Five Important Questions About Invoice Finance

1. What size does an invoice need to be?

 An invoice needs to be $5,000 (including GST) or greater with no limit to the size of the invoice.

If your individual invoices are less than $5,000, you have the option to “batch” up your invoices to reach $5,000 of requested funding.

2. Will my customers think my business is in trouble?

Many business owners recognise that working capital is crucial for every business and that invoice finance is simply allows businesses to grab opportunities which might not otherwise be available when working capital is tight.

Invoice finance has become so well established that it would not be uncommon if your customers already deal with other clients using OptiPay or other Debtor Finance providers. They may even use it themselves.

3. Who uses finance in Australia?

The main areas of industry that utilise factoring and invoice discounting are:

  • Manufacturing
  • Recruitment
  • Construction
  • Printers
  • Wholesalers
  • Couriers

Invoice financing can also prove beneficial for:

Business start-ups – providing flexible finance to get new ventures off the ground.

Growing businesses – making your cash work harder for you.

Struggling businesses – bridging the gap between invoicing and receiving payment.

4. Does it matter if I only have one main customer?

Many growing Australian businesses have just one or two customers, which is not a problem when funding with OptiPay as we do not enforce debtor exposure limits on our clients. . We’ll provide funds to you as long as your customers have a good record of payment and are financially sound.

5. Should my business use Invoice Finance or Factoring?

There are clear differences between factoring and invoice financing.

Factoring is a more of a locked-in service for companies that don’t have an in-house credit control function. It involves outsourcing all of your credit control processes to the factoring provider, allowing them to chase down outstanding payments.  Furthermore, it requires your entire debtor book to be factored with the factoring provider.

Some business owners may be reluctant to go down this route, as it means relinquishing control on a key part of your company’s day-to-day operations and they may not need or want to fund every invoice to every debtor.

Invoice Finance is a better option for many Australian SMEs because it only assesses the suitability of the particular invoices you want to sell – not an entire debtor book.

There are usually less service fees with invoice financing, and unlike factoring, there are no long-term contracts.

MORE: Case study: Invoice finance for trade contractors

MORE: Invoice finance makes sense for commercial cleaning companies

MORE: Invoice finance for the labour hire industry

Free Expert Advice

If invoice finance is a solution you’re considering for your business, use OptiPay’s independent expertise and find out more about how it could benefit you and your business.

Help us to help you determine the best way forward. We specialise with supporting small and medium businesses.

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