Updated on 14th August 2026

For Australian small and medium-sized enterprises (SMEs) with a low credit score or short trading history, securing finance from a traditional bank can be difficult. The good news is that a patchy credit history does not have to put working capital out of reach. Find out more about ScotPac’s Invoice Finance offering.

In short, yes – businesses with less-than-perfect credit or a shorter trading history may still qualify for Invoice Finance. Because the facility is secured against unpaid invoices, lenders look closely at your customers’ payment history and the quality of your debtor ledger, not just your own credit score.

That difference is what can make Invoice Finance, also known as Debtor Finance, more accessible than many traditional loans. A traditional business loan can be harder to obtain when your credit history is not strong, whereas Invoice Finance is linked to your receivables. If you are issuing valid invoices to creditworthy business customers and keeping clear records, a low score or shorter trading history may not rule you out.

At ScotPac, our lending specialists assess the strength of your debtor book and invoicing, then work with you to find a solution that fits where your business is today.

Why do new businesses and those with bad credit struggle to get finance?

Most traditional lenders focus heavily on two things: your credit score and your trading history.

A low score may reflect past late payments, high card balances or an old dispute, and it can stay on your record for years. A new business faces the opposite challenge, with limited history for a lender to assess.

Either way, the funding you need to grow your business can end up sitting behind criteria that look backwards at your past, rather than at the strength of the work you have already completed and invoiced.

Invoice Finance works differently.

How does Invoice Finance change the picture for businesses with bad credit?

Unlike a business loan, Invoice Finance uses the value of your outstanding invoices, also known as accounts receivable, as security.

That difference allows a lender to look beyond some of the stricter requirements attached to traditional term loans.

Approval depends heavily on how reliably your customers pay, rather than only on your own credit standing. If the businesses that owe you money have a strong track record, that can support your application. It is a large part of why Invoice Finance may work for newer businesses and those with less-than-perfect credit.

What does ScotPac look at when your credit is less than perfect?

When your own credit is not strong enough, the focus shifts to the quality of your invoices and the customers behind them. Here’s what carries weight.

What we weigh Why it matters
Your customers’ payment history Your invoices are the security, so reliable debtors can support your application
Valid B2B invoices Funding is for goods delivered or services completed, not staged or advance billing
Clear invoicing records Transparent, well-managed accounts make your position easier to verify
Business registration An active ABN and GST registration help confirm your eligibility

 

Your customers’ creditworthiness 

The most important factor is having valid, unpaid invoices issued to other businesses for work you have completed. Because those invoices secure the facility, your customers’ payment records can matter more than your own score. Lenders will usually review the creditworthiness of the debtors named on the invoices.

Clear, well-managed invoicing 

Using proper accounting software and payment systems keeps your accounts transparent and easier to verify. Even a younger business may qualify if it can clearly demonstrate genuine unpaid invoices owed by trustworthy customers.

Business registration 

Your business should be properly registered, with an ABN and GST registration in place. This helps a lender confirm your eligibility quickly.

What are the minimum eligibility criteria?

Invoice Finance is accessible, but there are still baseline requirements to meet. Here’s what ScotPac currently looks for:

  • B2B trading: you sell goods or services to other businesses on standard trade terms.
  • Trading history: a minimum of 6 months in operation, with consistent invoicing and collections.
  • Creditworthy debtors: your customers are reliable Australian businesses with sound payment histories.
  • Invoice value: a minimum average of $10,000 in invoices per month.
  • Invoice type: invoices are for goods delivered or services completed, not staged or advance billing.
  • Australian operations: your business is registered and operating in Australia, with invoices issued in Australian dollars.

How can you strengthen your credit position over time?

Even while Invoice Finance helps keep cash flow moving, it is worth rebuilding your credit position for the future. A few habits can make a real difference:

  • pay creditors on time, as even a single late payment can affect your score
  • keep credit utilisation low and avoid maxing out cards or credit lines
  • limit unnecessary credit enquiries, which can appear as financial strain
  • keep financial and public records clean and free of disputes
  • use business credit responsibly to build a track record of reliable repayment

If your invoices and customer base are strong, and your records are clear, qualifying may be within reach. Check your eligibility with a ScotPac specialist.

 

Frequently Asked Questions: Invoice Finance and dad credit

Will using Invoice Finance hurt my credit score?

Used well, Invoice Finance does not usually damage your credit score. It works differently from a traditional term loan because it is secured against your unpaid invoices. 

It can also help you stay on top of supplier payments, tax obligations and other commitments by improving cash flow timing. However, mismanaging a facility or breaching its terms can still create issues, so it is important to keep things in order. You can read ScotPac’s guide on Invoice Finance and credit here. 

Does ScotPac check my customers as well as my business?

Yes. Because your customers are the ones who ultimately pay the invoices securing the facility, lenders commonly review the businesses named on them. 

Strong, reliable debtors can support your application, even when your own credit history is not perfect. 

Can a brand new business with no trading history qualify?

Invoice Finance generally requires around six months of trading. A business on its first day is unlikely to meet that requirement yet, but every case is assessed on its own merits. 

A ScotPac specialist can tell you whether you qualify now or what would help you get there. 

What happens if one of my customers has poor credit?

AA single weaker debtor will not necessarily prevent approval, though it may affect how those particular invoices are treated. 

Spreading your invoicing across several reliable customers can strengthen your position. ScotPac also offers Bad Debt Protection as an add-on option, which can help safeguard your cash flow if a customer does not pay. 

Can I access Invoice Finance if my business has an ATO tax debt?

An outstanding tax debt does not automatically rule you out. ScotPac works with businesses managing ATO obligations and may be able to talk through suitable options. If you have an ATO debt, raise it directly with a specialist so they can assess your situation properly. 

Does bad credit mean I’ll pay higher fees?

Pricing is assessed case by case and depends on your facility, invoice terms, debtor risk and the strength of your debtor book. 

Because your invoices provide the security, strong customers may support more competitive terms. A specialist can prepare a tailored quote based on your business. 

Will my customers know I’m using Invoice Finance?

That depends on the facility you choose. Some Invoice Finance facilities can remain confidential, while others involve ScotPac supporting collections more directly. 

The right structure depends on how your business manages customer relationships and how much support you want with collections. 

Can my application still be declined even if my invoices are valid?

Yes. Your application can still be declined if other baseline criteria are not met. For example, your invoices may fall below the minimum monthly value, be issued to consumers rather than businesses, or relate to staged or advance billing. 

Knowing where you stand before you apply is exactly what a ScotPac specialist can help with. 

For more than 35 years, ScotPac has backed SMEs that may not fit traditional bank lending criteria, funding $26.3 billion in invoices each year and supporting over 9,300 businesses across Australia and New Zealand.