debtor and invoice finance
Stop waiting 30, 60, or 90 days for your customers to pay.
Debtor and invoice finance unlocks the cash sitting in your unpaid invoices so you can pay wages, cover suppliers, and keep your business moving.
Sierra Finance compares facilities from 50+ lenders to find the right structure, the right advance rate, and the right cost for your business.
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How Debtor and Invoice Finance Works
Debtor finance is a funding facility that turns your outstanding invoices into immediate working capital. Instead of waiting for your customers to pay on their normal trading terms, a lender advances you a percentage of the invoice value upfront, typically 80% to 85%. When your customer pays the invoice, you receive the remaining balance minus the lender's fees.
The facility is secured against your accounts receivable ledger, not against property or other business assets. That makes it fundamentally different from a business loan or overdraft. The amount you can access grows as your sales grow, because the facility is tied to your invoicing activity rather than a fixed borrowing limit.
There are several variations of debtor and invoice finance, and the right one depends on how your business invoices, how many customers you have, and how much control you want over the process.
Invoice factoring involves selling your invoices to a lender who takes over the collection process. The lender contacts your customer directly when payment is due. This suits businesses that want to hand off credit management entirely.
Invoice discounting works as a confidential facility where you continue to manage your own collections. Your customers may never know a funder is involved. This is the preferred option for businesses that want to protect their customer relationships.
Whole ledger facilities cover your entire receivables book on an ongoing basis, while selective or spot factoring lets you choose individual invoices to finance as needed. Selective facilities offer more flexibility but typically come at a higher per invoice cost.
Most facilities operate on a revolving basis. As old invoices are paid and new invoices are raised, the available funding adjusts automatically. There are no fixed monthly repayments in the traditional sense because the facility settles itself as your customers pay.
What You Can Finance with Debtor and Invoice Finance
Debtor and invoice finance is available for any business that issues invoices to other Australian businesses on standard trading terms. The invoices must be for goods or services that have already been delivered, not for work in progress or future deliverables.
Types of facilities available through Sierra Finance:
Full service factoring where the lender manages collections on your behalf, confidential invoice discounting where your customers are unaware of the arrangement, whole of ledger facilities covering your entire receivables book, selective invoice finance where you choose which invoices to fund, and single invoice facilities for one off cash flow needs.
Typical facility parameters across our lender panel:
Advance rates generally range from 80% to 90% of invoice value, depending on the lender, the industry, and the quality of your debtors. Facilities can start from as little as $50,000 in annual turnover with some lenders, while others target businesses invoicing $500,000 or more per year. There is no upper limit for established businesses with strong debtor books. Most lenders require debtor payment terms of 90 days or less, and invoices to related parties are generally excluded.
Who Debtor and Invoice Finance Is For
Debtor and invoice finance suits any B2B business where there is a gap between delivering the work and getting paid. The businesses that benefit most are those with strong sales but tight cash flow because their customers take 30 to 90 days to pay.
Industries where debtor finance is commonly used include transport and logistics companies waiting on freight invoices, construction subcontractors bridging the gap between completing stages and receiving payment, recruitment and labour hire firms covering weekly wages while invoicing clients monthly, manufacturing and wholesale businesses carrying stock costs ahead of customer payment, and professional services firms billing on completion of project milestones.
Debtor finance is not limited to businesses with cash flow problems. Growing businesses often use it as a strategic tool to fund expansion without taking on traditional debt. If your sales are increasing but your working capital cannot keep up, a debtor finance facility lets your funding grow in step with your revenue.
Businesses that may not suit debtor finance include those that sell directly to consumers rather than other businesses, businesses with very few customers or a single dominant debtor, and businesses that invoice on progress or milestone billing where the work has not yet been completed at the time of invoicing.
If you are unsure whether your business suits debtor finance or would be better served by a business loan or business overdraft, get in touch and we will walk you through the options.
Why Use a Broker For Debtor and Invoice Finance
Most business owners looking at debtor finance start by approaching one of the major providers directly. The challenge is that every lender structures their facility differently, and the differences have a real impact on your costs, your customer relationships, and how much admin the facility creates.
Some lenders require full notification, meaning every one of your customers is informed that a funder is involved. Others offer confidential facilities where your customers never know. Some lenders charge a flat percentage on every invoice. Others charge a base interest rate plus a service fee, which works out cheaper for businesses with larger average invoice values. Some lock you into 12 or 24 month contracts with minimum volume commitments. Others offer month to month arrangements.
As a broker with access to 50+ lenders, Sierra Finance compares these structures side by side and matches you with the facility that actually fits how your business operates. We handle the application, negotiate the terms, and make sure you understand exactly what you are signing up for before anything is locked in.
For businesses that already have asset finance, equipment loans, or other facilities through us, adding a debtor finance facility is straightforward because we already understand your business and your financials.
Get a Debtor Finance Quote
Sierra Finance compares debtor and invoice finance facilities from 50+ lenders with no obligation. Find out what your business qualifies for.
Getting Debtor and Invoice Finance
Step 1: Tell Us About Your Business
Call us on 0416 960 969 or submit an enquiry through the form below. We will ask about your annual turnover, how many customers you invoice, your average invoice size, and your typical payment terms. This tells us which lenders and facility types suit your situation.
Step 2: We Compare Facilities from Our Panel
We approach the lenders on our panel that are active in debtor and invoice finance and present you with the options. We explain the differences between each facility, including advance rates, fee structures, notification requirements, and contract terms, so you can make an informed decision.
Step 3: Approval and Setup
Once you choose a facility, we manage the application through to approval. Most lenders require your recent financial statements, bank statements, an aged receivables ledger, and ATO statements. Approval typically takes five to ten business days for a full debtor finance facility. Once approved, the lender integrates with your accounting software and you can start drawing against your invoices immediately.
Frequently Asked Questions
Ready to Unlock Your Invoices?
Call Sierra Finance on 0416 960 969 or fill out the form below. We respond same business day with a clear picture of what your business qualifies for.