Invoice finance vs invoice discounting: are they different?
These two terms create a lot of confusion. Here’s what they actually mean — and why for most small businesses, the distinction doesn’t matter as much as people think.
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The short answer
In New Zealand and Australia, “invoice finance” and “invoice discounting” are often used to mean the same thing: advancing money against unpaid invoices while keeping your customer relationships intact.
The distinction that matters is between confidential (customers don’t know) and disclosed (customers are notified). Fundtap is confidential — your customers never find out.
| Feature | Invoice Finance | Invoice Discounting |
|---|
| What it means | General term for funding against invoices | Specific term for confidential invoice funding |
| Customer notification | Varies by provider | Customers don't know |
| Who collects payment? | Varies | You collect as normal |
| Minimum requirements | Varies by provider | Usually larger businesses |
| Fundtap's approach | Confidential invoice finance | Matches invoice discounting definition |
What matters more than the label
- Is it confidential? (Your customers shouldn’t find out)
- Is it selective? (You should be able to fund specific invoices, not your whole ledger)
- Is there a lock-in? (You should be able to stop at any time)
- Is the fee transparent? (One flat fee is easy to understand)
Fundtap ticks all four.
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