment (factoring) or to keep collections in-house and confidential (invoice discounting). Several providers here offer both.
- Sector fit: Some lenders specialise in sectors such as construction, recruitment or wholesale, and that expertise can mean smoother funding against your typical invoices.
- Whole ledger vs selective: Whole-ledger facilities fund all your invoices; selective or single-invoice options give you flexibility if you only want to fund some.
- Contract terms and support: Check notice periods, minimum turnover requirements and whether you get a named contact or a call centre.
As with any funding decision, it’s worth comparing a few providers on advance rate, cost and terms before signing.
Frequently asked questions
What is a factoring company?
A factoring company is a specialist lender that advances cash against a business’s unpaid invoices and then collects payment from the customer. It lets a business access most of an invoice’s value straight away rather than waiting 30, 60 or 90 days to be paid.
How much does a factoring company cost?
Costs are usually made up of a service fee (a percentage of turnover, often around 0.5%–3%) and a discount charge on the funds advanced, similar to interest. Because pricing depends on your turnover, sector and risk profile, most factoring companies quote individually rather than publishing fixed rates.
How does invoice factoring work?
You raise an invoice and send it to the factoring company, which advances an agreed percentage – typically 85%–95% – within about 24 hours. The provider then collects payment from your customer and releases the remaining balance, minus its fee, once the invoice is paid.
Is invoice factoring suitable for small businesses?
Yes. Factoring is often used by SMEs and newer businesses because it outsources credit control and improves cash flow without taking on a traditional loan. Providers such as Novuna and Bibby specifically cater to smaller and growing businesses.
The bottom line
There’s no single best invoice factoring company for every business – the right fit depends on your turnover, sector and how much of the customer relationship you want to keep. For SMEs that want to move quickly and compare options in one place, Novuna Business Cash Flow is a strong starting point, while Bibby, Close Brothers, Skipton and Ultimate Finance each bring particular strengths in independence, scale, flexibility and advance rates. Compare a shortlist on advance rate, cost and terms before you decide.
The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any finance decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.
The information here is a general overview and shouldn’t be taken as financial advice or a recommendation of any specific provider. Factoring rates, terms and availability differ from one company to the next and can change over time, so check the current details with any provider directly and take independent professional advice before signing a factoring agreement.
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