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• 03 Mar

  What To Do If Your Invoice Finance Company Withdraws From The Market

  Rumours are again circulating that another large invoice financier is withdrawing from the market and asking some of their clients to find alternative invoice finance companies.

  We have often been asked to answer questions about what to do if your invoice finance company withdraws from the market. While you might think this sounds very unlikely, it occurs more frequently than you might think and can cause major stress for clients who have to find alternative facilities. There are normally alternatives available as there are many UK providers and it is a perfect opportunity to improve terms.

  FIND ALTERNATIVES NOW

  What To Do If Your Invoice Finance Company Withdraws From The Market

  Multiple circumstances can lead to a provider withdrawing from the market and their clients needing to find alternative facilities.

  Common Reasons Invoice Financiers Exit The Market

  Common reasons for exiting the market, or parts of the market, include:

  • Deciding to withdraw from receivables financing completely.
  • Deciding to close certain products, e.g., withdrawing from factoring (high staff requirement) in favour of invoice discounting. This can be led by staffing factors, cost savings or as a reaction to having suffered client losses or bad debts. There are normally plenty of options if your provider stops offering or supporting the product you are using.
  • Provider insolvency or failure. If a finance company goes into administration or liquidation, its customers will normally need to find an alternative funding solution.
  • Acquisition of a provider. A provider being taken over by another company, and seeking to offload some of their client book, or to amalgamate the clients of one company into another company's operations
  • Risk reviews. Providers reviewing their risk profile and deciding to manage away certain risk segments of their client book. Some clients can be asked to find an alternative provider, in other cases they can refer their clients to a specific alternative provider (which may not always be the best option for all their clients).

  All these circumstances can be less than ideal for the company using receivables financing as it can lead to financial disruption. However, it can also give you the chance to try and improve terms within the process of moving providers.

  Introduction: Facing an Unexpected Funding Disruption

  When a receivables finance provider withdraws from the industry, it can leave businesses scrambling for alternative working capital solutions. Whether your factoring company shuts down, merges, or simply stops offering services, knowing how to respond can prevent cash flow bottlenecks and business instability.

  In this guide, we explore practical steps to keep your funding intact and ensure smooth financial operations.

  1. Assess Your Current Position & Notice Periods

  Start by reviewing your existing funding contract to understand the exit terms:

  • Check if there's a termination notice period before they stop advancing funds.
  • Identify any outstanding liabilities or fees that might apply upon exit.
  • Clarify what happens to your existing unpaid invoices and whether collections remain in place.

  2. Seek an Alternative Invoice Finance Facility

  The good news is that many different providers that offer comparable or even better solutions.

  See our Guide To Moving Between Invoice Finance Providers.

  COMPARE QUOTES NOW

  WARNING: What If Your Existing Provider Introduces A Recommended Alternative Provider?

  This is something that has happened a few times. A provider decided to withdraw from the marketplace, and they entered an arrangement with another provider to allow them priority in taking on the existing clients. The introduced provider may be well matched to your needs, however, there are a few issues with this approach:

  • Is the suggested provider the best alternative for you?  No one provider is the best choice for all companies. Therefore, a recommended provider may not be your best option. If you have to move providers, this is the perfect opportunity for you to check the market and see what's on offer. Perhaps you could improve your pricing, increase funding or gain some other product advantages. An expert broker can help you with this comparison. Call 03330 113622 for support.
  • Why are they recommending this provider?  It would be wise to understand why this particular provider is being recommended. In some cases, a proactive funder may approach a larger funder that is managing away clients and seek the opportunity to strike a deal with the existing party in return for being recommended to their existing clients. The new provider could even be paying the existing provider for this type of preference. This may not give you access to the best provider for your needs. Remember that you can seek your own alternatives or use a broker to connect with the full market of options.

  3. Evaluate Other Business Finance Solutions

  If switching invoice finance companies isn’t an available option or you want to use other forms of funding, consider these options:

  • Business loans - through a bank or other lender, may be an alternative, but funding levels may be less than with book debt finance.
  • Asset-based lending - raising money against more than just book debts if you have other assets.
  • Bank overdrafts - these are simple to understand but often limited availability when compared with receivables funding.

  See our related article: What To Do If You Have Been Asked To Find Another Trade Finance Company.

  4. Strengthen Internal Cash Flow Management

  While securing replacement finance, you might choose to try to improve internal working capital efficiency.

  See our Cash Flow Guide for tips and ideas on increasing cash reserves.

  5. Protect Your Business from Future Finance Disruptions

  To safeguard your company against similar funding shocks in the future:

  • Maintain multiple funding sources instead of relying on a single finance provider.
  • Regularly review your finance provider’s stability (check financial news, Companies House alerts, credit ratings, and industry trends).
  • Establish emergency cash reserves to handle unexpected gaps in funding.

  See our related guidance about: Writing A Business Continuity Plan.

  Take Action Now to Secure Your Funding

  If your invoice finance provider is withdrawing from the market, swift action is key to maintaining financial stability. Whether switching to a new receivables finance partner or exploring alternative funding solutions, proactive planning will help you avoid a cash crisis.

  Need help finding a replacement invoice finance facility? Contact FundInvoice for a free, without any obligation, to compare the best available options on 03330 113622.

  By Glenn Blackman