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Everything you need to know about invoice finance

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How does invoice finance work?

Invoice finance is a flexible business funding solution that allows you to access cash tied up in unpaid debtor invoices. Instead of waiting 30, 60, or even 90 days for customers to pay, you can access up to 80% of the invoice value within 24 hours.

The process is simple. Once you issue an invoice to your customer, you submit it to us (which can be an automated process). We advance you a large percentage of the invoice value, giving you immediate access to working capital. When your customer pays the invoice to us, the remaining balance is released to you, minus the agreed fee.

Invoice finance helps businesses improve cash flow, meet payroll commitments, purchase stock, invest in growth, and manage day-to-day expenses without taking on traditional loans. Because funding is linked to your sales ledger, the finance available can grow alongside your business.

Whether you're looking for invoice factoring, invoice discounting, or a tailored cash flow funding solution, invoice finance provides a fast, flexible way to turn unpaid invoices into working capital and support business growth.

Invoice finance could be for you if …

  • Growth is creating casfhlow pressure

    Growth is great — but it’s also expensive.

    As sales increase, so do your costs: more staff, bigger payroll, more materials, new suppliers that insist on short credit terms, additional equipment, higher operational expenses.

    But while your costs increase immediately, your customers might still take 30, 60, or even 90 days to pay.

    That gap can put a surprising amount of pressure on cashflow.

    Invoice finance helps by turning those unpaid invoices into working capital, so your funding grows alongside your revenue.

  • You've won a large new contract

    Winning a major contract should be exciting. And you’ve probably worked incredibly hard to get it, sacrificing other more secure revenue.

    But for many businesses, it also creates a new problem: how to fund it.

    Taking on larger orders often means buying more stock, hiring more staff, increasing production and covering higher upfront costs.

    All before the customer pays.

    Invoice finance allows you to take on larger opportunities with confidence, knowing the cashflow will follow the work.

  • Customers have long payment terms

    In many industries, long payment terms are simply part of the landscape. Or they’re part of the deal if you want to work with bigger corporates that dictate credit terms. (Mind you they often will expect you to use invoice finance).

    You might deliver the work today but wait 30, 60, or even 90 days to get paid.

    Invoice finance reduces the strain by unlocking most of the value of those invoices immediately.

    Instead of waiting weeks or months, businesses can access the cash much sooner.

  • You're growing faster than your bank facility

    Traditional bank funding doesn’t always scale with a business.

    Overdrafts and loans are usually based on historical financials and fixed limits.

    But when a business grows quickly, those limits can become restrictive as they don’t grow with  your business.

    Invoice finance works differently.

    Because funding is linked directly to your invoices, the facility can grow naturally alongside your sales.

  • Staff must be paid before customers pay

    Description goes hThis is a big one for service-based industries.

    Labour hire and temp agencies, consultancies and subcontractors often must pay wages weekly or monthly — long before their clients settle invoices.

    That creates a constant working capital gap.

    Invoice finance can smooth this cycle by providing access to funds tied up in unpaid invoices, making payroll far easier to manage. You get a double-bonus if this ensures you can pay your PAYE at the same time you pay wages, keeping your nose clean with IRD.

  • You want to take on bigger orders

    Many companies hit a frustrating ceiling where they could take on more work — but the cashflow simply won’t allow it.

    This is particularly common in sectors like manufacturing, wholesale, product distribution, food supply (eg to supermarkets) and engineering.

    A large order might require significant upfront investment in materials or production.

    Invoice finance gives you the confidence to accept those opportunities rather than turning them away.

  • You are expanding into new markets

    Entering new markets — whether geographically or through new customers — often requires additional working capital.

    You may need to build inventory, hire staff, invest in operations or more warehousing, and offer competitive payment terms.

    Invoice finance can provide the flexibility needed to support that expansion without putting pressure on day-to-day cashflow.

  • Your cashflow is getting unpredictable

    Even healthy businesses experience uneven cashflow.

    Late payments, seasonal demand, or uneven project billing can create periods where cash becomes tight.

    Invoice finance helps stabilise cashflow by providing more predictable access to funds based on invoices that have already been issued.

    That consistency can make planning and decision-making much easier.

  • You want to stop chasing payments

    For some businesses, managing debtor collections takes a huge amount of time and energy.

    Owners and finance teams end up spending hours chasing overdue invoices.

    Depending on the type of facility, invoice finance providers can support credit control processes, helping businesses stay on top of receivables and keep cash moving through the business.

