TL;DR: The best funding options for small businesses in Australia and New Zealand are bank loans, overdrafts, invoice funding, equipment finance, and alternative lenders. The right one depends on how fast you need funds, whether you invoice customers, and how much flexibility you need. Businesses that invoice on terms often prefer invoice funding because it unlocks cash already earned without long-term debt.
What are small business funding options?
Funding options are the financial solutions a business uses to access money for operations, growth, or the gap between issuing invoices and getting paid. They range from traditional bank lending to specialist and asset-based facilities that use assets like invoices or equipment as security.
The main funding options
- Bank business loans, fixed repayment schedules, lower rates, slower approval.
- Business overdrafts, flexible credit attached to your bank account.
- Invoice funding, funding secured against unpaid customer invoices.
- Alternative business lenders, online lenders with faster approval, short-term funding.
- Equipment finance, funding to buy vehicles or equipment.
- Business credit cards, short-term revolving credit for operating spend.
How the options compare
| Option | Best for | Pros | Cons |
|---|
| Bank loan | Long-term investment | Lower rates, predictable repayments | Slow approval, strict criteria, often needs property security |
| Overdraft | Short-term buffer | Flexible, pay interest only on what you use | Small limits, can be reduced, often secured against property |
| Invoice funding | B2B businesses invoicing on terms | Unlocks cash in invoices, grows with sales, fast, no long-term loan | Only available if you invoice other businesses |
| Alternative lender | Fast short-term cash | Quick approval, fewer hurdles | Higher cost, shorter terms |
| Equipment finance | Buying assets | Spreads asset cost, asset is the security | Tied to the specific asset only |
| Credit card | Small operating spend | Convenient, widely accepted | High interest if not cleared monthly |
"Most owners default to 'go to the bank' because it's the option they know. But the best funding is the one that matches the problem. If your cash is stuck in invoices, borrowing against the business is the long way round, funding the invoice itself is faster and doesn't add debt you have to service."
Shane, Head of Growth, FundTap
What is invoice funding?
Invoice funding lets companies access money tied up in unpaid invoices. Instead of waiting 30–90 days, a provider advances against the invoice value and releases the balance when the customer pays. Because it's linked to invoices, the available funding tends to grow as the business generates more sales. It suits B2B businesses invoicing customers on terms.
Why small businesses need funding
Small businesses regularly face a timing gap between when expenses fall due and when invoices are paid. Funding helps cover payroll and suppliers, manage seasonal demand, take on larger contracts, and invest in growth, without waiting for customers to settle.
Where FundTap fits
If your cash is tied up in unpaid invoices, FundTap is invoice funding built for the AU/NZ market: choose which invoices to fund, pay a single fee from 4% with no lock-in, and access an advance in hours (median first fund: 3 days from sign-up; FundTap data, 2026). The selective model keeps risk low, with a 0.71% loss rate (FundTap, BNZ presentation 2025).
See how FundTap works → Rated 5★ on Google (117 reviews) · 4.9★ on the Xero App Marketplace (107 reviews).
Frequently asked questions
What are the best funding options for a small business?
Bank loans, overdrafts, invoice funding, equipment finance, alternative lenders, and credit cards. The best fit depends on speed, whether you invoice customers, and how much flexibility you need.
What's the fastest way to get business funding?
Alternative lenders and invoice funding are typically fastest. With FundTap, funds arrive in hours and the median time from sign-up to first fund is 3 days.
What funding suits a business that invoices on terms?
Invoice funding, it unlocks cash already earned without adding long-term debt, and the available funding grows with your sales.
Do I need property security for business funding?
Bank loans and overdrafts often require it; invoice funding is secured against the invoices themselves, so it usually doesn't.
What's the difference between a bank loan and invoice funding?
A loan is long-term debt based on your credit profile with fixed repayments. Invoice funding is short-term, tied to specific invoices, and settles when your customer pays.
Which funding option is cheapest?
Bank loans usually have the lowest headline rate but the slowest, strictest approval. For short-term cash gaps, a single invoice-funding fee can work out cheaper than carrying ongoing debt, compare total cost, not just the rate.
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