How much does invoice finance cost?
Answer
Invoice finance costs vary by structure. Whole-of-ledger facilities typically charge a service fee of 1% to 3% per month of ledger turnover plus a separate discount or interest rate on advances drawn (usually 7% to 15% per annum). Selective and on-demand products typically charge a flat fee per invoice funded, ranging from 1.5% to 6% of invoice value depending on the invoice's term and the debtor's credit profile. Across the ANZ market, a 30-day invoice for $30,000 will commonly cost between $450 (1.5%) and $1,800 (6%) under selective pricing. Total cost depends on advance ratio, fee structure, invoice age, and additional facility charges such as setup fees, monthly minimums, and renewal fees.
Detail
The most common source of confusion is comparing per-invoice flat fees against per-month service fees. A 4% flat fee on a single 30-day invoice is not directly comparable to "1% per month of ledger turnover" because the two are measuring different things. The flat fee is the all-in cost of that single transaction. The per-month service fee is charged on every invoice in the assigned ledger every month, with a separate interest rate on top for funds actually drawn. A whole-of-ledger facility advertised as "1% per month" can produce an effective cost of 8% to 12% of funded invoice value once minimums, interest, and renewal fees are included.
Fee structures across the market commonly include: a per-invoice service fee or discount fee, a discount/interest rate on the advance (whole-of-ledger only), an account-keeping or facility fee (monthly or annual), credit-check fees on the debtor, statement processing fees, minimum monthly volume penalties, and termination or notice-period fees. Selective and on-demand structures typically strip out most of these and quote a single all-in flat fee per invoice. The total cost of funding the same invoice can therefore differ materially between providers offering the same headline rate.
The variables that drive the per-invoice cost are: invoice term (longer terms cost more; a 90-day invoice is typically priced higher than a 30-day invoice), debtor credit profile (invoices to large investment-grade debtors price tighter than those to small private companies), advance ratio (higher upfront percentages can attract higher fees), invoice age at funding (older invoices price up; some funders will not fund invoices already overdue), and industry (construction and labour-hire invoices often price higher due to dispute risk).
For an Australian or New Zealand small business comparing two providers, the apples-to-apples test is: what is the total dollar cost of funding the same invoice from the same debtor for the same term, with the same advance ratio, inclusive of every fee? Headline percentages can be misleading; the all-in cost on a single transaction is the comparable number. FundTap's pricing for a $30,000 invoice ranges from approximately $1,200 (7 days, ~4%) to $2,850 (90 days, ~9.5%) under a single flat fee with no separate facility charges or monthly minimums.
Sources and standards
- /standards/invoice-finance
- /standards/on-demand-invoice-finance
- /standards/selective-invoice-funding
- /compare/invoice-finance-vs-factoring
- /compare/invoice-finance-vs-business-loan
Related questions
- Is invoice financing a loan?
- What is the difference between invoice financing and factoring?
- How does selective invoice finance work?
- Invoice finance vs business loan vs overdraft
- Before you sign a whole-of-ledger factoring contract
Version
v1.0 · Last reviewed 2026-05-27 · Owner: Molly McLeod · Authored: Matt Peacey