Will AR factoring affect my customer relationships?

Traditional AR factoring does involve your customers being contacted by the factoring company, which some customers may find unexpected. Fundtap is fully confidential — your customers never know.

What types of invoices qualify for accounts receivable factoring?

Only B2B (business-to-business) invoices typically qualify. The customer must be a creditworthy business, and the goods or services must already have been delivered.

How quickly can I access cash through AR factoring?

Traditional AR factoring typically takes 1–3 business days. Fundtap deposits funds within hours of selecting your invoices.

What Is Accounts Receivable Factoring & Is It Right For Your Business?

Q: What is the difference between accounts receivable factoring and a bank loan?

AR factoring is not a loan. You are selling invoices you have already earned. This means no debt is added to your balance sheet, and approval is based on your customers' creditworthiness rather than your credit history.

What Is Accounts Receivable Factoring?

Accounts receivable factoring — also called AR factoring — is when a business sells its outstanding accounts receivable (unpaid invoices) to a finance company in exchange for immediate cash. Instead of waiting 30, 60, or 90 days for customers to pay, you access most of the receivable value now.

This is the same product as invoice factoring. "Accounts receivable" is the accounting term for money owed to your business by customers — factoring those receivables means converting them to cash without waiting.

How Accounts Receivable Factoring Works

You deliver goods or services and record the amount owed as an account receivable.
You submit the receivable to an AR factoring provider like FundTap.
You receive up to 90% of the receivable value within hours.
Your customer pays at the invoice due date — repayment is automated.
You receive the remaining balance minus a small fee.

Accounts Receivable Factoring vs FundTap Invoice Financing

Traditional AR factoring companies purchase your receivables outright and manage collections from your customers — your clients know a third party is involved, which can affect relationships.

FundTap takes a different approach: you retain control of your customer relationships, and repayment is automated when your customers pay you. It delivers the same cashflow benefit with less disruption to how you run your business.

No lock-in contracts or minimum invoice volumes
Same-day funding via Xero, MYOB, QuickBooks, or Reckon
Works for both Australian and New Zealand businesses
Transparent, straightforward fees

Learn how FundTap invoice financing works →

Is Invoice Factoring Right for My Business?

Invoice factoring can be an excellent financial solution for many businesses, but it’s important to determine if it’s the right fit for your specific situation. Here, we break down the key factors to help you decide.

Is accounts receivable factoring the same as invoice factoring?

Yes. Accounts receivable factoring and invoice factoring describe the same product. Accounts receivable is the accounting term for money owed to your business by customers. Factoring means selling those receivables for immediate cash. Other common names include debtor finance, AR finance, and debtor factoring.

Who qualifies for accounts receivable factoring?

Good fit: B2B businesses that issue invoices to customers on payment terms of 30–90 days — including manufacturing, logistics, staffing, wholesale, construction, and professional services.
Less suitable: Businesses that receive payment immediately (retail, hospitality) or that do not issue formal invoices to other businesses.

AR factoring vs accounts receivable line of credit — what's the difference?

AR factoring: You sell specific invoices for immediate cash. Each funding event is tied to a specific receivable. More flexible and accessible — no long-term facility needed.

AR line of credit: A revolving credit facility secured against your receivables. Typically offered by banks and requires strong credit history and a formal review process.

FundTap's model is closer to AR factoring — you choose which invoices to fund, on demand, with no formal credit facility required.

Frequently Asked Questions

What is accounts receivable factoring?

Accounts receivable factoring is when a business sells its outstanding invoices (accounts receivable) to a finance company for immediate cash. It is the same as invoice factoring — AR is simply the accounting term for money owed to your business by customers.

How does AR factoring work?

You submit an outstanding invoice or account receivable to an AR factoring provider. They advance you up to 90% of the value upfront. When your customer pays at the invoice due date, repayment is processed and you receive the remaining balance minus a fee.

Is accounts receivable factoring the same as invoice factoring?

Yes. Accounts receivable factoring, invoice factoring, debtor finance, and AR finance all refer to the same type of product — using unpaid invoices as the basis for accessing immediate cash.

What is the difference between accounts receivable factoring and a line of credit?

AR factoring is tied to specific invoices — you access cash based on the value of individual receivables. A line of credit is a revolving facility based on your overall business creditworthiness. Factoring is generally faster to set up and more accessible for SMEs, while a line of credit offers more flexibility once established.

How much does accounts receivable factoring cost?

AR factoring fees typically range from 1% to 5% of the receivable value. FundTap charges simple, transparent fees with no hidden costs — no setup fees, no minimum charges.

Is FundTap an accounts receivable factoring company?

FundTap is an invoice finance provider that operates similarly to an AR factoring company — advancing funds against your unpaid invoices. The key difference is that with FundTap, you retain control of customer relationships. Repayment is automated when your customers pay you, so FundTap never contacts your clients directly.

Who qualifies for accounts receivable factoring with FundTap?

FundTap is available to Australian and New Zealand B2B businesses that issue invoices on payment terms. You need to connect your accounting software — Xero, MYOB, QuickBooks, or Reckon — and have invoices to qualifying customers. There are no minimum volumes or lock-in contracts.

How Fundtap’s Invoice Factoring works

Connect Your Accounting Software

Select Your Invoice(s)

Receive Cash Within Hours

Repayment Is Automated

View Demo

How does Fundtap compare?

		Online Invoice Factoring	Traditional Factoring
Easy to establish
Online and mobile
Link to Accounting System
Application approval	1 hour	48 hours +	2 weeks +
Quick funding	Minutes	Days	Days
No Establishment fees
No Admin or System fees
Use only when needed, without penalty

Learn more about Accounts Receivable Finance

Read our latest guides on accounts receivable factoring, AR finance, and cashflow management for Australian and New Zealand businesses.

Managing Cash Flow in the Freight and Logistics Industry

An In-Depth Guide To Invoice Factoring