Invoice factoring made simple

How invoice factoring works with Earlypay

1. Invoice your clients as you normally would.
2. Provide Earlypay with the details of the invoices you would like to fund. (If you use Xero or MYOB AccountRight Live,Earlypay can source your invoice details through our clever integration. If you don't use these online accounting platforms, you can upload the invoice details to our platform.)
3. Receive up to 80% of the value of your funded invoices upfront.
4. Your customers pay invoices into a collections account that is set up in your name. This repays the outstanding finance, and the excess becomes available to you.

Will my customers know that I'm using Invoice Factoring?

Earlypay offers both Confidential (Undisclosed) and Disclosed Factoring services. Typically, established businesses are eligible for Confidential Factoring, and Disclosed Factoring is better suited to businesses that have a short trading history, significant debts or a less than perfect credit history. Earlypay will work with you to tailor the best solution for your business.

How do I access my Invoice Factoring facility?

When your account is set up, you then have full access Earlypay’s secure online portal. From there, you can view your available funding, track invoices, request drawdowns, and download reports. All in a few clicks. It’s designed to make managing your cash flow simple, fast, and hassle-free.

What security do I need to provide for Invoice Factoring?

One of the main benefits of Invoice Factoring is that it doesn't require real estate security. Funding is advanced against the value of the unpaid invoices and the primary security is the invoices themselves.

What is the difference between Invoice Factoring and Debt Factoring?

Nothing, Debt Factoring is another name for Invoice Factoring.

What is Confidential Factoring (Undisclosed Factoring)?

Confidential Factoring or Undisclosed Factoring is when Earlypay provides funding of your invoices and your customers are not aware that there is a Factoring facility in place. Confidential factoring is generally offered to businesses with a strong track record.

What is Disclosed Factoring?

Disclosed Factoring is the arrangement where your customers are aware that Earlypay is financing your invoices. This is a useful arrangement for businesses that have small finance teams or simply choose to outsource this function and focus on other areas of their business. Disclosed factoring arrangements generally involve Earlypay managing the collection of your invoices and we may contact your customers on your behalf to ensure they pay your invoices.

Disclosed factoring is increasingly common in Australia and although some business owners worry about their customers knowing that they use factoring, it is very rarely an issue. If you do prefer that the factoring arrangement remains confidential, please let your Earlypay representative know.

What is Partnership Factoring?

Partnership Factoring is an arrangement where the business retains control over the collection of the invoices and Earlypay will assist with other services such as allocating payments to invoices and stepping in to chase overdue invoices if necessary. Partnership factoring is suitable for businesses that want to maintain control over their customer relationships but would like to outsource some aspects of their accounts receivable management.

What is the difference between Selective Invoice Factoring and Whole Ledger (Whole of book) Factoring?

Selective Invoice Factoring allows businesses to finance some of their customer invoices whereas Whole Ledger Factoring, or Whole of book Factoring, makes all of the accounts receivable available for financing. Many businesses prefer to maximise the amount of funding by using all of their invoices although Earlypay also offers Selective Invoice Factoring.

What is the difference between Invoice Factoring and Invoice Discounting?

Invoice Factoring and Invoice Discounting are the two types of Invoice Financing.

Invoice Factoring involves a business selling its invoices to the invoice factoring company in exchange for upfront payment for around 80%. When the invoice is paid, the finance with the factoring business is repaid and the balance, less any fees, becomes available to the business that sold/financed the invoice. Invoice factoring is generally disclosed to your customers and the financier can manage collections. Earlypay can however, offer confidential facilities to selected businesses.

Invoice Discounting is different to Invoice Factoring as the invoices are not sold to the invoice financing business but instead used as security for finance. A business can access funding of up to 80% of the value of its outstanding accounts receivable balance. Invoice Discounting is often confidential and the business retains control of invoice collections management making it better suited to larger and more established businesses.

What is the difference between Invoice Factoring and Invoice Discounting?

Invoice Factoring and Invoice Discounting are the two types of Invoice Financing.

Invoice Factoring

With invoice factoring, your business sells its unpaid invoices to a financier (like Earlypay) in exchange for upfront payment. Typically it’s around 80% of the invoice value. When your customer pays the invoice, the advance is repaid and the remaining balance (minus fees) is released to you.

