Invoice finance (debtor finance)
Waiting 60 days on invoices while your bills won't wait?
Invoice finance releases cash tied up in your unpaid invoices, for businesses whose customers pay on long terms.
The basics
What is invoice finance?
Invoice finance, also called debtor finance in Australia, advances you most of an unpaid invoice's value now, rather than waiting for your customer to pay. The provider typically advances around 70 to 95% upfront; when your customer pays, you receive the balance minus the provider's fees.
It suits B2B businesses that sell on credit terms: the work is done and the invoice is issued, but the cash is 30, 60 or 90 days away. Invoice finance closes that gap so payroll and suppliers are not waiting on a slow payer.
How does invoice finance work?
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Invoice your customer as normal
The facility sits over your receivables ledger (or selected invoices).
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Draw against the invoice
The provider advances an agreed percentage, commonly around 70 to 95%, usually within 24 to 48 hours once the facility is running.
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Customer pays; you get the rest
The provider deducts its fees and releases the balance to you.
Worked example (illustrative only: not a quote or offer): You issue a $50,000 invoice on 60-day terms. At an 80% advance rate, roughly $40,000 lands in your account within a day or two of drawdown. Your customer pays the $50,000 on day 60; the provider deducts its fees and releases the remaining balance to you. Your cash arrived when the work finished: not two months later.
Invoice factoring vs invoice discounting: what's the difference?
Both advance cash against invoices. The difference is who runs collections and who knows about it.
| Feature | Factoring | Discounting |
|---|---|---|
| Who chases payment | The provider | You |
| Customers aware? | Usually yes | Usually no (confidential) |
| Typically suits | Smaller firms, lean admin | Established firms, own credit control |
| Admin load | Lower | Stays with you |
Cost
What does invoice finance cost?
Pricing usually has two parts, on top of an advance rate that commonly sits around 70 to 95% depending on your industry, debtor quality and invoice profile.
Discount fee
An interest-like charge on the funds advanced, for the time they are outstanding.
Service fee
For running the facility. Higher for factoring, where the provider manages collections.
What moves the price: the strength and concentration of your debtors (one customer owing 80% of the ledger costs more than ten owing 10% each), invoice volumes, payment terms, and how long customers actually take to pay. These are market norms, not our prices: we compare actual facility quotes side by side so the total cost is visible before you commit.
Who is invoice finance right for?
B2B businesses that invoice other businesses on trade credit terms (30 to 90 days): commonly transport operators, wholesalers, labour hire firms, manufacturers and construction subcontractors. If slow payers are the reason you're tight on cash, this facility attacks the problem directly, and the available funding grows with your sales.
Mostly B2C or paid on the spot? Invoice finance won't fit: a business line of credit is usually the better working-capital tool. Need to pay suppliers before you can invoice anyone? That's the buy-side gap trade finance covers.
Pros and cons
Pros
- Cash within days of invoicing instead of 30 to 90 days after
- Funding capacity grows automatically with your sales ledger
- No property security: the receivables underpin the facility
- Can smooth seasonal or lumpy cash flow permanently, not just once
Cons
- B2B only; retail/cash businesses generally don't qualify
- Concentration limits: a ledger dominated by one debtor reduces what you can draw
- Factoring means your customers deal with the provider: not every business wants that
We'll tell you straight if term debt or a line of credit is the cheaper fix for your situation.
Lenders on our panel
Industries
Industries we help fund
Whatever you do, the finance that fits depends on how your business actually trades. These are some of the industries we arrange funding for, each with its own guide.
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Agriculture & farming
Machinery, utes, inputs bought a season ahead, and repayments that can follow the harvest.
Agriculture finance -
Hospitality & cafés
Fit-outs, commercial kitchen gear, stock before the rush, and the quiet months in between.
Hospitality finance -
Retail & e-commerce
Buying stock before the season sells, fit-outs, and bridging supplier terms against your sales.
Retail finance -
Trades & construction
Tools, vehicles, materials up front, and bridging the gap between doing the work and being paid.
Trades & construction finance -
Health & allied health
Practice fit-outs, clinical equipment, hiring, and opening a second set of rooms.
Health finance -
Professional services
Hiring ahead of billings, office and technology, and bridging project-based invoicing.
Professional services finance -
Transport & logistics
Trucks and trailers, running costs, and carrying the gap between delivery and payment.
Transport & logistics finance
Customer stories
What business owners say about 121 Brokers
Testimonials reflect individual customers' experiences. Outcomes vary and depend on the lender and your circumstances.
121 Brokers Pty Ltd (ABN 37 674 323 712) is a finance broker, not a lender. We arrange finance through third-party lenders. Approval, interest rates, fees, timing and the funds themselves are set and provided by the lender, not by 121 Brokers.
FAQs
Invoice finance questions, answered straight
How quickly can I access funds from invoice finance?
Facilities are commonly established within days to around two weeks, depending on the provider and your ledger. Once running, drawdowns against new invoices typically land in 24 to 48 hours. Timings vary by provider and are subject to assessment.
Will my customers know I'm using invoice finance?
With factoring, usually yes: the provider manages collections and receives payments. With confidential invoice discounting, generally no: you keep running collections in your own name. If confidentiality matters to you, we'll shortlist discounting facilities.
What percentage of my invoice value can I get upfront?
Commonly around 70 to 95%, depending on the facility, your industry, and the quality and spread of your debtors. The balance, minus the provider's fees, is released when your customer pays the invoice.
Is invoice finance a loan?
Not in the traditional sense: it's finance advanced against your receivables rather than a fixed lump-sum term loan. The practical difference: capacity scales with your sales ledger, and repayment happens when your customers pay their invoices.
What businesses qualify?
B2B businesses invoicing other businesses on credit terms (typically 30 to 90 days) with a reasonably reliable debtor book. B2C and cash-at-point-of-sale businesses generally don't qualify: a line of credit usually fits better there.
Is invoice finance more expensive than a bank loan?
Often, yes: it typically prices above secured term debt because you're buying speed, flexibility and capacity that grows with sales. Total cost depends on advance rate, fees and how long your customers take to pay. We put the comparison in writing before you choose.
Your invoices are an asset. Put them to work.
Tell us your average monthly invoicing and typical payment terms: we'll show you what a facility could release, across providers.