What is invoice finance and how does it work?

Key facts

• The short answer: A funder pays you most of an unpaid invoice now, usually within about a day, and collects the rest when your customer pays. You pay a fee for the time.
• How much you get: Usually 80 to 90 percent upfront. The rest arrives when your customer pays, minus the fees.
• Three versions: The funder chases your customers, or you keep chasing them, or you fund just one invoice at a time.
• Who can use it: Any business that invoices other businesses or government on credit terms, for work already done.
• The trade-off: You are paying for time. The longer your customer takes to pay, the more the invoice costs you.

You finish the job. You send the invoice. Then you wait. Wages, fuel and suppliers do not wait with you. Invoice finance fixes that timing problem. A funder pays you most of the invoice now, and you pay a fee for the privilege. Here is how it works and who it suits.

Why waiting to be paid hurts so much

Australia has 2,814,778 businesses trading right now, according to the Australian Bureau of Statistics. Most of them sell on credit terms. That means you do the work first and get paid weeks later.

And often later than agreed. The Payment Times Reporting Regulator found in August 2026 that the best performing industry in the country still only paid 76.4 percent of small business invoices on time. That is the top of the table. Roughly one invoice in four is late even there. Your costs, meanwhile, arrive on schedule.

How it works, step by step

Nothing changes about how you win or do the work. Only the timing of the money changes.

• You invoice as usual: Same customer, same terms, same invoice.
• You send it to the funder: Through a portal, or straight from Xero or MYOB. It takes a couple of minutes.
• The funder pays you most of it: The share you get upfront is called the advance rate. On a $100,000 invoice at 85 percent, that is $85,000, often within about a day.
• Your customer pays on their normal terms: They pay the funder, or they pay you, depending on which version you choose.
• You get the rest: The remaining 10 to 15 percent comes to you once the money clears, minus the funder's fees.

One useful feature: the funding available is tied to your eligible invoices rather than a flat number, so it can rise as you invoice more. Funders still set an overall limit and review it.

The three versions

What you need to qualify

• Business customers: This funds invoices owed by other businesses or government, not by the public.
• A clean invoice: The work is finished, the invoice is not in dispute, and it is not already overdue.
• Customers who pay: Funders check who owes you as closely as they check you. Reliable customers mean a better rate.
• Enough volume: Facilities covering your whole customer list often start around $500,000 a year. Single invoice deals are more flexible.
• A specialist, for builders: Progress claims and retentions can be funded, but only a handful of funders will do it.

A realistic scenario

A civil contractor in Brisbane invoices four builders about $180,000 a month, on 60-day terms. Wages go out every week. So the business pays two months of costs before that money lands. A big job comes up. Taking it would push the bank account past its limit.

With factoring at an 80 percent advance rate, roughly $144,000 hits the account a day after invoicing, every month. Payroll stops being a scramble. The new job becomes possible. The funder does the chasing. The contract and the work stay exactly the same.

Where EasyAsset comes in

Invoice finance is not a standard product. Every funder sets its own rates, its own minimum size, and its own rules about which industries it will touch. Send the same invoices to five funders and you can get five very different answers.

That is the part we handle. You fill in one application. We take it to 60+ bank and non-bank lenders, including specialist funders you cannot approach directly. We already know who is comfortable if most of your work comes from one big customer, who will fund building progress claims, and who offers the private version at your size. So you go to the funders likely to say yes, on good terms, rather than working through the list yourself. We then deal with the paperwork and the funder from application to settlement. If your problem turns out to be stock or general running costs instead of unpaid invoices, cash flow finance or working capital finance may suit you better, and we will tell you.

What matters most

Invoice finance does not make you more money. It gets your own money to you sooner, which for most businesses is the thing actually holding them back. Pick the version that suits how you want to deal with customers. Then get the funder right for your industry and your customer list. Do both and the invoices in your drawer start working as cash.