Invoice Finance Calculator
Calculate invoice finance costs and cash flow. Free NZ invoice factoring calculator with current rates, advance percentages, and net funding estimates.
💡 Invoice Finance Tip: Most providers advance 80-90% of invoice value upfront, with the balance paid when your customer pays (minus fees).
Invoice Finance Calculator
Calculate your invoice finance costs and cash flow
Finance Summary
Immediate Cash Advance
$42,500
Total Fees
$1,750
Net Funding
$48,250
Effective Cost
3.5%
APR Equivalent
42.0%
Cash Flow Breakdown
Important: Invoice finance can be expensive when expressed as APR. While convenient for cash flow, consider if a business loan or line of credit might be cheaper for your needs. Always compare total costs, not just advance rates.
Current NZ Invoice Finance Providers (January 2025)
🏦 Major Banks
🚀 Specialist Providers
⚡ Alternative Lenders
How Invoice Finance Works in NZ
1. Issue Invoice
You complete work and issue invoice to your customer as normal (e.g., $50,000 with 30-day terms)
2. Get Advance
Provider advances 80-90% immediately (e.g., $42,500 within 24 hours)
3. Customer Pays
Your customer pays the full invoice to provider at end of payment terms (30 days)
4. Final Settlement
Provider pays you the remaining balance minus fees (e.g., $5,750 after 2.5% discount + 1% service fee)
Types of Invoice Finance
📋 Invoice Factoring
How it works: Provider takes over invoice collection. Customer pays provider directly.
Advance Rate: 80-90% upfront
Cost: 1.5-5% per month
Visibility: Customer knows you're factoring
Best For: Businesses without credit control resources
Most Common: Good for growing businesses that need immediate cash and don't mind customers knowing.
🔒 Invoice Discounting
How it works: You keep control of collections. Customer pays you, you repay provider.
Advance Rate: 80-90% upfront
Cost: 1.5-4% per month (slightly cheaper)
Visibility: Confidential - customer doesn't know
Best For: Established businesses with good credit control
More Discreet: Customer relationships unchanged, but requires proven credit management.
Invoice Finance: Pros & Cons
✅ Advantages
- ✓ Immediate Cash Flow: Get 80-90% of invoice value within 24 hours
- ✓ No Debt: Not a loan - finance tied to your invoices, not balance sheet
- ✓ Flexible: Finance grows with your business - more invoices = more funding
- ✓ Fast Approval: Easier to qualify than traditional loans (based on customer credit)
- ✓ Credit Management: Factoring includes collection services
❌ Disadvantages
- ✗ Expensive: Can cost 30-100% APR when annualized (high for short-term)
- ✗ Customer Relationships: Factoring means third party contacts your customers
- ✗ Limited Use: Only works if you invoice business customers (not retail/cash)
- ✗ Quality Requirements: Providers reject poor-quality or disputed invoices
- ✗ Hidden Fees: Service fees, setup fees, minimum monthly charges add up
When to Use Invoice Finance
Good Use Cases
- • Fast-growing business with increasing invoices
- • Seasonal business with lumpy cash flow
- • Large contract won but need upfront capital
- • Can't qualify for traditional bank loan
- • Need funding fast (within 24-48 hours)
- • Customers have long payment terms (60-90 days)
Use With Caution
- • As long-term funding solution (expensive)
- • If customers might object to factoring
- • Low margin business (fees eat profits)
- • If you have many disputed invoices
- • Retail or cash-based business model
- • If a cheaper loan is available
Better Alternatives
- • Business Line of Credit: Usually 8-12% APR (cheaper)
- • Working Capital Loan: Fixed rate, predictable costs
- • Payment Terms Negotiation: Ask customers to pay faster
- • Early Payment Discounts: Offer 2/10 net 30 terms
- • Debtor Finance: Similar but potentially cheaper
Compare Invoice Finance Providers
Get quotes from multiple invoice finance providers. Compare advance rates, discount fees, and terms to find the best deal for your business.
Invoice Finance Calculator FAQ
How much does invoice finance cost in NZ?
Invoice finance typically costs 1.5-5% per month (18-60% APR) depending on the provider, invoice quality, and payment terms. Add service fees of 0.5-2% of invoice value. While expensive compared to loans, it provides immediate cash flow without taking on debt.
What's the difference between factoring and invoice discounting?
Invoice factoring means the provider takes over collections (customers pay them directly). Invoice discounting is confidential - you collect payments and repay the provider. Factoring includes collection services but customers know you're factoring. Discounting is cheaper but requires good credit control.
What advance rate can I expect?
Most NZ invoice finance providers advance 80-90% of invoice value upfront. The exact rate depends on customer creditworthiness, invoice payment terms, and your business history. Prime invoices from blue-chip customers may get 90% advances, while riskier invoices might only get 70-80%.
Can I choose which invoices to finance?
Yes, with selective invoice finance (spot factoring), you can choose specific invoices to finance rather than committing your entire invoice book. This is more flexible but typically costs 0.5-1% more per invoice. Some providers require you to factor all invoices (whole turnover factoring).
What if my customer doesn't pay the invoice?
With recourse factoring (most common), you're responsible if the customer doesn't pay - you must repay the advance plus fees. Non-recourse factoring protects you from customer default but costs significantly more (30-50% higher fees). Check which type you're getting.
Is invoice finance cheaper than a business loan?
No. Invoice finance costs 30-60% APR vs business loans at 8-15% APR. However, invoice finance is faster (24 hours vs weeks), easier to qualify for, and doesn't show as debt. Use it for short-term cash flow gaps, not long-term financing where loans are much cheaper.