Invoice finance for New Zealand businesses.

Invoice finance is a working-capital structure where the lender advances a percentage (commonly 70% to 85%) of the value of unpaid B2B invoices at issue, and pays the balance when the customer settles, less a fee. It frees up cash trapped in long-customer-payment cycles.

A loan is a fixed sum repaid on a fixed schedule. Invoice finance is structural, scaling automatically with invoice volume, with each invoice cycle creating its own short funding event. The facility is funded by the customer payment rather than from cash flow generally.

Invoice discounting is confidential; the borrower retains customer relationships and collection responsibility. Factoring transfers collection to the lender; customers pay the lender directly. Discounting suits established businesses; factoring suits smaller businesses outsourcing the AR function.

Indicative cost runs 1.5% to 3% per invoice cycle on the advanced amount. Annual cost depends on cycle length, advance percentage, and debtor concentration. As a rough indicative, expect 2 to 3% of annual invoice volume as the total facility cost.

Once the facility is set up, invoice submissions typically advance within 24 hours. Initial setup is materially slower (2 to 4 weeks) because the lender reviews the debtor book, integrates with accounting software, and documents the facility.

Recourse means the borrower repurchases any invoice the customer fails to pay (the borrower carries the credit risk). Non-recourse transfers the credit risk to the lender (at higher cost). Most NZ invoice finance operates on full or limited recourse; non-recourse pricing typically runs 0.5 to 1 percentage point higher per cycle.

Yes, where the business issues B2B invoices on standard payment terms. Volume minimums apply (commonly $50K monthly invoice volume) because of fixed setup costs. Contractors invoicing one or two large customers may struggle on concentration limits.

On invoice discounting, no. The facility is confidential and customers continue paying the borrower. On factoring, yes; customers pay the lender directly. The discounting structure exists because many businesses prefer the customer relationship not to be visibly involved with a finance provider.

Invoice finance fees and interest are generally deductible against business income, subject to the accountant's confirmation. The fees are typically classified as financing costs rather than ordinary expenses.

Disputed invoices are typically excluded from the advanceable balance until resolved. On recourse facilities, an unresolved dispute that ages past the agreed window triggers the borrower buying back the advance.

Yes. Invoice finance is structurally compatible with term loans and lines of credit, particularly because the security interest is over the receivables rather than overlapping with general business assets. Coordination across multiple lenders is required to ensure the security positions do not conflict.

NZ specialist lenders typically require $50K monthly invoice volume as a minimum because fixed setup and administration costs make smaller volumes uneconomic. Some major-bank facilities target larger volumes ($300K+ monthly).