Stock and inventory funding for UK businesses

Stock funding is three different products wearing one name, and the cheapest one depends entirely on who owes you money. A term loan or advance pays the supplier and you repay from sales. Invoice finance releases cash against what your customers already owe. Trade finance pays the supplier directly against a purchase order, before you have anything to invoice. Ask for "stock funding" and you can be sold any of the three.

Invoice finance is the biggest of the three by a distance. UK Finance members had 40,100 businesses on invoice finance or asset-based lending, with £22.7bn advanced against invoices and assets in a year. Our own invoice panel runs to 20 lenders with product limits from £500 to £25 million (checked September 2026).

Trade finance is the one to ask hard questions about, because several well-known names no longer do it themselves. Bibby Financial Services, one of the oldest invoice financiers in the country, now says on its own site that trade finance is provided by third-party specialists it refers work to rather than by Bibby. If a facility is being described to you as trade finance, ask which company will actually be your counterparty and whose terms you are signing.

Almost nobody in invoice finance publishes a price, which makes the ones who do genuinely useful. Hydr, trading as HN Flow Ltd, runs a live fee calculator with a worked default on its own site: a £3,000 invoice, a £118.50 fixed fee, £2,881.50 received. That is a shade under 4% of face value, with credit protection bundled into the single fee and the fee locked once quoted even if the debtor pays late. Bibby, by contrast, publishes no pricing at all, and neither does Skipton Business Finance.

The structural difference that matters more than the fee is how much of the invoice you get. Most whole-turnover facilities advance a percentage and hold the rest back until the customer pays. Penny buys 100% of the invoice value for a single fixed percentage, with no setup fee and no monthly service fee, and takes construction, haulage and local-authority contracts, which are the exact profiles most whole-turnover factors restrict. It also accepts sole traders on its single-invoice product, which very few do.

For a straight loan to buy stock, the panel spans widely by size. At £25,000 unsecured, 36 lenders have a product covering it over terms of 1 to 72 months, with a median published floor of 19.2%. At £100,000 it is 45 lenders and a median floor of 15.3% (checked September 2026). Those are floors across panel products, not offers.

Invoice-backed routes are consistently softer on the borrower than unsecured ones, because the lender is underwriting your customers as well as you. 15 of our invoice lenders will fund a business trading under a year and 14 will fund a genuine start-up, against 5 on the unsecured side. 12 will look at a phoenix company and 17 do not need a homeowning director (checked September 2026).

One honest limitation. Where you are buying stock from abroad on a proforma invoice with no order behind it, and you have been trading eight months, the market is thin and we will tell you so rather than run an application that wastes a fortnight. Panel composition changes over time, and the lender makes its own decision either way.