Lloyds Set to Wind Down Invoice Financing Arm, FT Reports

Lloyds Banking Group is preparing to close its invoice factoring business by the end of 2025, according to a report by the Financial Times, marking another setback for small and medium-sized enterprises (SMEs seeking short-term liquidity support.

The service was designed to help cash-constrained businesses manage working capital by allowing Lloyds to purchase unpaid invoices at a discount, giving the bank the right to collect payment once customers settled their bills. The model has traditionally supported firms operating on tight margins and facing delayed receivables.

However, the FT notes that invoice factoring has struggled to deliver meaningful profitability for large banks, with limited opportunities for cross-selling higher-margin products. Lloyds is not alone in scaling back such offerings, as several major UK lenders have shifted their focus away from SME-focused factoring toward larger, more lucrative corporate clients.

While Lloyds declined to comment publicly on the decision, a source familiar with the matter said the bank intends to continue offering alternative support services to SME customers in an effort to minimise disruption.

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