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Cash flow
You’ve done the work and sent the invoice, but the money won’t arrive for 30, 60 or 90 days. Invoice finance pays you most of it now.
By Yatin Kainth, Financial Adviser FSP1007497. Last reviewed
Short answer
Invoice finance in NZ lets a business borrow against its unpaid invoices, usually receiving 70 to 90% of the invoice value within a day or two. The rest, minus fees, is paid when the customer pays. It suits B2B businesses with reliable customers and long payment terms. Costs are a discount fee on the money advanced plus a service fee.
Cash now
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Estimated cost
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Cost as % of invoices
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Indicative. Fee structures vary a lot between providers. Some charge a flat fee per invoice instead.
| Invoice factoring | Invoice discounting | |
|---|---|---|
| Who collects payment | The finance company | You |
| Customer knows? | Yes | Usually not (confidential) |
| Suits | Smaller or newer businesses | Larger businesses with good credit control |
Selective or single-invoice finance lets you fund just one big invoice instead of your whole ledger.
It often works alongside a bank overdraft rather than replacing it. See business loans for other options.
Set-up can take a few days to a couple of weeks. After that, advances are usually paid within 24 to 48 hours of an invoice being submitted.
Usually not. The invoices are the main security, though directors may need to give a personal guarantee.
With recourse finance (most common) you have to repay the advance. Non-recourse options cover bad debts, at a higher cost.
Yes. It's based more on your customers' credit than your trading history, which makes it one of the easier options for young businesses.
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