UK Invoice Discounting vs Factoring Statistics 2026
Invoice discounting carries most invoice finance by value: in UK Finance's last published product split (Q4 2017), 93% of client sales went through discounting, although client numbers were much closer (16,519 domestic discounting clients against 15,291 domestic factoring clients). UK Finance says its members provide well over £20 billion at any one time, and that client businesses had combined turnover of over £315 billion in 2024.
Key statistics
Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance, checked September 2026). Source: UK Finance
Combined annual turnover of businesses supported by invoice finance and asset-based lending, 2024. Source: UK Finance
Client sales supported by IF/ABL products, 2022. Source: UK Finance
Client sales supported by IF/ABL products, 2021. Source: UK Finance
Previous record year for client sales supported by IF/ABL, 2018. Source: UK Finance
Client businesses using IF/ABL products, 2022, broadly stable on prior years. Source: UK Finance
Client businesses with turnover of £10m or more using IF/ABL, 2022. Source: UK Finance
Year-on-year growth in the number of £10m-plus turnover businesses using IF/ABL, 2022. Source: UK Finance
Bank of England base rate underpinning invoice finance discount charges, last moved 18 December 2025. Source: Bank of England
Active invoice finance and asset-based lending providers operating in the UK market. Source: Market Invoice provider directory
| Metric | Value | Source |
|---|---|---|
| Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance, checked September 2026) | Well over £20bn | UK Finance |
| UK client businesses supported by UK Finance IF/ABL members at any one time | Tens of thousands | UK Finance |
| Combined annual turnover of businesses supported by invoice finance and asset-based lending, 2024 | £315bn+ | UK Finance |
| Client sales supported by IF/ABL products, 2022 | £314bn | UK Finance |
| Client sales supported by IF/ABL products, 2021 | £276bn | UK Finance |
| Previous record year for client sales supported by IF/ABL, 2018 | £288bn | UK Finance |
| Client businesses using IF/ABL products, 2022, broadly stable on prior years | ~35,000 | UK Finance |
| Client businesses with turnover of £10m or more using IF/ABL, 2022 | 5,600 | UK Finance |
| Year-on-year growth in the number of £10m-plus turnover businesses using IF/ABL, 2022 | 7%+ | UK Finance |
| Bank of England base rate underpinning invoice finance discount charges, last moved 18 December 2025 | 3.75% | Bank of England |
| Active invoice finance and asset-based lending providers operating in the UK market | 85 | Market Invoice provider directory |
Source: UK Finance, Bank of England, Market Invoice provider directory
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### UK Invoice Discounting vs Factoring Statistics 2026: key figures | Metric | Value | Source | | --- | --- | --- | | Invoice finance and asset-based lending that UK Finance members provide to UK businesses at any one time (UK Finance, checked September 2026) | Well over £20bn | UK Finance | | UK client businesses supported by UK Finance IF/ABL members at any one time | Tens of thousands | UK Finance | | Combined annual turnover of businesses supported by invoice finance and asset-based lending, 2024 | £315bn+ | UK Finance | | Client sales supported by IF/ABL products, 2022 | £314bn | UK Finance | | Client sales supported by IF/ABL products, 2021 | £276bn | UK Finance | | Previous record year for client sales supported by IF/ABL, 2018 | £288bn | UK Finance | | Client businesses using IF/ABL products, 2022, broadly stable on prior years | ~35,000 | UK Finance | | Client businesses with turnover of £10m or more using IF/ABL, 2022 | 5,600 | UK Finance | | Year-on-year growth in the number of £10m-plus turnover businesses using IF/ABL, 2022 | 7%+ | UK Finance | | Bank of England base rate underpinning invoice finance discount charges, last moved 18 December 2025 | 3.75% | Bank of England | | Active invoice finance and asset-based lending providers operating in the UK market | 85 | Market Invoice provider directory | Source: UK Finance, Bank of England, Market Invoice provider directory
“These figures come from UK Finance's member lenders and cover the products and providers that report into its statistics; smaller independent and fintech providers outside that reporting base are not separately broken out, so the true market-wide factoring-to-discounting split may differ slightly from the member figures cited here.”
What the numbers mean
UK Finance's figures show a market settled around confidential invoice discounting by value: in its last published product split (Q4 2017), discounting carried 93% of client sales. By client numbers the two products were much closer. UK Finance's public page today gives only market totals, not a current product split.
Discounting suits businesses with turnover typically above £500,000 that already run their own credit control and want the arrangement to stay confidential from customers. Factoring, where the finance company manages the sales ledger and collects payment directly, remains the entry point for many newer or smaller businesses that have not yet built an internal credit control function, or that want the provider to take on collections.
The wider trend lines matter as much as the split. Client sales supported by IF/ABL rose from £276bn in 2021 to a then-record £314bn in 2022, overtaking the previous 2018 high of £288bn, even though the overall number of client businesses stayed broadly flat at around 35,000.
Growth was instead concentrated at the top end: businesses with turnover of £10m or more using these products grew by more than 7% in 2022 to 5,600 firms. That pattern, rising advances and turnover without a matching rise in client numbers, points to existing users drawing more heavily on their facilities and larger firms entering the market, rather than a broad expansion in the number of SMEs using invoice finance.
With the base rate at 3.75%, discount charges (base rate plus a margin) remain a live cost consideration for any business comparing the two products.
FAQs
What is the main difference between invoice factoring and invoice discounting?
With factoring, the finance provider manages the sales ledger and collects payment directly from customers, who are aware of the arrangement. With invoice discounting, the business keeps control of its own credit control and collections, and the facility is usually confidential from customers.
Why do most UK businesses use invoice discounting rather than factoring?
By value, discounting dominates: in UK Finance's last published product split (Q4 2017), 93% of client sales went through invoice discounting. It tends to suit larger, more established businesses with turnover above roughly £500,000 that already run effective internal credit control and prefer to keep the facility confidential.
Is factoring only suitable for smaller or newer businesses?
Factoring is more common among smaller and younger businesses that have not yet built an in-house credit control function. By number of clients it was close to discounting in UK Finance's Q4 2017 figures (15,291 domestic factoring clients against 16,519 domestic discounting clients), so it remains a significant product in its own right rather than purely a stepping stone.
How does the Bank of England base rate affect invoice finance costs?
Invoice finance discount charges are typically set as the base rate plus a margin. With the base rate at 3.75%, that margin is added on top, so the overall cost of a facility moves up or down when the Bank of England changes rates.
Is the UK invoice finance market growing?
Total client sales supported by invoice finance and asset-based lending rose from £276bn in 2021 to a record £314bn in 2022, and combined client turnover exceeded £315bn in 2024. Growth has come mainly from larger businesses and existing clients drawing more on their facilities, rather than a big rise in the number of client businesses.
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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