Factoring is usually disclosed, meaning your customers are aware of the arrangement and that they pay Earlypay directly. This allows us to help manage the collection of your unpaid invoices from your clients, which can be especially useful for businesses with limited trading history or credit challenges. Earlypay also offers confidential facilities to eligible businesses.

Invoice Discounting

Invoice discounting works differently. You don’t sell your invoices. Instead, they’re used as security for a line of credit. You can access up to 80% of the value of your outstanding accounts receivable, but you remain in control of collections.

Because this arrangement is usually confidential, your customers won’t know you’re using a finance facility. This makes invoice discounting a better fit for larger or more established businesses with strong internal credit control.

What type of Invoice Factoring is right for my business?

Invoice Factoring is a flexible funding solution that suits many different types of businesses, including wholesale, transport, manufacturing, recruitment, labour hire, and professional services. It can be customised to suit your specific business needs. However, which type of invoice factoring suits your business depends on several things:

• Disclosed Factoring is typically suited to newer businesses with a shorter trading history, ATO debt, or credit challenges. Your customers are notified and pay Earlypay directly, which helps streamline collections and reduce risk.
• Confidential Factoring is available to more established businesses with strong financials. Your customers aren’t notified, and you continue managing collections as usual.

Both options unlock cash tied up in unpaid invoices, and can include collections support if needed. Every business is different so our team will work with you to customise a facility that fits your goals, cash flow, and customer relationships.

Can I use Invoice Factoring if I have a loan with other lenders?

Yes, absolutely. Because Invoice Factoring (accounts receivable financing) is secured against your unpaid invoices, it can sit comfortably alongside other types of finance. That means you can keep your existing lender relationships while improving cash flow through Earlypay.

Is Invoice Factoring suitable for start-ups?

It certainly is! Invoice Factoring is a great solution for early stage businesses. If you’ve completed work for customers and have outstanding eligible invoices, we can help unlock the cash flow you need to grow. Without waiting for your customers to pay.

Can you help if my business has ATO tax debt?

Yes. Invoice Factoring can be suitable for businesses that have ATO debts and is often available when other types of business loans are not.

How do I apply for Invoice Factoring?

Getting started with Earlypay is simple. Just click the sign-up button and fill in a few basic details. Our team will then be in touch shortly to guide you through the next steps.

If you use Xero or MYOB AccountRight, you can fast-track your application by securely connecting Earlypay to your accounting software. This allows Earlypay to access key financial data like invoices, credit notes, bank transactions, and reports, to assess your eligibility quickly and accurately.

How long will it take for my finance to be approved?

If you use one of the compatible online accounting platforms, we aim to let you know within 24 hours if your finance has been approved or not. If you don't use Xero or MYOB AccountRight it can take a little longer depending on how long it takes to get the information together.

How much finance can I get?

We have the capacity to support businesses of all sizes with finance options from $100,000 to $10 million. However, the exact amount you can access depends on the value of your accounts receivable ledger or unpaid customer invoices. Typically, we can provide a cash advance of up to 80% (and in some cases, up to 85%) of your eligible invoices.

For example, if you have $500,000 in outstanding invoices, you could access around $400,000 upfront with flexibility to go higher in certain cases.

What invoices can I fund?

We will fund invoices issued to Australian businesses for goods delivered or services completed. There are however a few qualifications. Invoices must be:

• Outstanding (not yet paid)
• Less than 90 days past the issue date
• Related to completed work or delivered goods

Why would I use Invoice Factoring instead of an Unsecured Business Loan?

Invoice Factoring is generally more flexible than Unsecured Business Loans because you can access funding as and when you need the cash flow. Unsecured Business Loans provide a lump sum amount that is repaid with regular repayments over a fixed term whereas the repayment of Invoice Financing occurs when customers pay the invoices that were financed.

Invoice factoring is often more cost effective than unsecured business loans as it uses the accounts receivable ledger of your business as security, making it less risky for the invoice financier.

Business loans require businesses to have been operating for a minimum period and show evidence that the repayments can be adequately covered by revenue. Invoice factoring, can be a great solution for businesses that have invoices eligible for financing but don't quite satisfy the requirements for unsecured business loans.

If you're business has a short trading history, less than perfect credit score or ATO debts, you may still be eligible for invoice factoring with Earlypay.