Rate Indexes / Invoice Finance
UK Invoice Finance Rate Index 2026
Invoice finance pricing is structured differently from loan APRs. Lenders typically charge a service fee (percentage of turnover processed through the facility) plus a discount charge (interest on funds drawn, based on base rate or SONIA plus a margin). This index shows typical ranges for both components from Spark Finance's lender panel.
Key Facts - Invoice Finance
0.5% to 2.5% of invoice value
SONIA + 2% to SONIA + 6% per annum
70% to 90% of invoice value
£100,000 (some lenders from £50k)
1 to 4 weeks typically
12 months typical (some 3-month or rolling)
Typically max 25-30% with one debtor
Indicative Rate Ranges
Rates are indicative only. Your actual rate depends on credit profile, trading history, loan size, security offered, and the lender's current appetite. These ranges do not constitute a quote or guarantee.
| Category | Indicative Rate | Notes |
|---|---|---|
| Service fee (prime - large turnover, strong debtors) | 0.2% to 0.8% of turnover | Typically turnover above £2m with blue-chip debtors |
| Service fee (standard - established SME) | 0.8% to 1.8% of turnover | Most common range for growing SMEs |
| Service fee (specialist/small) | 1.8% to 3.0% of turnover | Smaller facilities, concentrated debtor books, or newer businesses |
| Discount charge (prime) | SONIA + 1.5% to 2.5% pa | Strong covenant, good debtor quality |
| Discount charge (standard) | SONIA + 2.5% to 4.5% pa | Typical for established SME facilities |
| Discount charge (specialist) | SONIA + 4.5% to 7.0% pa | Higher risk debtor book or business profile |
Eligibility Factors
- Debtor quality - lenders assess creditworthiness of your customers, not just your business
- Turnover - minimum typically £100,000 annual invoiced turnover
- Invoice terms - typically B2B invoices with 30-90 day payment terms
- Debtor concentration - if one client represents more than 30-40% of turnover, options narrow
- Trading history - 6-12 months minimum; established businesses access better rates
- Sector - some sectors not eligible (retail, consumer, very short-term projects)
- Dispute history - high levels of invoice disputes make facilities harder to obtain
Lender Types
- Bank-owned invoice finance providers (HSBC, Barclays, Lloyds)
- Independent invoice financiers (Bibby Financial Services, Close Brothers)
- Fintech invoice lenders (MarketFinance, Kriya, Satago)
- Specialist and non-notification lenders
- Single-invoice and spot factoring providers
Frequently Asked Questions
How much does invoice finance cost in the UK?
Invoice finance typically has two cost components: a service fee (0.5-2.5% of invoice value processed) and a discount charge (interest on funds drawn, typically SONIA plus 2-6% per annum). For a business turning over £1m with a typical SME facility, total annual cost might be £8,000 to £25,000 depending on how much of the facility is drawn. This should be weighed against the working capital benefit of receiving 70-90% of invoice value upfront.
What is the difference between factoring and invoice discounting rates?
Factoring (where the lender manages your credit control) and invoice discounting (where you retain credit control) are typically priced similarly, but the service fee for factoring may be slightly higher to account for the credit control service. The key difference is confidentiality: discounting is not disclosed to your customers. Your customers know about factoring as they are directed to pay the lender directly.
Can startups access invoice finance?
Some invoice finance providers will consider businesses with as little as 3-6 months trading history if there are good quality invoices from creditworthy customers. The minimum turnover threshold varies by lender. Spark Finance works with specialist providers who can accommodate newer businesses where others cannot.
Methodology
Invoice finance pricing data is compiled from facility proposals received through the Spark Finance broker panel. Fee and discount charge ranges represent the 10th and 90th percentile of initial proposals. SONIA rate as at June 2026 should be added to discount charge margins to calculate approximate total cost. Data updated quarterly.
Source notes
- Spark Finance broker panel - 250+ UK specialist lenders
- Applications processed June 2024 to June 2026
- SONIA = Sterling Overnight Index Average (Bank of England published rate)
- Spark Finance is a credit broker, not a lender
- FCA Authorised, FRN 958123