This has been a rapidly expanding market with between 50 to 60 active factors and invoice discounters now operating in the UK which fall into three main categories:

•    The main clearing banks’ owned and branded firms. These obtain much of their work by their in-house bank referrals although some work hard to produce strong solutions for clients and as a result are successful competitors in the market.

•    Large independents, many of which are owned by smaller or foreign owned banks or other financial institutions. They often provide both factoring and invoice discounting facilities, as well as being able to provide packages of structured finance combining a number of asset based elements including property and plant and machinery loans as well as stock and debtor finance, and are therefore sometimes known generically as asset based lenders or ‘ABLs’. Some of these are now also offering ‘cash flow’ loans or Small Firms Loan Guarantee backed loans on top of the level of funding they are prepared to advance against the value of your available security.

•    Smaller players, generally focused on factoring but who may well have developed particular niches such as construction debt, architects’ practices, government debt, or care homes, which can require particular expertise in lending.

The number of players in the market is therefore an opportunity for your business as it potentially provides you with a large number of lenders willing to compete for your business. However this degree of choice can also provide a problem in finding the right lender as the number of offerings can be confusing.