Quick answer
Fast invoice finance advances a large share of the value of unpaid invoices owed to your business by other businesses, so you are not waiting 30, 60 or 90 days to be paid. Once a facility is set up, new invoices can often be funded within a day. The first setup takes longer than an unsecured loan because the lender checks your debtors.
Key points
- Releases cash locked up in invoices to business customers
- Ongoing funding grows as your sales grow
- First setup involves checking your debtor ledger
- Once running, new invoices can be funded very quickly
If your business is profitable on paper but always short of cash, look at your debtor list. For many trade, wholesale and service businesses, tens of thousands of dollars sit in invoices that are completely legitimate and simply not due yet. Invoice finance unlocks that money now, so you can pay wages and suppliers without waiting on your customers’ payment runs.
How invoice finance works
You issue invoices to your business customers as usual. The funder advances a percentage of each invoice’s value soon after it is issued. When your customer pays, the funder releases the balance to you, minus its fees. As your sales grow, so does the amount available, which is why invoice finance suits businesses that are growing faster than their cash.
Speed: the first advance versus the rest
Invoice finance is fast once it is running, but the first advance takes a little longer than an unsecured loan. The funder needs to understand who your customers are, how reliably they pay and whether any invoices are disputed. Expect a review of your aged debtors report, a sample of invoices and your bank statements.
| Stage | What happens | Typical speed |
|---|---|---|
| Setup | Debtor review, agreement, account setup | Days rather than hours |
| First advance | Approved invoices funded | Once setup is complete |
| Ongoing advances | New invoices uploaded and funded | Often within a day |
So if a payroll is due tomorrow and you have never used invoice finance, a 24-hour unsecured business loan or same-day working capital is likely to be faster for this week, with invoice finance set up for the months ahead.
If the deadline is already on top of you, start the 60-second enquiry now and read the rest while a real person looks at it.
Who it suits
- Labour hire, cleaning, security and facility services businesses paid monthly by larger clients.
- Wholesalers and manufacturers selling to retailers on 30 to 60 day terms.
- Transport operators invoicing freight customers on account.
- Professional and creative services with large business clients and slow approval chains.
It is less useful for businesses that are paid on the spot, such as cafes and retail shops, or for those whose customers are mostly individuals.
Cost and control
Invoice finance usually combines a service fee with a charge for the money advanced. Rather than chasing a rate, compare the total cost over a typical month of invoices and weigh it against what the cash lets you do, such as taking supplier discounts or bidding on bigger contracts. Read the agreement closely for minimum terms, exit fees and which invoices count as eligible.
Fixing the cause as well as the symptom
Funding invoices is one answer to slow payers. Tightening terms is another. Clear payment terms, prompt invoicing and polite, early follow-up all shorten the time money is tied up. Government guidance on payment terms is a good starting point, and our page on what to do when a customer has paid late covers the urgent side.
A worked example (illustrative)
A commercial cleaning company invoices a property manager about $120,000 a month on 45-day terms and pays its cleaners weekly. Every month, the business is carrying roughly six weeks of wages before the money comes in. With an invoice finance facility in place, each month’s invoices are uploaded as they are issued and most of their value is advanced within a day. Wages are covered from the advances, the property manager pays on its usual cycle, and the balance comes back to the business less the funder’s fees. The owner stops juggling and starts quoting for bigger contracts.
What lenders will ask for
Before you start, check you can lay your hands on:
- Aged debtors report showing who owes what and for how long
- Copies of the invoices you want funded
- Customer contact details and terms
- Business bank statements
- Photo ID and ABN
Speed bumps to avoid
The usual suspects when things drag:
- Disputed or partly delivered invoices
- One customer making up most of the ledger
- Invoices raised before the work is complete
- Missing proof of delivery or sign-off
A note on the enquiry form
The enquiry form asks for the amount, purpose, time trading, monthly revenue, credit history, state and whether you own property. Each answer points your enquiry towards the right lane. When the answers are accurate, the first call can go straight to approval. When they are rounded up, guessed or left vague, the assessor has to unpick them, and that is where hours turn into days. If you are unsure of a figure, give your best honest estimate and say so.
In a nutshell
- Releases cash locked up in invoices to business customers
- Ongoing funding grows as your sales grow
- First setup involves checking your debtor ledger
- Once running, new invoices can be funded very quickly
What happens after you enquire
There is nothing magic about fast funding. It is mostly about removing waiting time. We ask for the right evidence at the start instead of drip-feeding requests, we do not need a valuation on property-secured loans, and documents are signed online rather than posted. That is why a decision within the hour is common and why money can be in your account within 24 hours. The part we cannot control is how quickly signatures and documents come back, so having them ready makes the biggest difference.
Find out how fast you could be funded
If this sounds like your situation, the next step takes about a minute. There is no credit check to enquire, your details are not sprayed to multiple lenders, and a real person picks it up. The more accurate your answers, the quicker the match. Enquire now.
Frequently asked questions
What kinds of invoices can be financed?
Generally invoices issued to other businesses or government bodies for work already completed or goods already delivered. Invoices to consumers, or for work not yet done, usually are not eligible.
How fast is the first invoice finance advance?
The first advance takes longer than later ones, because the lender reviews your debtors and sets up the facility. If you need money within 24 hours for the first time, an unsecured loan is usually quicker.
Will my customers know?
Some facilities are disclosed, meaning customers pay into an account controlled by the funder, while others are confidential. The type affects cost, setup time and how much can be advanced.
What happens if a customer does not pay?
That depends on whether the facility is with or without recourse. In most small business facilities, you remain responsible if the customer does not pay.
Start the clock right here
The same 60-second enquiry, on this page. No credit check to enquire, and a real person picks it up fast.