Invoice finance vs bank overdraft: which is cheaper?
Both give you access to money when you need it. But the cost structure, flexibility and access requirements are very different.
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| Feature | Invoice Finance (Fundtap) | Bank Overdraft |
|---|
| What it costs | One flat fee per invoice funded | Daily interest on balance drawn |
| Access | Submit an invoice; get funded in hours | Draw as needed up to limit |
| Tied to invoices? | Yes (B2B invoices required) | No |
| Security required? | Usually none (based on customers' credit) | Often requires property or assets |
| Approval process | Quick AI-based assessment | Bank credit assessment (weeks) |
| Effect on credit rating | No impact | Overdraft appears as a liability |
| Can stop using anytime? | Yes, no exit fee | Yes, but often have facility fees |
The honest comparison
If you’re holding a small amount continuously (e.g. $10,000 for months at a time), an overdraft may cost less. But if you need larger amounts periodically — $50,000 against a big invoice for 30-45 days — Fundtap’s flat fee will typically be more cost-effective.
The other difference: Fundtap doesn’t require property security and doesn’t need a bank relationship. If you have a bank overdraft, keep it. Fundtap can work alongside it.
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