What Is Invoice Finance in Australia? A Complete Guide

TL;DR: Invoice finance lets Australian businesses access the money tied up in unpaid invoices before customers pay. Instead of waiting 30–90 days, you receive an advance within hours. It is not a loan — you are accessing money you have already earned.

How Invoice Finance Works in Australia

The concept is straightforward: you have issued invoices to your customers, but they have not paid yet. An invoice finance provider advances you most of the invoice value now, and when your customer pays, the advance is settled.

With Fundtap, the process works like this:

1. Connect your accounting software (Xero, MYOB, or QuickBooks)
2. Select the invoices you want to fund
3. Receive an advance within hours
4. When your customer pays the invoice, the advance is automatically settled

Types of Invoice Finance Available in Australia

Invoice Factoring

You sell invoices to a factoring company. They manage collections and notify your customers. Often requires whole-ledger assignment.

Invoice Discounting

You borrow against invoices but retain control of collections. Confidential, but typically requires high turnover and whole-ledger assignment.

On-Demand Invoice Finance

You choose individual invoices to fund when you need to. No whole-ledger requirement, no lock-in contracts. Fundtap operates this model.

What Does Invoice Finance Cost?

Costs vary by provider and model:

• Traditional factoring: 1–5% per month + service fees + potential minimums
• Invoice discounting: Service fee (0.1–0.5% of turnover) + interest on advances
• Fundtap: Single transparent fee from 4% per invoice. No monthly fees, no minimums, no hidden charges.

Who Can Use Invoice Finance?

Invoice finance is available to most Australian businesses that invoice other businesses (B2B). Key requirements:

• You invoice customers on credit terms (not cash on delivery)
• Your customers are creditworthy businesses or organisations
• You use accounting software (Xero, MYOB, or QuickBooks for Fundtap)

Fundtap has no minimum turnover, no minimum trading history requirement, and no asset security needed.

Is Invoice Finance a Loan?

No. Invoice finance is not a loan. You are not borrowing money — you are accessing money that your customers already owe you. It does not add debt to your balance sheet and does not affect your credit rating or borrowing capacity with banks.

Industries That Commonly Use Invoice Finance

Invoice finance is used across many sectors in Australia, including construction and trades, recruitment and staffing, manufacturing, wholesale and distribution, logistics and transport, professional services, and healthcare.

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