UK Invoice Finance Statistics 2026

UK Finance says its invoice finance and asset-based lending members provide well over £20 billion to tens of thousands of UK businesses at any one time, while the average debtor day for SMEs remained above 50 days. Bad debt protection claims and client numbers have both risen steadily since 2021, reflecting growing adoption across manufacturing, recruitment, and transport sectors.

Key statistics

### UK Invoice Finance 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 |
| Average payment terms experienced by UK SMEs in 2024 | 52 days | FSB (Federation of Small Businesses) |
| Proportion of UK small businesses that reported being paid late in 2024 | 50% | FSB (Federation of Small Businesses) |
| Estimated value of late payments owed to UK SMEs at any one time | £1.6bn | FSB (Federation of Small Businesses) |
| Bank of England base rate as of December 2025, directly influencing invoice finance discount rates | 3.75% | Bank of England |
| Total number of SMEs in the UK at the start of 2024 | 5.6 million | Department for Business and Trade (DBT) Business Population Estimates |
| Proportion of all UK private sector businesses that are SMEs | 99.9% | Department for Business and Trade (DBT) Business Population Estimates |
| Combined annual turnover of UK SMEs in 2023 | £2.4tn | Department for Business and Trade (DBT) Business Population Estimates |
| Share of UK SME external finance applications that involved invoice finance in 2023 | 17% | British Business Bank Small Business Finance Markets Report |

Source: UK Finance, FSB (Federation of Small Businesses), Bank of England, Department for Business and Trade (DBT) Business Population Estimates, British Business Bank Small Business Finance Markets Report

What the numbers mean

Invoice finance has become one of the most significant sources of working capital for UK businesses, with UK Finance members providing well over £20 billion to tens of thousands of client firms at any one time. The market divides broadly into two products: confidential invoice discounting, where the business retains control of its sales ledger, and invoice factoring, where the finance provider manages collections. Discounting accounts for the larger share of clients and advances, reflecting its appeal to more established firms with stronger internal credit control.

The sectors driving the most demand are manufacturing, wholesale and retail trade, transport and logistics, and recruitment. These industries share a common characteristic: they raise invoices well in advance of receiving payment, creating cash flow gaps that invoice finance is designed to bridge. The FSB has consistently found that late payment remains a serious problem, with around half of small businesses reporting they were paid late in 2024 and average payment terms stretching beyond 50 days.

The Bank of England base rate stood at 3.75% in December 2025, meaning the cost of invoice finance remains higher than in the near-zero rate era of 2020 to 2022, but providers have competed on margin and service. Bad debt protection, sometimes called credit insurance, is now embedded in many factoring facilities.

With 5.6 million SMEs collectively turning over £2.4tn, the penetration of invoice finance remains relatively low. Industry bodies and the British Business Bank continue to highlight awareness and perceived complexity as barriers to adoption, suggesting significant headroom for market growth.

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