Close Brothers Invoice Finance and Asset Lending
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Product snapshot: Close Brothers Invoice Factoring at a glance
Close Brothers Invoice Factoring
Receivables finance
For many UK businesses, the gap between issuing an invoice and receiving payment creates real working capital strain. Asset-rich firms face a different but related challenge: unlocking value from machinery, vehicles, or equipment without selling them outright.
Close Brothers offers a combination of invoice finance and asset lending designed to address both problems within a single relationship. Rather than piecing together separate facilities from different providers, businesses can access funding secured against unpaid invoices and physical assets through one lender.
This review examines how the Close Brothers approach works, which businesses stand to benefit most, and where alternative funding options may be worth considering.
Understanding Close Brothers Invoice Finance and Asset Lending
Close Brothers is a long-established UK merchant banking group with a significant presence in SME lending. Its invoice finance and asset lending division provides working capital and equipment funding to businesses across a broad range of sectors, from manufacturing and engineering to transport and construction.
On the invoice finance side, Close Brothers offers both factoring and invoice discounting. Factoring includes a collections service where the lender manages the sales ledger and chases customer payments. Invoice discounting allows businesses to retain control of their own credit control while borrowing against outstanding invoices. Both options release up to a percentage of invoice value, typically 80% to 90%, within 24 hours of raising an invoice.
On the asset lending side, the lender provides hire purchase, finance lease, and asset refinance facilities. These allow businesses to acquire new equipment or release cash from assets they already own. The asset itself serves as security, which can mean less reliance on additional personal guarantees or property charges, though guarantees are still common in SME lending.
How Invoice Finance and Asset Lending Work Together
The practical advantage of holding both facilities with Close Brothers is that the two funding lines can complement each other. Invoice finance converts receivables into immediate cash, helping cover day-to-day running costs, wages, and supplier payments. Asset lending funds the acquisition of equipment, vehicles, or machinery that supports longer-term growth.
For a business using both, the lender gains a fuller picture of the company's financial position. This can sometimes lead to more flexible underwriting decisions because the lender sees the full asset base and cash flow position rather than just one slice of it. A manufacturing business, for example, might use invoice finance to bridge the gap between production costs and customer payment, while using asset finance to fund a new production line.
Facilities are structured separately but managed under one relationship. Pricing, terms, and advance rates are set individually for each facility, reflecting the different risk profiles of invoices versus physical assets.
Quick answers: Close Brothers Invoice Factoring
Quick answers
Where This Combined Approach Fits Best
This type of dual-facility arrangement tends to suit established businesses that have both a solid debtor book and tangible assets on their balance sheet. Sectors where this combination works well include manufacturing, engineering, wholesale, transport, construction, and printing.
Businesses experiencing growth often find that rising invoice volumes outstrip working capital, while simultaneously needing to invest in more equipment. A combined invoice finance and asset lending facility can scale with both sides of that growth equation. Seasonal businesses also benefit, as invoice finance flexes with sales volumes and asset finance provides a stable route to acquiring kit ahead of peak periods.
Firms with uneven cash flow, long payment terms, or capital-intensive operations are natural candidates. A haulage company, for instance, might factor its invoices to stabilise cash flow while using asset finance to refresh its fleet.
Strengths Worth Noting
One practical benefit is the administrative efficiency of dealing with a single lender for two significant funding lines. This reduces the time spent managing multiple relationships, reporting to different providers, and negotiating separate terms.
Close Brothers brings a relationship-led approach that many business owners value. Account managers tend to develop a working understanding of the sectors they serve, which can lead to more pragmatic lending decisions than a purely automated or credit-scored process might deliver. The combined view of receivables and physical assets can also support larger overall funding limits than either facility might achieve on its own.
The lender's long history and established position in UK SME finance offers a degree of stability that matters to businesses planning multi-year funding arrangements. Funding lines are less likely to be withdrawn abruptly compared with some newer, algorithm-driven entrants.
Drawbacks and Considerations
A combined relationship with one lender can become a double-edged sword. If the lender's appetite changes or the business falls out of favour during a credit review, both facilities could come under pressure at the same time. Spreading invoice finance and asset finance across different providers reduces this concentration risk.
Personal guarantees are commonly required, particularly for limited companies without significant trading history. Directors should be clear on the extent of their personal exposure before signing. Close Brothers is not a no-credit-check lender; it assesses both business and personal credit profiles as part of underwriting.
Invoice finance facilities often come with minimum contract terms, notice periods, and termination fees that can lock a business in for 12 months or longer. Asset finance agreements are similarly structured with fixed terms. Exiting early can trigger penalties. Businesses expecting a short-term need should scrutinise the contract length and break clauses carefully.
Pricing may not be the cheapest in the market. The relationship-led service and combined funding approach can come at a premium compared with standalone invoice finance from a specialist discounter or asset finance from a single-product lender. Businesses should weigh the convenience of a single relationship against the potential cost savings of using two separate providers.
Comparing With Other Funding Routes
For businesses that only need working capital and have no significant asset base, a standalone invoice finance facility from a specialist provider may be simpler and potentially cheaper. Single-product lenders sometimes offer more competitive advance rates and lower service fees within their niche.
Firms that need a lump sum for a specific purpose but have strong cash flow might consider a term loan instead. Unsecured business loans from alternative lenders can deliver funds within days without tying up invoices or assets as security, though borrowing limits are usually lower than what asset-backed facilities can support.
For asset-heavy businesses that do not want to link their invoice book to borrowing, a standalone asset finance arrangement combined with a business overdraft or revolving credit facility could provide a similar outcome with greater flexibility across providers. The trade-off is managing multiple lender relationships and the potential for gaps between facilities.
Is Close Brothers Invoice Finance and Asset Lending Right for Your Business?
Close Brothers invoice finance and asset lending works best for established UK businesses with tangible assets, a reliable debtor book, and a need for funding that spans both working capital and capital expenditure. Companies in manufacturing, engineering, transport, wholesale, and construction are the most natural fit. The single-lender model suits business owners who value relationship continuity and are comfortable committing to medium-term funding arrangements.
It is less suited to startups with no trading history, businesses with poor credit profiles, or firms that only need one type of funding. Companies that prioritise the lowest possible cost above all else may find better pricing by splitting invoice finance and asset finance across two specialist providers. Short-term or one-off funding needs are also better served by products designed for flexibility rather than ongoing facilities with contractual commitments.
Taking time to compare terms, check contract lengths, and understand personal guarantee requirements before committing will help ensure the facility aligns with the business's actual needs rather than just the lender's product range.
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