Invoice finance is usually priced as a mix of charges, not one rate. The advance rate, a discount or finance charge, service fees and any setup or minimum charges all affect what you pay. To compare offers, you need to know what each fee covers and how it is calculated.
loan-o is a Brisbane finance broker based in Milton. We compare invoice finance across a panel of 50+ bank and non-bank lenders. This guide is general information and does not quote prices, because costs vary between lenders and businesses. Check the details of any offer and the tax side with your accountant.
The parts of an invoice finance price
Most invoice finance arrangements are built from the same pieces. Lenders name and combine them differently, so ask for each one in writing.
| Charge | What it is | What to ask |
|---|---|---|
| Advance rate | The share of each invoice paid to you upfront | What is the rate, and when is the rest released? |
| Discount or finance charge | The cost of the money advanced, usually charged while the invoice is unpaid | How is it calculated, and does it rise the longer an invoice is outstanding? |
| Service or admin fee | A fee for managing the facility, often based on invoice value or turnover | What is it based on, and is there a minimum? |
| Setup fee | A one-off charge to establish the facility | Is it charged upfront, and is it refundable? |
| Minimum volume or fee | A charge if you finance less than an agreed amount | What happens in a quiet month? |
| Other charges | Credit checks on customers, payment or transfer fees, early termination | Which ones apply, and how are they billed? |
Why the advance rate is not the cost
A higher advance rate gives you more cash sooner, but it does not tell you what the cash costs. Two lenders can advance the same percentage and charge very different amounts once discount charges and service fees are added. Compare the total cost for the same set of invoices, not the headline numbers.
What changes the price
- Structure. Factoring, discounting and selective (spot) finance price differently. Selective finance has no ongoing commitment and is often more expensive per invoice; a full facility can cost less per invoice but may come with minimum volumes. See our invoice finance page for how each works, and invoice factoring vs invoice discounting for how the structures differ.
- Your customers. Lenders look closely at who owes the money. Reliable, established debtors generally support better terms.
- How long invoices stay unpaid. If the discount charge builds the longer an invoice is outstanding, slow payers cost more.
- Volume and concentration. Larger, steadier volumes and a spread of customers can help. Relying on one or two customers can limit terms.
- Recourse. With recourse, you can remain responsible if a customer does not pay. Without recourse, the lender may take on part of that risk, usually at a higher cost and with conditions.
Questions to ask before you sign
- Can you list every fee and how each one is calculated?
- Is there a minimum volume, minimum fee or lock-in period?
- What does it cost if I leave early or end the facility?
- What happens if a customer pays late or disputes an invoice?
- Is the facility with or without recourse, and what is excluded?
- Will my customers be told, and who collects the payments?
Our guide to comparing the total cost of business finance shows how to put offers side by side. If you are weighing invoice finance against other ways to cover a cash flow gap, see invoice finance vs line of credit vs overdraft and line of credit vs term loan.
The takeaway
Do not judge invoice finance by one number. Compare the full set of charges for the same invoices, and check the minimums, termination terms and recourse. loan-o can review any offer you already have for free; start a free finance check with no credit check to enquire.
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Finance is subject to lender approval, lending criteria, terms, conditions, fees and charges. The information in this article is general and does not take into account your personal or business needs. It should not be treated as personal financial, tax, legal or credit advice.
Last reviewed: 22 October 2026. This content provides general information only. It should not be treated as personal financial, tax, legal or credit advice.
Frequently asked questions.
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It depends on the lender, the structure, your invoice volumes, how long invoices stay unpaid and the quality of your customers. Costs are usually made up of a discount or finance charge plus service fees, and sometimes setup or minimum-volume charges. Ask each lender for every fee in writing so you can compare the total.
The advance rate is the percentage of an invoice's value that the lender pays you upfront. The rest is released, less fees, once your customer pays. A higher advance rate gives you more cash sooner but does not by itself tell you the cost.
Per invoice it often is, because there is no ongoing commitment and the lender prices each advance separately. A full facility can cost less per invoice but may come with minimum volumes or a longer contract. Which is cheaper overall depends on how much you use it.
Some facilities charge a minimum fee or have a minimum volume, so you pay even if you finance fewer invoices. Check for minimums, and for early termination or notice fees, before you sign.
This depends on whether the facility is with recourse or without recourse. With recourse, you can be responsible if a customer does not pay. Without recourse, the lender may carry some of that risk, usually at a higher cost and with conditions. Ask exactly what is covered.
Yes. loan-o is a broker, not a lender, and compares options across a panel of 50+ bank and non-bank lenders. Starting a conversation is an enquiry and does not involve a credit check.
Comparing invoice finance offers? Ask a loan-o specialist first.
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