Late payment is one of the most persistent pressures a small business faces. When a customer takes 30, 60 or even 90 days to settle, the money you have already earned sits locked up in an unpaid invoice – and the bills, wages and supplier payments don’t wait. Invoice finance solves that timing problem by releasing the cash tied up in your sales ledger, so you can draw on the value of an invoice within days of issuing it rather than waiting months to be paid.
Until fairly recently this was mostly the domain of larger, mid-market companies. That has changed. A growing number of providers now actively support businesses turning over well under £1 million a year, each with its own product mix, fee model and appetite for smaller accounts. Below we compare five invoice finance options worth considering for smaller businesses in 2026, then set out how to weigh them up.
How we compiled this list: we focused on providers that genuinely serve smaller ledgers – looking at minimum-turnover flexibility, the range of products on offer (factoring, discounting and selective finance), funding speed, sector expertise and the backing behind each business.
At a glance: the five providers compared
| Provider | Backing | Key products | Best suited to |
|---|---|---|---|
| Novuna Business Cash Flow | Mitsubishi HC Capital UK PLC | Factoring, discounting, selective invoice finance | SMEs wanting flexibility and a single provider for wider finance needs |
| Bibby Financial Services | Bibby Line Group (family-owned, est. 1807) | Factoring, discounting, confidential factoring | Sector-specific businesses wanting outsourced credit control |
| Kriya (formerly MarketFinance) | Allica Bank | Selective invoice finance, confidential discounting | Digital-first firms funding individual invoices |
| Skipton Business Finance | Skipton Building Society (mutual, est. 1853) | Factoring, discounting, Skipton Select, LedgerLite | Businesses wanting predictable, transparent fees |
| Close Brothers Invoice Finance | Close Brothers Group (FTSE 250) | Factoring, discounting, ABL, bad debt protection | Growing SMEs and start-ups needing specialist support |
1. Novuna Business Cash Flow
Novuna Business Cash Flow sits within Mitsubishi HC Capital UK PLC, one of the UK’s largest leasing and finance groups. That parentage gives it real financial depth and the scope to support businesses across a wide range of sizes and sectors – useful reassurance for a smaller business that wants the backing of a substantial group behind its facility.
For small businesses in particular, the appeal is flexibility. Novuna offers factoring, invoice discounting for small businesses and selective invoice finance – the last of which lets you fund individual invoices rather than committing your entire debtor book. That matters if your invoicing is irregular or seasonal, or if you simply don’t want to tie up your whole ledger. Its wider invoice finance for small business proposition is built around exactly this kind of dip-in, dip-out flexibility rather than a one-size whole-turnover arrangement.
The business supports sectors including manufacturing, logistics, professional services and recruitment, and its credit control team can handle debtor management for factoring clients that prefer to outsource it. Because Novuna also runs a business loans and asset finance arm, a small business with several financing needs can keep them under one relationship.
Best for:
- Established small businesses wanting a relationship-led facility backed by a major finance group
- Companies that prefer selective invoice finance over a whole-ledger commitment
- Businesses that may also need asset finance or a business loan from the same provider
- Manufacturing, logistics, recruitment and professional services firms
2. Bibby Financial Services
Bibby Financial Services is part of the Bibby Line Group, a family-owned business that traces its roots to 1807. Bibby Financial Services itself launched in 1982, giving it more than 40 years of specialist SME lending behind it, and it is now the UK’s largest independent invoice finance provider.
Its strength for smaller businesses lies in sector depth. Bibby runs dedicated teams for transport and logistics, recruitment, construction and professional services – areas where invoice cycles and debtor behaviour differ markedly from general trading. Its construction finance capability is especially strong, having been reinforced by the 2023 acquisition of Aldermore’s Working Capital Finance division. That specialism shapes both its underwriting and the day-to-day support clients receive.
Bibby provides factoring and invoice discounting, including a confidential factoring option for businesses that want full credit control support without their customers knowing a third party is involved – helpful for a small finance team with limited capacity. Facilities are run through a network of regional offices, with advance rates of up to 85% of invoice value typically available within 24 hours of setup. Pricing is agreed directly, based on turnover, sector and debtor profile, rather than published as a standard rate.
