Best Invoice Finance Rates & Providers - Compare 80+ Lenders
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"Unpaid invoices shouldn't dictate your business's pace. Our LendIQ™ system cuts through the delays by matching you to the most suitable financing invoice from 80+ sources. This means you get fast, reliable access to your own earnings, ensuring stability and empowering growth."
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Your Guide to Australian Invoice Finance and Factoring
This guide provides transparent financing information to give you clarity and confidence. We will explain how invoice financing works, detail the overall costs, and outline the key criteria for this type of debtor finance.
Updated: 02/12/2025
Invoice Factoring by The Numbers
Thousands of Australian companies, particularly in sectors like Civil Construction, Transport, and Wholesale, rely on factoring services to solve cash flow challenges. The data from our platform shows a clear need for faster, more accessible working capital.
- Typical Formal Approval Rate: Close to 90%
- Average Funding Limit : $300,000
- Average Funding Time: 1 to 2 Weeks
- Top User Industries: Civil Construction, Transport, Wholesale
Invoice Finance Eligibility Checklist
Wondering if you can get this funding? Unlike a traditional bank loan, this financial solution looks at the strength of your customer invoices. Here’s what lenders typically require. If you meet these criteria, your chances of approval are high.
- Minimum Trading History : You have an active ABN and have been trading for at least 6 months.
- Minimum Invoices : Your business has a minimum of $1,000 in outstanding invoices per month.
- Your Customers (Debtors) : You issue invoices to other registered Australian businesses (B2B) after the goods or services are provided.
- Your Invoicing System : You use a recognised accounting software like Xero, MYOB, or QuickBooks, which allows for simple integration with the lender.
How Does Invoice Financing & Debtor Finance Work
Invoice financing allows your business to borrow against your accounts receivable and access cash immediately, rather than waiting 30, 60, or 90 days for customers to pay. It is a powerful tool for managing working capital without taking on traditional debt. The process is straightforward and typically involves these features:
- Borrow against invoices from $1,000 to over $1,000,000
- Terms are aligned with your customer payment cycles (usually 30 to 120 days)
- Get an immediate cash advance of up to 90% of the invoice value
- Your customer invoices act as the security for the funding
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- Confidential invoice discounting options are available to protect customer relationships
- Fees are a simple percentage, not compounding interest like many short-term funding options
- The funds can be used for any business purpose, from wages and supplier payments to new inventory
Specialist lenders can also handle complex scenarios that are often deal-breakers for banks. For example, if you do not own property, this is not a barrier as providers in this space are focused on business performance, with an approval rate of close to 90% for clients without property security. Similarly, if you have a managed ATO debt, specialist providers are often comfortable proceeding, with a similar high approval rate.
The Main Fees
The primary charge is the 'factor fee', which is typically between 1.5% and 4.5% of the total invoice value. Your final financing rates depend on the lender's assessment of several key risk factors.
What Impacts Your Factoring Fees and Rates
Understanding what impacts the total cost empowers you to secure more affordable business financing. These factors include your customer's strength (a blue-chip customer can decrease the fee by 5%), the total invoice amount and volume of your invoices, and the agreed payment terms.
Common Questions
Invoice funding is the overarching term. Invoice factoring typically includes a collections service, where the financier manages your sales ledger. 65% of our clients choose this option. Invoice discounting is usually confidential, leaving you in control of customer collections, with 35% of our clients opting for this.
Once an arrangement is approved (which takes 1-2 weeks on average), you can typically draw down funds against an invoice within 24 hours.
No. While financing your whole ledger often results in better rates, 15% of our clients use 'spot factoring' for single invoices, allowing you to choose which invoices to fund.
Not necessarily. Confidential invoice discounting is designed so that your customers are unaware you are using a third-party financier. You maintain full control of the relationship.
For standard assets purchased from a dealership, funding can be arranged in less than 4 hours for well-prepared applicants. More complex scenarios, like private sales or highly specialised equipment, may take 24 to 48 hours.
This funding is a type of business finance that functions differently from a traditional term loan. Instead of taking on new debt, you are accessing the cash value of an existing asset (your unpaid accounts receivable).
3 Ways to Get The Best Deal on Funding
Step 1: Prepare Your Key Documents
For the fastest outcome, have clean PDF copies of your key invoices and an up-to-date 'Aged Receivables' report from your accounting software ready. This demonstrates you are organised and allows for a quicker application process, leading to a more competitive offer.
Step 2: Highlight Your Strongest Customers
Be ready to discuss the strength and length of your relationship with your top clients. A long, positive history with a reputable, 'blue-chip' customer significantly reduces the perceived risk and can directly lead to a better rate from the lender, potentially decreasing the factor fee by 5%.
Step 3: Provide Accurate and Complete Information
Whether applying directly or through a broker, providing accurate information from the start is crucial. This ensures any offer you receive is reliable and will not change later in the process, saving you time and avoiding potential disappointment.