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Invoice finance myths - busted

Invoice finance has been around for decades and is used by thousands of businesses worldwide. So why are we so wary of it here in New Zealand?

In reality, most of the myths come from outdated information, bad experiences years ago, or simple misunderstandings.

Here are some of the ones we hear all the time when we’re discussing business funding options with our clients.

 

  • This is probably the biggest misconception.

    Many businesses start looking at invoice finance when things are going well.

    Why? Because growth eats cash.

    If your sales increase, you suddenly have more wages, materials, stock, and overheads to pay — while your customers might still take 30, 60, or even 90 days to pay.

    Invoice finance simply bridges that gap.

    In fact, it’s often fast-growing businesses that benefit the most.

  • We hear this concern a lot – “I don’t want my customers to think I’m struggling”.

    The reality is that many large companies deal with suppliers using invoice finance all the time. For them, it’s just another payment instruction.

    Some customers won’t even notice. And those who do notice, generally see it as a normal part of business finance.

    It’s far more common than people realise.

  • The cost question always comes up — and rightly so.

    But the comparison that matters isn’t just the fees and the interest rate. It’s what happens if you don’t have the cashflow you need.

    Businesses lose opportunities every day because they can’t fund:

    • new orders

    • extra staff

    • larger contracts

    • expansion plans

    • business opportunities with large organisations that dictate long credit terms.

    Compared with missed growth, invoice finance is often surprisingly competitive.

    And what’s the cost of not having an invoice finance facility that grows with your business? The cost of invoice finance is often more competitive than people assume, especially if you compare it properly against alternatives such as:

    • overdrafts and credit cards

    • unsecured loans and the monstrous fees for missed repayments

    • second mortgages with non-bank lenders

    • equity dilution

    • delayed growth

    When you’ve got an invoice finance facility, you’ve also got someone keeping an eye on your customer payments. With a full-service facility, you’re basically getting a credit controller for your business.

    Invoice finance isn’t so expensive when you understand what you’re getting for your money.

  • Years ago, it could be. But technology has advanced, software has gotten smarter, and cloud accounting software companies love integrations that help their clients to thrive or survive.

    Once it's set up, it becomes just another part of how your business manages cashflow. And a good invoice finance provider will walk you through how to do your journal entries and bank reconciliation. Once you’re set up, you’re good to go and you’ll find things run much smoother than you think.

    No drama. No complexity.

  • This one usually comes from confusion about how these types of cashflow finance facilities work. Some business owners are afraid of their finance provider talking to their customers.

    Trust us when we say this: good business funders understand that your customer relationships are everything.

    Professional providers communicate clearly, act professionally, and work with you to make sure everything runs smoothly.

    In practice, many businesses find that payment processes actually become more structured and predictable.

  • That may have been more common years ago and maybe there are a few rogues out there that still lock you in.

    But the industry has evolved a lot. Many modern facilities offer far more flexibility and transparency than older products.

    Businesses now have a lot more choice in how funding is structured. You’ve got choices in who provides your business finance, so you don’t have to choose to be locked into a long funding contract.

  • Not at all.

    Invoice finance works for businesses of all sizes. What matters isn’t how big you are — it’s how your cashflow works.

    If you:

    • invoice other businesses,

    • offer credit terms of more than 7 days,

    • have cash ins and outs that are unsynchronised,

    • and need working capital to keep growing,

    then invoice finance can potentially help.

  • Factoring is one type of invoice finance, but it’s not the whole picture.

    There are several ways funding can be structured, including:

    • factoring

    • invoice discounting

    • selective invoice finance

    • confidential facilities

    Which one makes sense depends on your business and how you operate.

    That’s where experience really matters.

Why these myths still exist

Some of the confusion around invoice finance comes from how the industry used to operate.

Years ago:

  • products were less flexible

  • technology was slower

  • it was super complicated

  • and some providers didn’t communicate particularly well.

Things have moved on a lot since then.

Modern invoice finance is faster, clearer, and far more adaptable to how businesses actually work.

What experienced businesses understand about cashflow

There’s a simple truth that many growing businesses discover the hard way:

Sales growth doesn’t automatically mean healthy cashflow.

In fact, growth often increases the pressure on working capital.

Invoice finance solves that problem by turning unpaid invoices into cash you can use straight away.

Which means your cashflow can grow in line with your business, rather than holding it back.