Invoice Finance NZ
Convert unpaid invoices to immediate cash flow. Get up to 90% of invoice value within 24 hours.
What is Invoice Finance?
Invoice finance lets you convert unpaid invoices into immediate cash flow, rather than waiting 30-90 days for customer payments. You can access 70-90% of invoice value within 24 hours, helping maintain healthy cash flow and enabling business growth.
Popular with B2B businesses across manufacturing, construction, professional services, and wholesale, invoice finance grows with your business - the more you sell, the more funding becomes available.
Key Benefits
Fast Payment
Get up to 90% of invoice value within 24 hours
Flexible Funding
Finance single invoices or entire sales ledger
No Property Security
Your invoices and customer creditworthiness act as security
Pay As You Use
Only pay fees on invoices you actually finance
Professional Service
Lender manages collections or confidential options available
Scale with Growth
Funding automatically increases as your sales grow
Invoice Finance Options
- Advance Rate
- 70-90% of invoice value
- Funding Speed
- 24 hours (once approved)
- Cost
- 1.5-4% per month of invoice value
- Invoice Size
- $5K - $2M+ per invoice
- Business Turnover
- Typically $500K+ annually
- Requirements
- B2B invoices to creditworthy customers
Types of Invoice Finance
Invoice Factoring
Advance: 80-90%
Cost: 1.5-3% per month
Sell your invoices to a finance company who takes over collections
Advantages
- • Higher advance rates (80-90% of invoice value)
- • Professional collections service
- • Credit protection on customer defaults
- • Sales ledger management included
Considerations
- • Customers know about the arrangement
- • Less control over customer relationships
- • Ongoing commitment usually required
Best For
Businesses wanting to outsource collections and credit control
Invoice Discounting
Advance: 70-80%
Cost: 1-2.5% per month
Borrow against invoices while maintaining full control of collections
Advantages
- • Confidential arrangement with customers
- • You retain control of customer relationships
- • More flexible usage
- • Often lower fees than factoring
Considerations
- • Lower advance rates (70-80% of invoice value)
- • You handle all collections
- • Requires good credit control systems
- • Bad debts remain your responsibility
Best For
Businesses with strong credit control wanting confidential funding
Selective Invoice Finance
Advance: 70-85%
Cost: 2-4% per month
Choose specific invoices to finance rather than whole sales ledger
Advantages
- • Maximum flexibility and control
- • No ongoing commitment required
- • Choose best invoices to finance
- • Lower overall costs
Considerations
- • Higher per-invoice fees
- • May have minimum volumes
- • Less suitable for regular funding needs
- • Setup costs for small volumes
Best For
Businesses with occasional large invoices or project-based work
Invoice Finance by Industry
Manufacturing
Advance: 85%
Invoice Size: $25K - $500K
Scenario: 30-60 day payment terms with suppliers requiring immediate payment
Solution: Factor monthly invoices to maintain cash flow for raw materials
Construction
Advance: 80%
Invoice Size: $50K - $2M
Scenario: Progress payments every 30-90 days but ongoing wage and material costs
Solution: Invoice finance on milestone payments to fund ongoing work
Professional Services
Advance: 75%
Invoice Size: $10K - $200K
Scenario: Large consulting or legal projects with extended payment cycles
Solution: Selective invoice finance for major project invoices
Staffing/Recruitment
Advance: 85%
Invoice Size: $15K - $300K
Scenario: Weekly payroll costs but monthly invoice collections
Solution: Invoice factoring with weekly advances to meet payroll
Wholesale/Distribution
Advance: 80%
Invoice Size: $20K - $750K
Scenario: 60-90 day customer payment terms but supplier financing needs
Solution: Invoice discounting to maintain customer relationships while improving cash flow
Invoice Finance vs Other Funding Options
| Option | Cash Flow | Amount | Cost | Best For |
|---|---|---|---|---|
| Invoice Finance | Immediate (24 hours) | Up to 90% of invoice value | 1.5-4% per month | B2B businesses with creditworthy customers |
| Traditional Bank Loan | 2-6 weeks approval | Fixed loan amount | 8-15% per annum | Established businesses with assets |