Related Calculators
Invoice Discounting vs Factoring Match The Right Service to Your Goal
Factoring services come in different forms. A finance specialist can help you align the product with your operational goals. If maintaining control over customer relationships is your priority, confidential invoice discounting is likely the best fit. If you prefer to outsource collections, a full-service factoring arrangement may be more suitable.
Feature | Invoice Discounting (Confidential) | Invoice Factoring (Disclosed) |
|---|---|---|
Collections Management | You manage your own collections. | Financier manages collections on your behalf |
Customer Relationship | Your customers are unaware of the financier. | Your customers pay the lender directly. |
Best For.. | Established businesses with strong credit control. (35% of our clients choose this) | Companies wanting to outsource collections. (65% of our clients choose this) |
Frequently Asked Questions
With recourse factoring, you are liable to buy back an invoice if your customer fails to pay. It has lower fees due to the lower risk for the lender. With non-recourse factoring, the provider assumes the risk of non-payment, but the fees are higher.
Yes, it is possible. Because this funding is secured against the quality of your customers' invoices, financiers place more emphasis on your debtors' creditworthiness than your own. A strong sales ledger can help you secure funding even with a blemish on your credit file, as evidenced by our high approval rates for clients with managed ATO debt.
It is popular in industries with long payment terms, such as Civil Construction, Transport, and Wholesale.
This varies by financier. Some may have minimum invoice values, but arrangements can be structured to fund invoices from as little as $1,000 to well over $1,000,000.
Finance providers use a verification process that can include checking the invoice against your accounting software, reviewing the corresponding purchase order or contract, and sometimes making a verification call to your customer's accounts payable department.
Some specialist finance providers offer export or trade finance that allows you to fund invoices from international customers. However, this is a more specialised product than standard domestic invoice financing.
The process depends on your agreement. With invoice discounting, you are still responsible for chasing the payment. With factoring, the provider will manage the collections process. Additional fees may apply for invoices that go significantly beyond their due date.
Most financiers require a minimum trading history of at least 6 months to see a pattern of consistent invoicing and revenue. It is generally not available for brand-new startups with no sales history.
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What Happens After Your Funding Is Approved
Once your funding line is active, the process is simple. You will typically get access to an online funding portal. When you issue a new invoice, you upload the PDF. The provider performs a fast invoice verification, and the agreed-upon advance, on average 80% of the invoice value, is deposited into your business bank account, often within hours for real-time funding access. When your customer pays the full invoice, the provider releases the remaining balance to you, minus their agreed-upon fee.
Andrew Beckett is a finance executive with extensive Fintech expertise. As Head of Broker and Third Party Distribution at Lend, he fostered key partnerships, including COG aggregation and CAFBA. With prior sales roles in various fintech and finance companies, Andrew has been instrumental in transforming Australia's financial market, shaping new lending practices in the commercial lending space.
Andrew Beckett, Head of Broker and Third Party Distribution
Phil Druce leads the company’s technology and operations. With 20 years of experience in technology businesses, Phil has consistently driven growth through strategic planning and execution. Since 2016, he has been dedicated to creating technology-driven products and services at Lend, optimising processes, and delivering outstanding client experiences.
Phil Druce, Chief Operations Officer
Stories From Successful Invoice Finance Funding
Critical Project Funding Secured in Three Days
Client: Brad, an electrical contractor and labour hire provider.
Problem: Brad had just secured a significant new project and needed a facility established within days to fund an incoming invoice. Any delay would mean he couldn't pay his subcontractors on time, jeopardising the project's start.
Solution : We understood the extreme urgency and fast-tracked his application. We successfully established a $100,000 invoice finance limit in just three days. This rapid turnaround meant the facility was active and ready for him to draw down on the moment the invoice was raised, ensuring his subcontractors were paid promptly and the project kicked off without a hitch.
A $1 Million Facility Without Switching Banks
Client: Catherine, a pharmacist with a growing technology consignment business.
Problem: To scale her consignment operation, Catherine needed a substantial capital injection to purchase larger stock orders. However, she was unwilling to go through the disruptive and lengthy process of moving all her complex personal and business banking away from her long-term bank.
Solution : We sourced a specialised non-bank solution, securing Catherine a $1,000,000 facility at rates highly competitive with the major banks . This freed up crucial working capital, allowing her to seize growth opportunities immediately, all without the administrative headache of changing her core banking relationships.
Unlocking $750,000 to Fuel Strategic Growth
Client: Geoff, a commercial builder.
Problem: Geoff had a paid default on his file, making it impossible to secure working capital through traditional lenders. This was a major roadblock, as he had secured lucrative contracts with A-rated clientele and needed to leverage these strong invoices to fund his projects.
Solution : We connected Geoff with a lender who understood his credit history in the context of his strong business pipeline. We successfully secured a combined $750,000 facility ($500k invoice finance, $250k trade finance) . This allowed him to release working capital early, empowering him to deliver on major contracts and pursue further growth.
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