Invoice Finance

Invoice finance is a form of business funding that allows eligible businesses to access cash tied up in unpaid customer invoices. Instead of waiting 30, 60 or 90 days for customers to pay, you can access a percentage of eligible invoices earlier and use the funds to support your business cash flow.

Your outstanding eligible invoices are used to support a revolving funding facility. As you issue invoices to approved customers, you can access an agreed percentage of their value before the customer pays. When the invoice is paid, the amount advanced and applicable fees or interest are deducted, with the remaining balance made available to you.

Depending on the lender, facility and quality of your receivables, businesses may be able to access a significant percentage of eligible invoice values upfront. Advance rates vary, so we compare suitable invoice finance facilities to find a structure that works for your business.

Your available facility generally depends on the value and quality of your eligible outstanding invoices, customer base, turnover, trading history and lender criteria. Because funding can increase as your sales and receivables grow, invoice finance can provide a scalable source of working capital.

Timing depends on the complexity of your business, debtor ledger, customers and the facility required. Straightforward applications can often be assessed quickly once the lender has received the required information. Once established, eligible invoices can provide ongoing access to working capital without applying for a new business loan each time cash is needed.

Invoice finance pricing varies depending on your turnover, facility size, customer quality, invoice terms and the type of facility. Costs may include interest or a funding charge on the amount advanced, as well as administration, service or facility fees. We compare the overall cost and structure across suitable options rather than focusing on one advertised rate.

Not necessarily. Invoice finance is primarily supported by eligible business receivables rather than residential or commercial property. However, security arrangements and guarantees vary between lenders and facilities.

Invoice finance is generally best suited to businesses that sell goods or services to other businesses on credit terms and issue invoices that are paid at a later date. It can work particularly well for industries where 30, 60 or 90-day payment terms create cash-flow pressure.

Potentially. Eligibility depends on your business structure, turnover, customers, invoices and the lender's criteria. Invoice finance can be available to a range of Australian business structures, including eligible sole traders, partnerships, companies and trusts.

Potentially. Because invoice finance is linked to eligible receivables and the quality of your customers, some newer businesses may be considered even without a long trading history. Eligibility will depend on factors such as your invoices, customers, turnover and overall business circumstances.

Potentially. Invoice finance can sometimes be available where traditional business lending is more difficult because the lender also considers the quality of your invoices and customers. Your credit history and financial position can still influence approval, pricing and facility terms.

Not always. Requirements vary depending on the facility and lender. You may be asked for information such as your debtor ledger, aged receivables report, business bank statements, accounting records, financial statements and details about your major customers.

Invoice finance generally applies to eligible unpaid invoices issued for goods or services that have already been supplied. Eligibility can depend on the customer, payment terms, age of the invoice, industry and whether there are disputes or conditions attached to payment.

Yes. That's the purpose of invoice finance. Rather than waiting for an eligible customer invoice to reach its payment date, you can potentially access part of its value earlier and use that money as working capital.

It depends. Invoice finance is generally designed around current eligible receivables rather than significantly overdue or disputed debts. The age of the invoice, customer and reason for non-payment can affect whether it is eligible.

The terms are often used interchangeably. Both generally involve accessing business funding against outstanding customer invoices or your accounts receivable ledger. Specific structures, terminology and features can vary between providers.

Both provide funding against outstanding invoices, but the main difference can be who manages collections. With some invoice finance arrangements, your business continues managing customer payments and collections. With factoring, the finance provider may take a more active role in collecting invoices from customers. The exact structure varies between facilities.

A business loan generally provides a set amount based on your overall business and ability to repay. Invoice finance provides funding linked to eligible unpaid customer invoices. As your sales and receivables increase, the amount of funding available through an invoice finance facility may also increase.

A business line of credit provides access to an approved borrowing limit based on your overall business and lender assessment. Invoice finance is linked more directly to eligible receivables, meaning your available funding can fluctuate as invoices are issued and paid.

Yes. Invoice finance is specifically designed to reduce the delay between issuing an invoice and receiving payment. It can give your business earlier access to money already owed by customers, helping smooth cash flow and reduce pressure caused by long payment terms.

Funds can generally be used for legitimate business purposes, including wages, suppliers, inventory, equipment, tax obligations, operating expenses, new contracts and business growth.

Yes. This is a common use of invoice finance. Instead of waiting for customers to pay outstanding invoices, businesses can access working capital earlier to meet payroll, supplier and other operating expenses.

Yes. Because the facility can grow alongside eligible sales and receivables, invoice finance can help businesses fund larger orders, take on new contracts, purchase additional inventory, hire staff or expand without waiting for existing customers to pay.

It depends on the type of facility. Some invoice finance arrangements are confidential, while others require customers to make payments to an account controlled or nominated by the finance provider. We can take confidentiality and customer communication into account when comparing your options.

That depends on the facility. With some arrangements, your business continues managing customer relationships and collections. With others, the finance provider may manage some or all of the collection process.

Not necessarily. Some facilities operate across your entire eligible debtor ledger, while others may provide greater flexibility over which invoices or customers are funded. The available structure depends on the provider and your business.

This depends on whether the facility is recourse or non-recourse and on the terms of the agreement. Under many recourse arrangements, your business remains responsible if a customer fails to pay. Some facilities may offer protection against certain customer defaults, subject to eligibility, limits and conditions.

Invoice finance is generally an ongoing working capital facility rather than a one-off loan. As your business continues issuing eligible invoices, you may continue accessing funds under the facility, subject to your approved limit and ongoing lender requirements.

Getting an initial quote with Overdrive does not require an upfront credit check. We can assess your requirements and compare suitable invoice finance options before progressing to a formal application. If you choose to proceed, the selected lender may conduct credit enquiries as part of its assessment.

Invoice finance can be particularly useful if your business is profitable and growing but regularly waits weeks or months for customers to pay. It may be less suitable for businesses that primarily sell directly to consumers or receive payment immediately. We compare invoice finance with other working capital options to determine which structure best suits your business.