Best for:
- Small businesses in transport, logistics, recruitment, construction or professional services
- Companies wanting to outsource credit control, including via confidential factoring
- Those that value a regional, relationship-managed service with a long track record
- Businesses needing genuine construction finance expertise
3. Kriya (formerly MarketFinance)
Kriya rebranded from MarketFinance in 2022 and, since October 2025, has operated as part of Allica Bank. Kriya says the deal gives it greater funding capacity and a lower cost of capital, and the two businesses have set out a shared ambition to deploy £1 billion in working capital finance over three years.
Flexibility sits at the heart of Kriya’s offer, which suits small businesses that need occasional rather than continuous support. Its selective invoice finance product lets you upload individual invoices for funding instead of committing to a whole-ledger facility. To qualify, a business needs to be a UK-registered limited company or LLP with a minimum annual turnover of £100,000. Confidential invoice discounting – where Kriya’s involvement stays hidden from customers – requires higher turnover and integration with supported accounting software (Xero, QuickBooks or Sage).
Onboarding is largely digital, which works well for businesses that need funds quickly: Kriya can advance up to 90% of invoice value, typically within 24 hours of verifying an invoice. One point to weigh is that its selective model places more emphasis on the creditworthiness of each individual invoice, so businesses with a mixed debtor book may see more variable approval.
Best for:
- Businesses with £100,000+ turnover that want to fund individual invoices rather than the whole ledger
- Companies on Xero, QuickBooks or Sage wanting a fully integrated, digital-first process
- Those needing fast access to funds, usually within 24 hours of verification
- Limited companies and LLPs after a pay-as-you-go facility with no long-term tie-in
4. Skipton Business Finance
Skipton Business Finance is part of the Skipton Group, backed by Skipton Building Society – one of the UK’s largest mutuals, founded in 1853. As a mutual-backed provider it operates without external shareholder pressure, with a stated focus on long-term relationships and dedicated account management. It has been running for close to 25 years and reported record profit and lending growth in 2025.
Its range covers factoring and confidential invoice discounting, plus two products with unusually clear fee structures that small businesses tend to appreciate. Skipton Select is an interest-free factoring facility where the entire cost is a flat service charge – between 2% and 3.5% of factored turnover – with no separate discount rate on the funds you draw. For a business that wants a predictable, easy-to-budget cost rather than one that moves with drawdown timing and base rates, that’s worth comparing against a standard facility. LedgerLite, the second option, provides access to up to 50% of a monthly sales ledger with a simpler structure, making it a gentler entry point into invoice finance.
Skipton Business Finance works through five UK offices, assigns every client a dedicated relationship manager, and reports a 98% client satisfaction rate in its most recent survey.
Best for:
- Small businesses wanting a transparent, predictable fee with no daily interest (Skipton Select)
- Those not ready for a full factoring commitment who want structured access to working capital (LedgerLite)
- Businesses that value a dedicated relationship manager and regional service
- Companies that prefer mutual backing and a long-established, independent provider
5. Close Brothers Invoice Finance
Close Brothers Invoice Finance is part of Close Brothers Group, a FTSE 250-listed merchant banking group founded in 1878. It runs as a dedicated invoice finance specialist with a relationship-led approach, supporting businesses from early stage right up to £1 billion-plus in revenue.
Its core range spans invoice factoring, confidential invoice discounting, asset-based lending and bad debt protection. The IDeal platform lets the cash value of a new invoice reach a client’s bank account the moment that invoice is raised, while bad debt protection can be added to cover up to 100% of what’s owed should a customer default – a meaningful safeguard for a small business that can’t easily absorb a bad debt.