| Business Overdraft | Immediate once approved | Typically $10K-$100K limit | 12-25% per annum | Short-term cash flow gaps |
| Trade Finance | 1-2 weeks | Based on purchase orders | 2-5% per month | Import/export businesses |
How to Apply for Invoice Finance
Assess Your Invoice Portfolio
Review your outstanding invoices and customer payment history
- Compile aged debtors report (invoices outstanding)
- Review customer payment history and creditworthiness
- Calculate average invoice values and payment cycles
- Identify which invoices are suitable for financing
Choose Invoice Finance Type
Select factoring, discounting, or selective based on your needs
- Decide if you want customer notification (factoring) or confidential (discounting)
- Consider whether you want ongoing facility or selective invoice financing
- Evaluate if you want collections management included
- Compare advance rates vs costs for each option
Prepare Documentation
Gather business information and customer details
- Business financial statements and bank statements
- Customer aged debtors listing
- Sample invoices and proof of delivery
- Customer credit references and trading history
Apply and Get Approved
Submit application and start receiving advances
- Submit application through SME Loans platform
- Lender reviews customer creditworthiness
- Credit limits set for approved customers
- Start receiving advances on verified invoices
Invoice Finance Tips
Key Invoice Finance Terms
Advance Rate
The percentage of invoice value you receive immediately (typically 70-90%)
Discount Fee
The cost of financing, usually 1.5-4% per month of invoice value
Retention
The balance held back (10-30%) until customer pays or credit period expires
Recourse
You remain liable if customer doesn't pay (most common arrangement)
Non-Recourse
Finance company takes bad debt risk (higher fees, strict criteria)
Credit Limit
Maximum amount that can be advanced against each customer
Concentration Limit
Maximum percentage of funding that can come from single customer
Verification
Process of confirming invoices are genuine and goods/services delivered
Benefits
- Immediate cash flow from outstanding invoices
- Funding grows automatically with your sales
- No need to provide property or asset security
- Professional collections service (factoring)
- Credit protection options available
- Flexible usage - finance as needed
- Better supplier payment terms and discounts
- Ability to take on larger contracts
Frequently Asked Questions
How quickly can I get money from invoice finance?
Once approved and set up (typically 1-2 weeks), you can receive advances within 24 hours of submitting verified invoices. The fastest providers can advance funds within hours.
Do my customers need to know about invoice finance?
With invoice factoring, yes - customers are notified and make payments directly to the finance company. With invoice discounting, the arrangement can be confidential and customers continue paying you directly.
What happens if my customer doesn't pay their invoice?
With recourse facilities (most common), you're responsible for repaying the advance. With non-recourse facilities, the finance company bears the loss but charges higher fees and has stricter customer approval criteria.
Can I choose which invoices to finance?
Yes, selective invoice finance lets you choose specific invoices. However, whole ledger facilities often offer better rates and higher advance percentages due to the portfolio effect.
What types of businesses can use invoice finance?
Any B2B business with creditworthy customers can use invoice finance. It's particularly popular with manufacturing, construction, staffing, professional services, and wholesale businesses.
How much does invoice finance cost?
Costs range from 1.5-4% per month of invoice value, depending on your industry, customer quality, invoice size, and chosen facility type. This often works out cheaper than overdrafts or short-term loans.
Is there a minimum invoice size or business turnover?
Most providers require minimum annual turnover of $500K-$1M and individual invoices of at least $5K-$10K. Some specialists work with smaller businesses but may charge higher fees.
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Convert Your Invoices to Cash Today
Compare invoice finance providers and get up to 90% of invoice value within 24 hours. Choose from factoring, discounting, or selective invoice finance.