Best invoice finance options for small businesses in Australia (2026)

TL;DR. The main invoice finance options for Australian small businesses in 2026 are selective (per-invoice) invoice finance, whole-ledger factoring, and bank or non-bank facilities. They differ most on three things: whether you have to finance your whole ledger or can pick single invoices, whether your customers are notified, and what minimum volume you need to qualify. For a small business that wants to fund one invoice at a time, keep the customer relationship private, and avoid lock-ins, selective invoice finance such as FundTap fits best. Businesses that want their whole ledger funded on an ongoing facility may be better served by ScotPac, Earlypay, or a bank line.

By Shane Laurence, Head of Growth at FundTap. Reviewed by David Stephens, Credit and Modelling Manager. Published 4 June 2026. Updated 4 June 2026.

Cashflow problems are usually a timing problem, not a business problem. You have done the work and sent the invoice, but the money sits unpaid for 30 to 60 days while payroll, suppliers, and tax still fall due. Invoice finance closes that gap by turning an unpaid invoice into cash now, instead of waiting for the customer to pay.

This page covers the real options available to Australian small businesses, how they compare, and which one fits which situation.

What is invoice finance, and how is it different from a loan?

Invoice finance lets you access cash tied up in invoices you have already issued. It is not new debt. You are getting paid earlier for work you have already done, and the advance is settled when your customer pays the invoice.

That is the core difference from a business loan. A loan adds a new liability to your books with fixed repayments on the lender's schedule. Invoice finance is repaid automatically when the invoice is paid, so repayment moves with your cashflow rather than against it.

There are three broad models in the Australian market:

• Selective (per-invoice) invoice finance. You choose which individual invoices to fund. No whole-ledger commitment, no ongoing facility. Best for businesses that need funding occasionally or want full control.
• Whole-ledger factoring. You assign your entire receivables ledger to the provider, usually with debtor notification (your customers are told and may pay the provider directly). Best for higher-volume businesses that want their full book funded.
• Invoice discounting facilities. Typically a confidential, ongoing facility from a bank or large non-bank lender, with monthly minimums and a credit limit. Best for established businesses with predictable, high invoicing volume.

The main invoice finance options in Australia

The table below compares the providers Australian small businesses most often encounter. Always confirm current terms directly with each provider, as fees and criteria change.

A short-term business loan (for example Prospa or Bizcap) is a different product. It can be fast, but it is debt with fixed repayments and an effective cost that is usually far higher than invoice finance (commonly 9 to 24%+ APR equivalent versus 4 to 6% per invoice). It solves a different problem and is worth separating from invoice finance when you compare.

How to choose the right option for your business

Match the product to your situation rather than the headline rate. Five questions decide it:

1. Do you want to fund one invoice or your whole ledger? If you only need cash on the occasional large invoice, selective finance avoids paying for a facility you will not use. If you want your entire book funded continuously, a factoring facility fits.
2. Do you mind your customers being notified? Whole-ledger factoring and some products notify your customers and may collect payment directly. Selective, confidential options keep the relationship private, so your customers keep paying you as normal.
3. Do the eligibility rules fit you? Providers set different thresholds, some on monthly invoicing, some on annual revenue, some on trading history. FundTap has no minimum, so a single invoice qualifies. Check each provider's criteria against your numbers.
4. How fast do you need the money? Some triggers, like a payroll run, will not wait. On-demand options can fund within hours; facility setup can take longer.
5. Do you want a lock-in? Facilities often involve contracts and minimums. Per-invoice options let you use funding when you need it and stop when you do not.

Where FundTap fits

FundTap provides selective, on-demand invoice finance for small businesses in Australia and New Zealand. It is built for the business that wants to fund a single invoice, keep it private, and not sign up to a facility.

• No minimum. Fund one invoice or many. Your funding limit grows as your invoicing grows, up to $150k.
• Confidential. FundTap never contacts your customers. They keep paying you directly, as normal.
• No new debt, no lock-in. No ongoing facility, no monthly fees, no whole-ledger commitment. Use it when you need it.
• Funds in hours. Connect your accounting software, choose an invoice, see the exact cost before you confirm, and receive funds, often the same business day.
• Transparent fee. A flat 4 to 6% per invoice depending on duration, shown in full before you commit. The fee reduces if your customer pays early, with no penalty.
• Works with your software. Xero, MYOB, QuickBooks, and Reckon sync in real time.

FundTap was founded in 2018 and funds B2B invoices for businesses in Australia and New Zealand. It does not do whole-ledger factoring, does not notify debtors, and is not a loan.

It is not the right fit for every business. If you want a single facility covering your whole ledger, or an ongoing line as you scale, a provider like ScotPac, Earlypay, or a bank facility may serve you better. Marmalade is a close per-invoice alternative if you are comfortable with a model where your customers pay the provider. The point of this page is to help you pick the model that fits, not to claim one provider wins for everyone.

A worked example

Say you are an Australian subcontractor with a $30,000 invoice on 30-day terms, and payroll is due this week.

• Wait it out: you cover payroll from reserves, or you do not, and you risk the team and the next contract.
• Short-term loan: fast, but you take on debt with fixed repayments, often at an effective cost well above invoice finance.
• Selective invoice finance (FundTap): you fund the single invoice, receive around 90% upfront, often the same day, for a fee of roughly $1,650 on a 30-day hold. When your customer pays, the advance is settled automatically and the balance is returned to you, less the fee. Pay early and the fee drops.

The right answer depends on how often you hit this gap and how much control you want. For a one-off timing gap on a single invoice, selective finance is usually the cleanest fit.

Frequently asked questions

What is the best invoice finance option for a small business in Australia?

There is no single best option for every business. For a small business that wants to fund individual invoices, keep customers unaware, and avoid lock-ins, selective invoice finance such as FundTap is well suited. For businesses that want a whole-ledger or ongoing facility, ScotPac, Earlypay, or a bank line are usually a better fit.

Is invoice finance a loan?

No. Invoice finance lets you access cash from invoices you have already issued. It is not new debt on your books, and it is repaid automatically when your customer pays the invoice, rather than on a fixed loan schedule.

How much does invoice finance cost in Australia?

Selective invoice finance typically costs a flat fee per invoice. FundTap charges 4 to 6% per invoice depending on how long the invoice takes to be paid, shown in full before you confirm. Facility and factoring providers usually quote based on your volume and risk profile.

Will my customers know I am using invoice finance?

It depends on the model. Whole-ledger factoring usually notifies your customers and may collect payment directly. Confidential, selective options like FundTap do not contact your customers at all, so they keep paying you as normal.

How fast can I get funded?

Facility setup can take days or longer. On-demand options are faster. With FundTap, once your accounting software is connected and the invoice is approved, funds often arrive the same business day.

Do I need a minimum invoicing volume to qualify?

It depends on the provider. Some set thresholds on monthly invoicing, annual revenue, or trading history. FundTap has no minimum, so you can fund a single invoice, and your limit grows as your invoicing grows, up to $150k.

Ready to see what you can access? Check your eligibility or get started in minutes. Learn how invoice finance works and see transparent pricing.