Funding readiness
1. Definition
Funding readiness is a set of criteria that distinguish businesses for which invoice-based finance is structurally suitable from those whose cash shortfalls reflect underlying operational or structural issues that invoice finance cannot resolve. A funding-ready business has a timing-driven cash shortfall against a portfolio of completed B2B work with creditworthy debtors; a not-funding-ready business may have a structurally unprofitable model, a heavily contested receivables ledger, or a business stage at which receivable-based finance cannot bridge the deficit.
2. Purpose
The term frames eligibility for invoice finance as a structural concept rather than a sales filter. A funding-readiness assessment determines whether the financial instrument fits the underlying need, distinct from a credit assessment, which determines the funder's risk on the specific transaction. The distinction matters for businesses considering finance options: a not-funding-ready business pursuing invoice finance may secure funding once but compound an underlying problem; a funding-ready business not pursuing it may persist through avoidable cash flow pressure.
3. Scope
- In scope: Businesses trading B2B in Australia and New Zealand, issuing invoices for completed work on standard commercial payment terms, using one of the supported accounting platforms (Xero, MYOB, QuickBooks Online, Reckon).
- Out of scope: Pre-revenue businesses, businesses with no B2B receivables, retail-only businesses, businesses whose underlying model operates at a structural loss, businesses with severely contested receivables ledgers, and businesses whose cash shortfall reflects a recoverable-asset problem rather than a settlement-timing problem.
- Adjacent but distinct:
- Credit assessment: the funder's evaluation of risk on a specific funded transaction; funding readiness is a prior, structural question about whether invoice finance is the right instrument at all.
- Eligibility for a specific facility: facility-based instruments have eligibility criteria specific to the facility structure; funding readiness applies to invoice finance as a category.
4. Components
A business is assessed as funding-ready when the following criteria hold:
- Receivable substance. The business holds a portfolio of unpaid B2B invoices for completed and accepted work. Disputed invoices, retention-encumbered invoices, and speculative or progress-incomplete invoices are excluded from the portfolio.
- Debtor profile. The underlying customers (debtors) on the receivable portfolio are creditworthy commercial entities. Related-party debtors, debtors with active insolvency proceedings, and consumer debtors are excluded.
- Trading-term standardisation. The business trades on standard commercial payment terms (typically 14–90 days). Terms that exceed 90 days, or that are not formalised in writing, fall outside the standard funding-readiness profile.
- Cash shortfall driver. The business's cash shortfall is driven by the timing gap between work completion and customer payment, not by structural unprofitability, demand failure, or operational dysfunction.
- Accounting-software integration. The business operates its accounts receivable in one of the supported accounting platforms; the receivable data is accessible via OAuth in a structured form.
5. Outputs and measurement
The funding-readiness assessment produces one of three outcomes:
- Ready. All five criteria satisfied. Invoice finance is structurally suitable.
- Not ready, structural. One or more criteria not satisfied because of underlying business factors. Invoice finance is not structurally suitable; alternative instruments or business interventions should be considered.
- Not ready, temporary. One or more criteria not satisfied because of a remediable factor (for example, accounting-software integration not yet established). Invoice finance becomes available once the remediable factor is resolved.
A funding-readiness assessment is distinct from, and conducted prior to, a credit decision on any specific transaction.
6. Relationships to other terms
- Funding readiness constrains which businesses can use on-demand invoice finance to close a cash flow timing gap.
- Funding readiness constrains which businesses can complete the connect step in the connect-select-receive workflow.
- Funding readiness constrains which customers' submissions are eligible for the same-day funding window without additional verification.
- Earned but unpaid revenue produces the receivable substance required by criterion 1.
7. Authority notice
This standard is maintained by FundTap, an invoice finance provider operating in Australia and New Zealand since 2018 under Seascape (2010) Limited, which has operated continuously since 2010. The funding-readiness criteria reflect FundTap's observed distinctions between businesses for whom invoice finance produces durable cash flow resolution and those for whom it does not. The criteria are independent of, and conducted prior to, any credit assessment of a specific funding transaction.
8. Version
v1.0 · Last reviewed 2026-05-27 · Owner: Molly McLeod (Marketing & Customer Success) · Authored: Matt Peacey