Crucially for smaller firms, Close Brothers launched a dedicated Scale Up team in August 2025 aimed at start-ups and smaller SMEs that previously fell below the threshold for its core commercial team. That team handles facilities up to £350,000, while the main commercial team covers £350,000 to £3 million and larger syndicated deals are managed separately. The provider has particular depth in manufacturing, transport and recruitment, where it has supported businesses through acquisitions, buy-outs and rapid growth.
Best for:
- Growing businesses wanting a specialist backed by a FTSE 250 merchant banking group
- Start-ups and smaller SMEs needing facilities up to £350,000 via the Scale Up team
- Manufacturing, transport or recruitment businesses wanting sector-specific expertise
- Those that want bad debt protection alongside their facility
What to look for in an invoice finance provider
With the providers in mind, it helps to understand the variables that decide whether a facility actually fits a small business.
Minimum turnover requirements. Some providers won’t consider businesses below a set annual revenue level. For a smaller business, this alone can rule options in or out before anything else.
Funding percentage. Most providers advance between 80% and 90% of an invoice upfront, releasing the balance (less fees) once your customer pays. The exact figure can shift with your sector and the creditworthiness of your customers.
Confidentiality options. Invoice discounting is the confidential route – your customers never know the invoices have been financed. Factoring usually means the provider manages credit control, so customers are aware a third party is involved. Many smaller businesses lean towards discounting to protect customer relationships.
Fee structure. Expect a service fee (a percentage of turnover or invoice value) plus an interest charge on the funds you draw. Your total cost depends on how much of the line you use, and for how long.
Sector experience. Providers with real expertise in your industry – construction, recruitment and professional services all behave differently – tend to underwrite more confidently and offer keener terms.
Key questions to ask any provider
Before committing to a facility, a small business should put the following to any provider:
- What is the minimum annual turnover? Some providers won’t take on facilities below £100,000–£250,000 in annual invoicing.
- Is the facility whole-ledger or selective? Whole-ledger arrangements require every invoice to be financed; selective facilities let you fund individual invoices.
- What is the total cost? Ask for a worked example using your average invoice value, typical payment terms and expected usage – not just the headline rate.
- Who manages credit control? Under factoring the provider contacts your customers; under discounting you keep control. Make sure it fits your customer relationships.
- What are the exit terms? Some facilities carry minimum notice periods or early termination charges. Understanding these upfront protects you if your needs change.
Frequently asked questions
What is invoice finance, and how does it work for a small business? Invoice finance is a way for a small business to unlock the cash tied up in unpaid invoices. Instead of waiting for a customer to pay, the provider advances a large share of the invoice value – usually 80–90% – within a day or two, then releases the remainder, minus fees, once the customer settles.
How quickly can a small business access funds? Once a facility is set up, many providers release funds within 24 hours of an invoice being raised or verified. The initial setup itself can take longer, depending on the checks involved and how quickly you can supply your ledger and company information.
Is invoice finance a type of loan? Not in the conventional sense. Rather than borrowing a fixed sum against your assets, you’re advancing money you’re already owed, secured against your outstanding invoices. The amount available rises and falls with your sales ledger, so funding scales naturally as your business grows.
Can a small business with limited credit history use invoice finance? Often, yes. Because the facility is underwritten largely against the creditworthiness of your customers rather than your own trading history, invoice finance can suit younger businesses and start-ups that might struggle to secure a traditional loan – particularly through providers with a dedicated start-up or scale-up offering.
Conclusion
Invoice finance is a well-established, practical tool for any small business managing cash flow against drawn-out payment terms. The five providers above span a broad spectrum – from the UK’s largest independent specialist and a FTSE 250 merchant bank, to a bank-backed digital platform funding individual invoices, to a mutual with distinctive, transparent fee structures. The right fit depends on your turnover, sector, debtor profile and how much control you want to keep over customer relationships.
It’s worth talking to more than one provider before you commit. Most will prepare a worked cost illustration with no obligation, and comparing those side by side is the most reliable way to judge real value.
The information in this article is general in nature, does not constitute financial advice or a recommendation, and should not be relied upon when making finance decisions. Businesses should seek appropriate independent advice before entering into any finance agreement.
