Invoice finance

Most businesses that sell to other businesses are quietly acting as a bank. They finish the job, raise an invoice and then sit for 30, 60 or sometimes 90 days to be paid, while wages, rent and suppliers can’t wait at all. Invoice finance closes that gap by letting a funder pay you most of the invoice now and collect the rest from your customer later.

The three main types

Type	How it works	Who usually collects	Typical fit
Factoring	The funder takes over the invoices and the debt	The funder	Smaller or newer businesses happy to hand over collections
Invoice discounting	You borrow against the whole ledger, confidentially	You	Established firms with good credit control
Single invoice finance	You pick individual invoices to fund, one at a time	Varies by funder	Occasional large invoices, project work

All three rely on the same idea: an unpaid invoice from a creditworthy customer is an asset with a near-certain cash value, and a funder will lend against it. A fuller product overview sits on our invoice finance page.

A single invoice, start to finish

A Perth steel fabricator finishes a job for a large mining contractor and invoices $60k on 60-day terms. The illustrative figures below show the shape of a single-invoice deal:

1. Day 1: the invoice goes to the funder, who checks the contractor’s payment record and confirms the work was delivered.
2. Day 2: the funder advances 80%, so $48k lands in the fabricator’s account. That pays the next fortnight’s wages and a steel order.
3. Day 58: the contractor pays the full $60k into the account the funder nominated.
4. Day 59: the funder releases the remaining $12k less its fees. If those fees came to $1,500, the fabricator receives $10,500.

The fabricator paid $1,500 to have $48k nearly two months early. Whether that’s good value depends on what the money earned in the meantime, which is the question to ask before signing. You can test your own invoice size and terms in the invoice finance calculator.

What do funders actually check?

The spotlight is on your customers as much as on you. Expect questions about who they are, how long they take to pay, whether any invoices are disputed, and how heavily you depend on a single buyer. Invoices to consumers, related businesses and overseas buyers without insurance generally don’t qualify.

One step worth taking first: if your customer is a large business, look it up on the government’s Payment Times Reporting register. Big companies must publish their typical payment times to small suppliers, so you can see whether your 30-day terms tend to stretch out in practice. Funders look at the same kind of history.

Security over your receivables is normally taken through a PPSR registration. Where your bank has an existing general security agreement, expect the funder to ask it to sign a priority deed. Some customer contracts also restrict assigning the debt; the Personal Property Securities Act has a specific section on those restrictions, but funders still want to read the contract first, so have it ready.

Funding a big order or contract? Start with a short enquiry and we’ll tell you how your ledger is likely to be viewed.

Costs, in plain dollars

Pricing usually combines an admin or service fee with a charge on whatever has been advanced, sometimes with a monthly minimum and setup costs. Ask every funder for a dollar estimate based on your average monthly invoicing and typical drawings. That figure is what you compare against an overdraft or a business line of credit.

Related terms

Debtor finance, aged receivables, debtor days, concentration limit and assignment of debts.

Waiting on customers to pay?

If good customers on long terms are squeezing your cash flow, a facility built on your invoices may suit better than a standard loan. Our form takes about a minute to describe your ledger, and asking doesn’t put an enquiry on anyone’s credit file. We don’t broadcast your enquiry to dozens of funders. One specialist reviews your customer mix and phones you personally. Please list your real monthly invoicing and your biggest customers, so the first suggestion matches how your book actually looks.

Unlock cash from your invoices →