How much does factoring finance cost?

Factoring finance fees typically range from 1–5% of the invoice value per month. Additional admin fees and minimum volume charges may apply. Fundtap charges a single fee from 4% with no monthly fees.

What is the difference between factoring finance and a business loan?

Factoring finance is not a loan — you are selling invoices you have already earned. This means it does not add debt to your balance sheet and approval is based on your customers' creditworthiness, not just yours.

What industries use factoring finance?

Factoring finance is common in construction, manufacturing, logistics, recruitment, wholesale, and professional services — industries where long payment terms are standard.

What is selective factoring?

Selective factoring lets you choose which invoices to fund, rather than assigning your entire debtor ledger. Fundtap operates on this model with no minimums or lock-ins.

What Is Factoring Finance & Is It Right For Your Business?

Q: What is factoring finance?

Factoring finance is when a business sells its unpaid invoices to a finance company in exchange for immediate cash. The finance company then collects payment from the business's customers.

What Is Factoring Finance?

Factoring finance is a type of business funding that uses unpaid invoices as the basis for accessing cash. Rather than waiting for customers to pay, a business works with a factoring finance provider to receive the value of its invoices upfront — converting outstanding debts into immediate working capital.

Factoring finance is sometimes called invoice factoring, debtor finance, or accounts receivable financing. These terms all describe variations of the same concept: turning invoices into cash faster.

Types of Factoring Finance

Full-service factoring: The finance provider purchases your invoices and manages collections from your customers. Common with traditional factoring companies.
Invoice discounting: You borrow against invoices while retaining control of collections. More confidential, typically for larger businesses.
On-demand invoice financing (FundTap): You select individual invoices to fund, with no contracts or minimums. The simplest and most flexible form of factoring finance.

Is Factoring Finance Right for Your Business?

Factoring finance works best for B2B businesses that invoice customers on 30–90 day payment terms. If your business regularly waits weeks or months to get paid, factoring finance can dramatically improve your cashflow.

FundTap makes factoring finance simple — connect your accounting software, choose which invoices to fund, and receive cash the same day. No contracts, no minimum volumes.

For Australian and New Zealand businesses
Works with Xero, MYOB, QuickBooks, and Reckon
Fund from one invoice to your entire book — your choice

See FundTap's approach to factoring finance →

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.

What types of businesses use factoring finance?

Good fit: B2B businesses in logistics, manufacturing, wholesale, staffing, construction, trades, and professional services that invoice on 30–90 day terms.
Less suitable: Businesses with very low invoice values, B2C businesses, or those that receive payment immediately at point of sale.

Is factoring finance the same as invoice finance?

Yes — factoring finance and invoice finance describe the same broad category of funding. The terms are often used interchangeably. Within that category, there are variations: full-service factoring (where the provider manages collections), invoice discounting (confidential, you manage collections), and on-demand financing (FundTap's model — choose which invoices to fund, when you need to).

How does factoring finance affect my cashflow?

Factoring finance converts your unpaid invoices into immediate cash — reducing the gap between completing work and getting paid. For businesses with 60 or 90-day payment terms, this can mean the difference between having funds to pay staff, suppliers, and overheads versus running out of working capital.

Frequently Asked Questions

What is factoring finance?

Factoring finance is a type of business funding that uses unpaid invoices to access immediate cash. A business works with a factoring finance provider to receive the value of its outstanding invoices upfront, instead of waiting for customers to pay.

How does factoring finance work?

You submit an unpaid invoice to a factoring finance provider. They advance you a percentage of the invoice value — typically 70–90% — within hours. When your customer pays the invoice at the due date, the provider receives repayment and releases any remaining balance to you, minus a fee.

Is factoring finance the same as invoice finance?

Yes, broadly speaking. Factoring finance and invoice finance are often used interchangeably. Both involve using unpaid invoices to access early payment. The main variation is whether the provider manages collections (factoring) or you retain control (discounting or FundTap's model).

What does factoring finance cost?

Factoring finance fees typically range from 1% to 5% of the invoice value, depending on the provider, the size of invoices, and payment terms. FundTap charges simple, transparent fees with no setup or hidden costs.

Is factoring finance a loan?

No. Factoring finance is not a loan. You are accessing money already owed to your business through invoices. There is no new debt on your balance sheet and no fixed repayment schedule.

Is factoring finance right for my business?

Factoring finance suits B2B businesses that issue invoices on 30–90 day payment terms and experience cashflow pressure from late or slow-paying customers. If your business regularly waits weeks or months to get paid, factoring finance can provide meaningful relief.

How do I apply for factoring finance with FundTap?

Connect your accounting software — Xero, MYOB, QuickBooks, or Reckon — to FundTap. Once approved, you can select individual invoices to fund and receive cash the same day. There are no contracts or minimum commitments.

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 Factoring Finance

Explore our guides on factoring finance, invoice financing, and cashflow solutions for small and medium businesses.

Managing Cash Flow in the Freight and Logistics Industry

An In-Depth Guide To Invoice Factoring