Who is eligible for invoice discounting?

Traditional invoice discounting providers typically require a minimum annual turnover (often $500K+) and established credit control processes. Fundtap has no minimum turnover requirement.

What does invoice discounting cost?

Invoice discounting costs include a service fee (typically 0.1–0.5% of turnover) plus an interest charge on advanced funds. Fundtap charges a single transparent fee from 4% of the invoice value.

Invoice Discounting — What It Is, How It Works & Alternatives

Q: What is invoice discounting?

Invoice discounting is a confidential financing arrangement where a business borrows against the value of outstanding invoices. Unlike factoring, the business retains control of its collections process.

Q: Is invoice discounting confidential?

Yes. Invoice discounting is typically a confidential arrangement — your customers are not notified and continue paying you as normal. Fundtap also works this way.

Q: What is the difference between invoice discounting and invoice factoring?

With invoice discounting, you manage your own collections and the arrangement is confidential. With factoring, the finance company takes over collections and typically notifies your customers.

What Is Invoice Discounting?

Invoice discounting is a financing arrangement where a business borrows money against its unpaid invoices while retaining control of its sales ledger and customer relationships. Unlike invoice factoring, where the finance company collects payment from your customers, with invoice discounting you continue managing collections yourself — the arrangement is typically confidential.

Invoice discounting is common among larger, more established businesses that have the internal capacity to manage their own collections.

How Invoice Discounting Works

You issue invoices to customers as normal.
You submit invoices to an invoice discounting provider and receive a percentage of their value upfront — typically 70–90%.
You continue to chase payment from your customers as normal.
When customers pay, you repay the advance plus a fee to the discounting provider.

Invoice Discounting vs Invoice Factoring vs FundTap

Invoice discounting: Confidential. You manage collections. Better for larger businesses with strong internal processes.

Invoice factoring: The factoring company manages collections. Your customers know a third party is involved. Higher service component, higher cost.

FundTap: The simplest option. Select individual invoices to fund, receive cash the same day, and repayment is automated when your customer pays you. No contracts, no minimums — for businesses of any size.

Works with Xero, MYOB, QuickBooks, and Reckon
Available across Australia and New Zealand
On-demand — fund when you need to, skip when you don't

Compare FundTap invoice financing →

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 invoice discounting confidential?

Yes — invoice discounting is typically confidential. Your customers are not aware that you have borrowed against their invoices. You continue managing collections as normal. This is one of the key reasons larger businesses prefer invoice discounting over invoice factoring.

Invoice discounting vs invoice factoring — which is better?

Invoice discounting: Better for larger businesses with strong internal credit control. You manage your own collections. More confidential, but requires more administrative capacity.

Invoice factoring: Better for businesses that want to outsource collections management. The factoring company handles chasing payment — but your customers know a third party is involved.

FundTap: Best for businesses of any size that want simple, flexible, on-demand funding without contracts or collections complexity.

Who is invoice discounting suitable for?

Good fit: Established businesses with a strong debtor book, consistent invoicing volumes, and internal capacity to manage collections.
Less suitable: Smaller businesses or startups that may struggle to meet minimum volume requirements or lack robust credit control processes. FundTap is often a better fit for these businesses.

Frequently Asked Questions

What is invoice discounting?

Invoice discounting is a financing arrangement where a business borrows against its unpaid invoices while retaining control of its sales ledger. Unlike factoring, your customers are not aware of the arrangement and you continue collecting payment from them directly.

How does invoice discounting work?

You submit your invoices to an invoice discounting provider and receive an advance — typically 70–90% of the invoice value. You continue chasing payment from your customers as normal. When they pay, you repay the advance plus a fee, and receive the remaining balance.

What is the difference between invoice discounting and invoice factoring?

With invoice discounting, you retain control of collections and the arrangement is confidential — your customers are not aware. With invoice factoring, the factoring company takes over collections and contacts your customers directly. Invoice discounting is typically used by larger businesses; factoring by smaller ones.

Is invoice discounting confidential?

Yes. Invoice discounting is typically confidential — your customers continue paying you as normal and are not aware that a lender is involved. This is one of its main advantages over full-service invoice factoring.

How much does invoice discounting cost?

Invoice discounting fees are generally lower than full-service factoring because you manage collections yourself. Fees typically range from 0.5% to 3% of invoice value, plus a service charge. FundTap offers competitive, transparent pricing.

Who is invoice discounting suitable for?

Invoice discounting is best suited to established businesses with consistent invoice volumes and strong internal credit control. Smaller or newer businesses may find on-demand invoice financing — like FundTap — more accessible and flexible.

What is a simpler alternative to invoice discounting?

FundTap offers on-demand invoice financing with no contracts or minimum volumes. You select which invoices to fund, receive cash the same day, and repayment is automated when your customer pays. It combines the confidentiality of discounting with the simplicity of a digital platform.

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 Invoice Discounting & Invoice Finance

Read our latest guides on invoice discounting, invoice factoring, and cashflow solutions for Australian businesses.

Managing Cash Flow in the Freight and Logistics Industry

An In-Depth Guide To Invoice Factoring