Market Invoice compares the UK providers that fit this need, and you can get 3 free quotes through eCapital, our introduction partner. The best invoice finance for startups in the UK is Ultimate Finance (considers startups, advances up to 95%, no published minimum turnover) or Bibby Financial Services (which describes itself as the UK's largest independent invoice finance provider and considers new businesses). Both fund new businesses from day one provided you have creditworthy B2B customers. We compared every provider that accepts startups.
What this page covers
This page covers
Providers that accept startups, what they look for, comparison table, worked example, startup-specific tips, rates and costs
Not covered here
General provider comparisons (see /providers/), established business rates (see /guides/costs/), application process (see /guides/how-to-apply/)
Which Providers Accept Startups?
Most banks require at least 2 years of trading history and filed accounts. That rules out startups entirely. Independent providers are more flexible - several will fund from day one, assessing the debtor book and business model rather than years of accounts.
| Provider | Min Trading | Min Turnover | Advance Rate | Service Charge |
|---|---|---|---|---|
| MarketInvoice3 free quotes | Not a lender or a panel. Tell us about your business and eCapital, our introduction partner, handles your enquiry and comes back to you with quotes. Free to you: eCapital pays us a fixed fee per introduction. | |||
| Ultimate Finance | Considers startups | Not published | Up to 95% | Not published |
| Bibby Financial Services | Considers startups | Not published | Up to 85% | Not published |
| Skipton Business Finance | Not published | £100k | Up to 90% | Not published |
| Novuna Business Finance | Not published | Not published | Up to 90% | Not published |
| Close Brothers | Not published | £750k | Up to 90% | Not published |
What Providers Look for Instead of Trading History
When a startup applies, the provider cannot assess 12 months of bank statements or filed accounts. Instead, they focus on:
- Debtor quality. This is the single most important factor. If your customers are creditworthy businesses with good payment records, the provider has confidence the invoices will be paid. A startup invoicing the NHS, a FTSE 250 company, or a well-established business is a far easier approval than one invoicing other startups.
- Signed contracts or confirmed orders. A contract showing agreed rates, volumes, and payment terms gives the provider security. Even a confirmed purchase order or a letter of engagement is better than nothing.
- Industry. Some industries have more predictable cash flows and clearer proof of delivery. Recruitment (timesheets signed weekly), transport (signed delivery notes), and manufacturing (proof of shipment) are all straightforward. Service businesses with milestone-based invoicing are harder to underwrite.
- Director experience. If the directors have industry experience and have run similar businesses before, the provider sees lower risk. A recruitment startup founded by someone with 10 years in recruitment is a better bet than a first-time entrepreneur in an unfamiliar sector.
- Cash flow forecast. A realistic cash flow projection showing how the facility will be used demonstrates financial awareness. Do not inflate projections - underwriters see through this immediately.
Illustrative Example: Recruitment Startup
The business (hypothetical): A recruitment agency founded 2 months ago by an experienced recruiter. Annual turnover projected at £400,000. Two clients - a logistics company and an engineering firm - both established businesses with strong credit ratings. Weekly invoicing for temporary staff, 30-day payment terms.
The application: Applied to an independent invoice finance provider with 8 weeks of bank statements, signed contracts with both clients, sample timesheets, and a 12-month cash flow forecast.
The outcome (illustrative terms, not a real quote): Approved in 5 working days. Facility limit: £60,000. Advance rate: 90%. Service charge: 1.5%. Discount charge: base rate + 3%. Personal guarantee required (capped at £30,000).
The numbers: On a typical weekly invoice of £12,000, the startup receives £10,800 within 24 hours (90% advance). When the client pays 30 days later, the remaining £1,200 minus charges (£180 service charge at 1.5%, plus about £60 discount charge on £10,800 for 30 days at 6.75% a year, base rate 3.75% + 3%) is released. Total cost per invoice: approximately £240, or 2.0% of invoice value. The startup accesses cash in 1 day instead of waiting 30.
What Startups Pay: Typical Costs
Startups pay more than established businesses because the provider is taking on more risk. The ranges below are indicative, from our own research rather than published rate cards, so treat them as a guide and compare real quotes:
| Fee Type | Startup Rate | Established Business Rate |
|---|---|---|
| Service charge | 1.5-3.0% | 0.5-1.5% |
| Discount charge | Base + 2.5-4.0% | Base + 1.0-3.0% |
| Arrangement fee | £500-£2,000 | £0-£1,500 |
| Minimum monthly charge | £200-£500 | £150-£400 |
| Advance rate | 80-90% | 85-95% |
The good news: after 12 months of clean trading, you can renegotiate or switch to a cheaper provider. Your 12 months of bank statements and payment data make you a much stronger applicant the second time around.
Tips for Startup Applicants
- 1.Get your contracts in writing. A verbal agreement with a client is worth nothing to an underwriter. Get signed contracts, confirmed purchase orders, or at minimum an email from the customer confirming the engagement and payment terms.
- 2.Open a dedicated business bank account immediately. Mixing personal and business banking makes it impossible for the provider to analyse your cash flow. Open a business account from day one and run everything through it.
- 3.Target creditworthy customers. Your debtor book is your application. If you can choose who to work with, prioritise customers with strong credit ratings. One contract with a blue-chip customer is worth more than five contracts with unknown startups.
- 4.Use proper invoicing software. Xero, QuickBooks, or FreeAgent. Professional invoices with proper terms show the underwriter you are running a proper operation. Handwritten or Word document invoices are a red flag.
- 5.Prepare a brief business plan. It does not need to be 50 pages. A clear one-pager covering what you do, who your customers are, your projected turnover, and why you need the facility is enough. It shows the underwriter you understand your own business.
- 6.Plan for the personal guarantee. Almost every startup facility requires one. Understand what you are signing - ask for a capped guarantee (limited to a specific amount) rather than an unlimited one. And negotiate to have it removed at your first annual review.
For startups, debtor quality usually decides the outcome. A day-one business with a contract from a large, creditworthy customer is a far easier approval than a day-one business invoicing another new company with no credit history.
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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