Finding the right Invoice Finance provider can help your business unlock previously inaccessible working capital.

Invoice Finance can provide flexible, scalable, and cost-effective financial support to help your business better manage cash flow, invest in growth and fuel success.

So, how do you find the best Invoice Finance providers? What questions should you ask? And how do different finance providers differ in their service offerings?

To help you, we have put together this handy guide of insightful questions to help you choose the right Invoice Finance provider.

If you would like to find out more about the benefits of Invoice Finance, explore the ScotPac website here.

What questions should you ask to find the right Invoice Finance provider?

1. What are the costs and associated fees of your Invoice Finance offering? 

One of the many benefits of Invoice Finance is that it is an economical solution to accessing an advance on the money owed to your business.

But different Invoice Finance providers charge different rates and fees. These can include:

  • Application fees
  • Administrative fees
  • Funding fees
  • Exit fees

If a potential Invoice Finance provider can’t give you clear, transparent information about all of the costs involved, you may want to consider another financial institution that won’t leave nasty surprises waiting for you down the road.

2. How quick and easy is it to access the funding? 

Invoice Finance should allow you to access funding quickly and easily. The best Invoice Finance providers leverage modern technology, online portals and simple approval processes to ensure you can access working capital as soon as possible after approval.

In fact, the top Invoice Finance providers, such as ScotPac, ensure access in as little as just 24 hours!

3. Can I scale my Invoice Finance facility? 

Invoice Finance empowers small and medium sized businesses to grow and succeed because it is:

  • Flexible; and
  • Scalable

But not all providers offer the same level of flexibility and scalability. That’s why you need to clarify upfront how they control which invoices you will be able to fund or whether you have to finance your entire ledger.

Some Invoice Finance providers have minimum or maximum funding amounts, and if you are unsure whether these restrictions will hinder your business’s growth you should be asking this question up front.

4. Do they offer customer support?

It is not all about the money. Invoice Finance is a lot more than just a financial facility; it’s a potential long-term partnership. The best Invoice Finance companies work with their borrowers to genuinely help them succeed.

It is important you have a frank and honest conversation about the type of support a potential provider offers:

  • Will you have a dedicated account manager?
  • How responsive is their team to questions and problems?
  • How do they support their responsiveness?
  • How are disputes handled?

If you really want to do your due diligence, which you should, take the time to review the testimonials of past clients and check if their customer service is kept onshore or sent offshore.

5. How well does the provider understand your industry?

Invoice Finance is a great business solution for many business-to-business industries.

However, every sector is unique and has nuances which could require some tailoring of the broad invoice finance solution.

When comparing Invoice Finance providers, it is worth questioning their team as to what specific industry experience they have. Do they mostly work in labour-hire, wholesale or exports? The more customised support you can receive to suit your industry and situation, the better.

6. What technologies are used/available?

In today’s modern world, integrated technology should be a given. However, it is not.

Finding the best Invoice Finance companies means finding the ones that offer a seamless user experience. From online portals and intuitive dashboards to accounting software integration through an API, the right provider should save admin and management time, and avoid headaches, not the opposite!

If possible, ask the potential lender for a demonstration of their platform and to walk you through the tools they offer for managing your Invoice Finance facility.

7. What are the terms and costs around leaving or changing providers?

Not every Invoice Finance provider is for every business. There is a possibility that you may need to change providers or simply close your facility.

Whilst it is always important that before you sign anything you review the fine print for exit notice periods or termination fees, the responsibility begins before you shake hands.

Make sure to ask your potential finance provider about their terms of engagement. If they are unable to provide fair and transparent explanations of their terms and costs, your search for the best Invoice Finance companies ought to continue.

Why choose ScotPac as your Invoice Finance provider?

There are many reasons why ScotPac is considered one of the best Invoice Finance companies in Australia.

Apart from being the largest non-bank lender in the country, with more than 9,300 businesses supported, $26.4 billion in invoices funded annually and over 35 years of experience, we offer flexible, custom and scalable Invoice Finance solutions that help fuel your business’s success!

ScotPac was also recently awarded The Adviser Magazine’s Debtor Finance (also known as Invoice Finance) provider of the year, for a sixth time.

Ready to find out more? Speak to a lending specialist at ScotPac today!

Frequently Asked Questions

What types of businesses can qualify for invoice finance?

Every Invoice Finance provider will have slightly different eligibility criteria. Make sure to discuss your qualification attributes directly with the provider in question. 

Here at ScotPac, you will need to tick off the following checklist: 

  • Work in a business-to-business industry 
  • Have demonstrably consistent trading history 
  • Have creditworthy debtors 
  • A monthly average turnover of at least $10,000  
  • Owners/borrowers who are Australian citizens or permanent residents 

How does invoice finance differ from a bank loan or overdraft facility?

Invoice Finance uses the unpaid invoices owed to you by your customers as security for an advance on working capital. Whereas a bank loan is a lump-sum of money provided to eligible businesses, that must be repaid over a set period of time, and an overdraft facility is a pre-approved limit of additional funds for when your bank balance is at zero. 

Can start-up businesses access Invoice Finance?

Yes. Small, new and start-up businesses can access Invoice Finance to help accelerate their growth and fuel success if they meet the minimum lending criteria. 

Is Invoice Finance a confidential finance solution?

This depends on the type of Invoice Finance. Invoice Factoring involves the finance provider directly collecting the unpaid invoices from your customers, so confidentiality is reduced. Invoice Discounting leaves the debt collection in your hands and therefore can be completely confidential. 

Do all Invoice Finance providers offer Factoring and Discounting?

Not necessarily. Sometimes an Invoice Finance provider will specialise in one form of the solution or the other, so it is important to clarify your needs upfront. 

What happens if your customers do not pay?

Whilst the best Invoice Finance companies offer the support and expertise you need to ensure only invoices from creditworthy customers are financed and that outstanding debt is effectively collected, there is always a risk inherent to the process. 

Offerings such as Bad Debt Protection, which many invoice finance providers may include as well, can give you peace of mind and financial protection for instances when your customer defaults.