What Is Invoice Financing? A Complete Guide for NZ Businesses

Invoice financing is transforming how New Zealand businesses manage their cash flow. If you've ever waited 30, 60, or even 90 days for a client to pay an invoice, you know how frustrating it can be. Invoice financing offers a solution.

What Is Invoice Financing?

Invoice financing is a financial arrangement where a business sells its unpaid invoices to a third party (like Fee Funders) in exchange for immediate payment. Instead of waiting for your client to pay, you get the money upfront.

Here's how it typically works:

1. You complete work for a client and issue an invoice
2. You submit the invoice to an invoice financing provider
3. The provider pays you the invoice amount (usually 100%)
4. Your client pays the provider directly over time

Invoice Financing vs Invoice Factoring

These terms are often confused, but there are key differences:

Invoice Factoring: The factor typically pays 80-90% upfront, then the remainder (minus fees) when the client pays. Your clients know you've sold the invoice.

Invoice Financing (Fee Funders model): You receive 100% upfront. Your client pays in instalments directly to the provider. It's positioned as a payment plan benefit for your clients.

Who Uses Invoice Financing in New Zealand?

Invoice financing is popular across many industries:

• Accountants and lawyers with large annual fees
• IT companies with project-based billing
• Consultants and engineers
• Healthcare providers including dentists
• Home service contractors
• B2B suppliers offering trade credit

Benefits of Invoice Financing

The advantages for your business include:

• Improved cash flow: Get paid immediately instead of waiting
• No debt: Unlike a loan, you're selling an asset (your invoice)
• Growth enablement: Take on more work without cash flow constraints
• Client relationships: Offer payment flexibility without risk to you
• Time savings: Stop chasing overdue payments

Is Invoice Financing Right for Your Business?

Consider invoice financing if:

• You regularly issue invoices over $500
• Your clients often request payment terms
• Cash flow gaps affect your operations
• You want to offer payment plans without the admin

Getting Started with Fee Funders

Fee Funders makes invoice financing simple for New Zealand businesses. There are no setup fees, and you receive 100% of your invoice upfront. Your clients get the flexibility of paying over 3, 6, or 12 months.

Ready to improve your cash flow? Sign up takes just 5 minutes.