The Cheapest Way to Fund Unpaid Invoices in Australia
By FundTap Team ·14 Apr 2026
The cheapest way to fund unpaid invoices depends on how much you need, how often, and for how long. For a one-off gap, an overdraft may be cheapest. For ongoing working capital tied to invoices, on-demand invoice finance often costs less than it first looks, once you count the hidden costs of the alternatives.
Last reviewed 21 August 2026
The real cost of waiting for payment
The most overlooked cost is doing nothing. When cash is locked in unpaid invoices you may:
- Miss early-payment discounts from suppliers
- Delay hiring or turn down work you can't fund
- Pay late fees on your own bills
- Spend time chasing payment instead of running the business
Australian businesses routinely wait 30–90 days to be paid, the cost of that wait is real even though it never appears on an invoice.
Comparing your options
The cheapest option is the one that matches how you actually need to use it.
| Option | Typical cost | Pros | Cons |
|---|---|---|---|
| Business overdraft | 5–15% p.a. + annual facility fee ($200–$500+) | Flexible, instant within limit | Fixed limit, can be cut by the bank, may need security |
| Business loan | 6–25% p.a. depending on provider/security | Lump sum for a specific need | Creates debt, fixed repayments regardless of cash position, slow approval |
| Invoice factoring | 1–5% per month + service fees + possible minimums | No property security, collections handled | Customer notification, whole-ledger, lock-in |
| On-demand invoice finance (FundTap) | Single fee from 4% per invoice | No new debt, no lock-in, confidential, funded same day | Only works if you have B2B invoices |
"People compare the headline percentage and stop there. The real question is what you pay across a year of actual use. A facility with no fees when you're not using it usually beats a cheaper-looking rate that bills you every month regardless."
Matt Peacey, Founder & CEO, FundTap
How to work out the true cost
Compare cost per dollar of funding, per day, not the headline rate. A 4% fee on a $10,000 invoice paid in 30 days is $400. Annualised that looks like roughly 48% p.a., but that framing is misleading, because:
- You only pay when you use it, there's no ongoing cost when you don't need funding
- There are no annual fees, setup fees, or minimums
- It doesn't consume your borrowing capacity with the banks
- The fee covers the whole service, no separate interest or admin charges
FundTap's average advance runs about $32K over roughly 33 days (FundTap data, 2026), so for most users the real cost is a single transparent fee on the invoices they actually choose to fund.
The bottom line
The cheapest option is the one that fits your actual pattern of need. For businesses with regular invoicing and slow-paying customers, on-demand invoice finance is often the most cost-effective once you account for flexibility, zero lock-in, and no debt impact. FundTap's selective model also keeps risk low for the business and its customers alike.
Frequently asked questions
What is the cheapest way to fund unpaid invoices?
Usually the option you pay for only when you use it. Ongoing agreements with monthly fees and minimum volumes charge you in quiet months too. FundTap charges from 4% per invoice, quoted upfront before you commit, with no setup, monthly or exit fees.
Is invoice finance cheaper than a business loan?
For a short gap it often is, because you pay for days rather than years. A loan charges interest across its whole term whether you need the money or not. Compare the actual dollar cost for the time you need the money, not the headline rate.
How much does it cost to fund a $10,000 invoice?
From 4%, so from $400 on a $10,000 invoice, plus a daily rate for the funding period. The exact figure for that invoice is shown before you confirm, so you decide with the real number in front of you.
Why does invoice finance look expensive as an annual rate?
Because an annual rate assumes you hold the money for a year. Funding one invoice for a few weeks is not a year of borrowing, so annualising it makes a small real cost look large. Compare the dollar fee for the days you actually need.
Are there hidden fees with invoice finance?
Not with FundTap. The fee is quoted upfront before you commit, and there are no setup fees, monthly fees or exit fees. Higher base fees apply to construction businesses and to businesses without connected accounting software, and those are quoted upfront in the same way.
Does invoice finance affect my ability to borrow from the bank?
Funding an invoice is not a new loan, so it does not add borrowing. Whether it affects a future application depends on your bank and your own circumstances, so it is worth asking them directly. FundTap has no lock-in, so you can stop at any time.
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