Invoice finance glossary

Plain-English definitions of the terms you’ll come across when researching invoice finance.

Invoice finance

A way for businesses to access money from invoices they’ve already raised, before their customers pay. Fundtap is a form of invoice finance.

Invoice factoring

A type of invoice finance where you sell your invoices to a third party (the “factor”) who then collects payment from your customers directly. Your customers are notified and pay the factor, not you.

Invoice discounting

A confidential form of invoice finance where your customers don’t know you’re using it. Similar to what Fundtap provides.

Selective invoice finance

Invoice finance where you choose specific invoices to fund, rather than committing your entire customer ledger. Fundtap is selective.

Whole-ledger finance

Invoice finance where you must fund all invoices (or all invoices from specified clients), rather than choosing individual ones.

Advance rate

The percentage of the invoice value paid to you upfront. Fundtap pays up to 90%.

Recourse

If your customer doesn’t pay the invoice, you (not the finance provider) are responsible for repaying the advance. Fundtap operates on a recourse basis, keeping fees lower.

Lock-in

A minimum contract term. Fundtap has no lock-in — you can stop at any time with no exit fee.

Credit assessment

The process of evaluating creditworthiness. Fundtap’s assessment focuses on your customers’ creditworthiness, not your own.

B2B

Business-to-business. Invoice finance works for businesses that invoice other businesses or government, not individuals.

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