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From April 2025, changes to National Insurance Contributions (NICs) have significantly increased employment costs for UK SMEs. The employer NIC rate has risen from 13.8% to 15%, and the salary threshold at which NICs are payable has dropped from £9,100 to £5,000 per year.
For small businesses already juggling tight margins and delayed customer payments, this added pressure could seriously disrupt cash flow.
At Skipton Business Finance, we believe that access to fast, flexible funding-like invoice discounting-can be the key to maintaining stability and unlocking growth.
The cash flow challenge for SMEs
The NIC increase means many SMEs will face thousands of pounds in additional payroll costs each year. For example, a business with five full-time employees on minimum wage could see an annual NIC increase of over £10,000.
And with customers taking 30, 60, or even 90 days to pay invoices, the gap between paying your people and getting paid yourself only widens. That’s where invoice discounting can help.
What is invoice discounting?
Invoice discounting is a financial solution that allows businesses to unlock the value of unpaid invoices as soon as they’re issued. You can typically access up to 90% of the invoice value straight away-without waiting for your customer to pay.
Unlike invoice factoring, invoice discounting keeps the credit control and customer relationships in your hands. The facility is usually confidential, so your clients are unaware you’re using a funding provider.
At Skipton Business Finance, our invoice discounting facilities are tailored to each business, providing you with the liquidity you need, when you need it.
Why choose invoice discounting now?
✅ Bridge the payroll gap
With NIC payments increasing, having access to funding as soon as invoices are raised helps businesses cover payroll obligations on time, without relying on bank loans or overdrafts.
✅ No additional debt
Invoice discounting isn’t a loan. It’s an advance on money your business has already earned, helping you improve cash flow without adding to your liabilities.
✅ Keep control of customer relationships
With confidential invoice discounting, you remain in charge of credit control. Your customers continue to pay you directly, maintaining business-as-usual operations.
✅ Flexible and scalable
As your business grows, so does the value of your invoices-and your available funding increases with it. There are no rigid repayment schedules, and the facility adjusts with your sales volumes.
✅ Relationship-based approach
Skipton Business Finance is part of the Skipton Group, known for its ethical, customer-first ethos. We assign a dedicated Relationship Manager within your region to work with you, not just for you-so we can build a funding facility that supports your goals.
Real example: invoice discounting in action
Imagine a wholesaler issuing £150,000 in invoices each month on 60-day payment terms. They’re owed £300,000 at any given time-but still have to pay staff, suppliers, and increasing NICs monthly.
With an invoice discounting facility from Skipton Business Finance, they could release up to £135,000 immediately from those invoices. This enables them to meet payroll obligations, manage operating costs, and continue taking on new business without cash flow disruption.
Who We Support
Skipton Business Finance works with SMEs across a wide range of sectors, including:
- Manufacturing
- Recruitment
- Transport and logistics
- Wholesale and distribution
- Engineering
Whether you’re turning over £500,000 or £10 million, we can create a facility that scales with your business and adapts to seasonal or structural cash flow challenges.
Ready to strengthen your cash flow?
If the April 2025 NIC increases are putting pressure on your business, don’t wait until cash flow becomes a problem. Invoice discounting could provide the working capital you need to stay ahead of costs and focused on growth.
Speak to your Skipton Business Finance team now by calling us on
0800 169 5036 or email us at info@skiptonbf.co.uk