Will my customers know I am using invoice factoring?

With traditional invoice factoring, yes — your customers are usually notified and may be contacted directly by the factoring company. With FundTap, your customers never know and continue paying you as normal.

Do I have to factor all my invoices?

Traditional factoring often requires you to factor your entire debtor ledger. FundTap lets you choose individual invoices with no minimums or commitments.

Invoice Factoring, What It Is, How It Works & Alternatives

Q: How much does invoice factoring cost?

Invoice factoring typically costs 1–5% of the invoice value per month, plus service fees and potential minimum volume charges. FundTap invoice financing charges a single transparent fee from 4% with no monthly fees or lock-ins.

Q: Is invoice factoring right for my business?

Invoice factoring suits businesses that have consistent invoice volumes and are comfortable with customer notification. If you prefer privacy, flexibility, and no lock-ins, FundTap invoice financing may be a better fit.

What Is Invoice Factoring?

Invoice factoring is when a business sells its unpaid invoices to a third party, called a factoring company, in exchange for immediate cash. Instead of waiting 30, 60, or 90 days for customers to pay, you receive most of the invoice value upfront, within 2 hours of approval.

The factoring company then collects payment directly from your customer. Once paid, you receive the remaining balance minus a factoring fee.

How Invoice Factoring Works

Issue an invoice to your customer for goods or services delivered.
Sell the invoice to a factoring company and receive 70–90% of its value upfront.
Your customer pays the factoring company at the original due date.
You receive the remaining balance, minus the factoring fee.

Invoice Factoring vs FundTap Invoice Financing

Traditional invoice factoring means the factoring company chases your customers for payment, which can strain client relationships. FundTap works differently.

With FundTap, you connect your accounting software (Xero, MYOB, QuickBooks, or Reckon), select which invoices to fund, and receive cash within 2 hours of approval. Repayment is automated when your customer pays, you stay in control.

No minimum volumes or lock-in contracts
Funding within 2 hours on approved invoices
Simple, transparent fees, no hidden charges
Your customer relationships stay with you

Learn more about 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.

Which industries use invoice factoring?

Good fit: Manufacturing, wholesale distribution, logistics, staffing, construction, and professional services, any B2B business with invoice payment terms of 30–90 days.
Less suitable: Retail, B2C companies, or businesses with very low margins where factoring fees significantly impact profitability.

Invoice factoring vs invoice financing, what's the difference?

Invoice factoring: You sell your invoices. The factoring company collects payment from your customers directly, they know a third party is involved.

Invoice financing (FundTap's approach): You borrow against your invoices but remain in control of collections. Your customers pay you as normal. Faster, more confidential, and more flexible.

What are the pros and cons of invoice factoring?

Pros: Immediate cashflow, no debt added to your balance sheet, collections managed for you.
Cons: The factoring company contacts your customers directly, may require minimum volume commitments, fees can be higher than invoice financing alternatives like FundTap.

Frequently Asked Questions

What is invoice factoring?

Invoice factoring is a financing arrangement where a business sells its unpaid invoices to a factoring company for immediate cash, typically 70–90% of the invoice value upfront. The factoring company collects payment from your customer and returns the remaining balance minus a fee.

How does invoice factoring work in Australia?

In Australia, invoice factoring works the same way as globally: you sell invoices to a factoring company, receive cash upfront, and the factor collects from your customers. With FundTap, Australian businesses can access funds within 2 hours of approval by connecting Xero, MYOB, QuickBooks, or Reckon.

What is the difference between invoice factoring and FundTap invoice financing?

Invoice factoring involves selling invoices and transferring collections to a third party, which can affect customer relationships. FundTap provides funding against your invoices while you retain control of customer relationships. There are no lock-ins, no minimum volumes, and repayment is automated.

Is invoice factoring a loan?

Not a traditional loan. Invoice factoring is the sale of an invoice you have already earned, so there is no fixed repayment schedule to carry. This is one reason many businesses prefer it over traditional loans.

How much does invoice factoring cost?

Invoice factoring fees typically range from 1% to 5% of the invoice value, depending on the factoring company, invoice volume, and customer creditworthiness. FundTap charges simple, transparent fees with no hidden costs.

How quickly can I access funds through invoice factoring?

Traditional factoring can take 24–48 hours. With FundTap, approved invoices are funded within 2 hours, straight from your accounting software.

Can I choose which invoices to factor?

With FundTap, yes. You select exactly which invoices to fund with no obligation to factor your entire debtor book. Traditional factoring companies may require you to factor all invoices.

How FundTap’s Invoice Factoring works

Connect Your Accounting Software

Select Your Invoice(s)

Receive Cash Within 2 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 Factoring

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An In-Depth Guide To Invoice Factoring