Bounce Back Loan Refinance via Invoice Finance UK 2026

Market Invoice is an independent UK invoice finance comparison site that ranks 87 UK invoice finance providers.

UK businesses with Bounce Back Loans (BBLs, taken 2020-2021, maximum £50,000, 2.5% a year after the first 12 months (GOV.UK)) facing repayment pressure can use invoice finance to free up working capital so BBL repayments stay affordable. Invoice finance typically advances 70 to 90 percent of B2B receivables, with fees that vary by provider. It costs more than the BBL itself, so it is not a way to cut your interest bill: use it to keep repayments current and fund growth, and only pay the BBL down early if you have a non-cost reason (a cleaner balance sheet ahead of a sale or fundraise, for example). Bibby, Hydr, Triver and IGF all serve businesses in BBL repayment phase. Late BBL repayments still damage your credit file, even though the loan is government-guaranteed.

What this page covers

This page covers

Bounce Back Loan refinance via invoice finance UK: how to use invoice finance to accelerate BBL repayment, lender objections, PAYG comparison

Not covered here

General invoice finance education (see /guides/), individual provider reviews (see /providers/), full pricing breakdown (see /guides/costs/)

UK providers worth knowing

ProviderFee fromMin turnoverWhy it fits
HydrVariableNo minSelective spot factoring, no contract
Triver1.5%+No minInstant decisions, fast cashflow release
IGF Invoice FinanceNot published£5mBusinesses over £5m turnover (asset-based lending)
Bibby Financial ServicesNot publishedNot publishedWhole-book with credit control
AP

Adam Parker

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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BBL Refinance via Invoice Finance UK FAQ

Can I refinance my Bounce Back Loan with invoice finance?

Not directly (invoice finance funds receivables, not other loans). But you can use the working capital released by invoice finance to pay down BBL principal faster. The two products coexist: invoice finance funds the receivables side, BBL is on the term loan side. Many businesses do this to free up cashflow for growth; accelerating BBL repayment only makes sense for non-cost reasons, as the FAQ below explains.

Why pay off Bounce Back Loan early?

BBLs charge 2.5% interest after the first year (well below market). The case for early repayment is usually: (1) freeing your business of the term loan obligation for cleaner balance sheet ahead of fundraising or sale, (2) reducing visible debt to support credit applications, (3) eliminating future refinancing risk if BBL becomes a problem. Pure financial argument: 2.5% BBL interest is cheaper than most alternatives, so don't repay early just for cost.

Best invoice finance to free up cashflow for BBL repayment?

Hydr and Triver for selective spot factoring (no contract, no minimum). Skipton for £100k+ whole-book facilities, and Bibby for whole-book facilities with credit control. The key is matching the facility size to the BBL repayment acceleration target.

Will my bank object to invoice finance alongside my BBL?

Usually no. The BBL is government-guaranteed so your bank's exposure is limited. Most banks have no issue with their BBL customers also having invoice finance facilities elsewhere. Some banks may include a clause requiring notification of new debt , check your BBL terms. The bank's debenture (if any) and the invoice finance provider's debenture need to be reconciled (usually via a deed of priority).

BBL Pay As You Grow (PAYG) options vs invoice finance?

PAYG lets you extend BBL term, take a 6-month repayment holiday, or move to interest-only for 6 months. PAYG is the right route if the business is genuinely struggling. Invoice finance is the right route if the business is fine but cashflow is tight relative to BBL repayments. Both can coexist.

Cost of using invoice finance to accelerate BBL repayment?

Invoice finance: 0.5-2% per invoice plus 1.5-3% above BoE base on discount charge. BBL interest: 2.5% APR. Net cost: invoice finance is more expensive per pound but it frees cash for productive use. The economic case depends on what you do with the released cash. If you're using it for growth investment with 15%+ ROI, invoice finance pays for itself many times over.

Can I use invoice finance to refinance a Bounce Back Loan?

Yes, indirectly. Invoice finance cannot directly pay off a Bounce Back Loan because the BBL is a personal-debt-style facility on the company balance sheet, not a working-capital facility. What invoice finance does is free up cash flow so monthly BBL repayments are affordable without further borrowing.

Many SMEs that took BBLs in 2020 are now using invoice finance to release £100,000 to £500,000 of working capital tied up in unpaid receivables, then using the released cash to keep BBL repayments current rather than entering Pay As You Grow extensions.

Will an invoice finance provider lend against my company if I still have a BBL?

Yes. Bounce Back Loans do not block invoice finance underwriting. BBLs sit as government-guaranteed unsecured debt on the balance sheet and most mainstream UK invoice finance providers (Bibby, Ultimate Finance, Close Brothers, Aldermore) underwrite alongside an outstanding BBL without issue.

The provider will check that BBL repayments are current, that the company is solvent, and that the BBL is not in formal default. If you are on Pay As You Grow extensions, providers will want to see the new repayment schedule but will still write the facility.

Is invoice finance cheaper than rolling a BBL forward?

Different products, different comparison. Bounce Back Loans were priced at 2.5% fixed APR over six years (extendable to ten years via Pay As You Grow), among the cheapest debt facilities in UK SME history. Invoice finance is not cheaper than a BBL in interest-rate terms.

The economic case for invoice finance is releasing trapped working capital (the 70% to 95% of unpaid invoices you are owed), which lets the BBL run to term comfortably. Use invoice finance to maintain BBL repayments; do not use it to pay off the BBL early.

Which providers are best for SMEs still carrying BBL debt?

Bibby Financial Services, Ultimate Finance, Close Brothers and Aldermore all underwrite alongside outstanding BBLs without issue. For startups or sub-£250,000 turnover SMEs with a BBL, Ultimate Finance and Hydr are the most accessible. Avoid high street banks (Barclays, Lloyds, NatWest, HSBC) for this profile: their post-2020 SME credit policy treats outstanding BBLs as a negative factor and setup is slow.

Independents take a pragmatic view: BBLs are normal SME balance-sheet furniture in 2026 and do not block underwriting on a clean trading business.