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Get my 3 quotes →Market Invoice compares the UK providers that fit this need, and you can get 3 free quotes through eCapital, our introduction partner. Invoice finance for sole traders is possible but limited. Ultimate Finance considers sole traders on a case-by-case basis. Selective (spot) factoring is the easiest route - no minimum turnover and per-invoice funding. However, most providers prefer limited companies, so incorporating (covered below) widens your options considerably.
If you only need to fund the odd invoice, try selective factoring first; if you need funding every month, incorporating is usually the better long-term route. More detail + scope
This page covers
Invoice finance options for sole traders, which providers accept them, and conversion to Ltd company
Not covered here
Tax advice, sole trader vs Ltd accounting, legal formation guidance
Options for Sole Traders
| Option | Accepts Sole Traders | Min Turnover | Notes |
|---|---|---|---|
| Selective / spot factoring | Yes | None | Easiest route, per-invoice, no lock-in |
| Ultimate Finance | Case by case | Not published | Setup within one week, flexible |
| Most other providers | Ltd only | £50k+ | Require limited company |
Why Converting to Ltd Is Worth It
If you regularly need invoice finance, converting from sole trader to limited company is the single best step you can take. It costs £100 at Companies House (Companies House fees), usually takes about 24 hours, and gives you access to the large majority of invoice finance providers, not just the two or three that accept sole traders.
Beyond invoice finance, Ltd status gives you limited liability protection, potential tax advantages above certain income thresholds, and greater credibility when pitching to larger clients. Incorporating removes the most common reason providers give for declining sole traders.
Steps to Convert
- Register at Companies House (£100 online, usually within 24 hours)
- Open a business bank account in the company name
- Re-issue invoices from the Ltd company
- Apply for invoice finance with full access to every provider
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
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