Updated on 24th November 2025

Invoice Finance is a customisable business finance solution for New Zealand-based small and medium-sized enterprises (SME) needing to boost their working capital. With access to reliable working capital when you need it, your business can ensure regular cash flow and unlock steady long-term growth.

If you’re not sure what Invoice Finance actually entails, how it works in practice or how businesses in New Zealand are using it, keep reading! In this article, we’ll walk you through everything you need to know to get started with Invoice Finance, so you can decide whether it’s the right solution for your business.

What is Invoice Finance? A New Zealand Business Guide

Invoice Finance is a tailored funding solution that is becoming increasingly popular with Kiwi businesses. It is often referred to by other names as well, including debtor finance or accounts receivable financing.

In New Zealand, SMEs often face delays waiting for customers to pay invoices, especially those customers that happen to be larger firms with standard 30 day terms. The reality is that some businesses have to wait 60 or even 120 days to receive the money owed to them.

This can put financial pressure on a smaller business.

Invoice Finance steps in to bridge that gap in working capital by providing access to cash right when it’s needed most and unlocking cash flow to allow your business to keep on moving.

Invoice Finance in New Zealand

The business culture in New Zealand is unique and important. It is underscored by honest communication, mutual trust, and fair, practical solutions that help foster genuine business relationships. As an SME, this means that offering flexible payment terms – whilst often expected as a show of fairness and trust – can lead to some cash flow challenges for your business.

Invoice Finance offers a transparent, quick, and flexible way to unlock the cash you need from the unpaid invoices you’re owed. In other words it allows the best of both worlds. Your business enjoys reliable, practical cash flow to support its growth and operations whilst your customers benefit from ongoing levels of trust and flexibility in payment terms.

What are the different types of Invoice Finance

There are three main ways NZ businesses can use Invoice Finance, each offering their own benefits and trade-offs:

1. Invoice Factoring

With Invoice Factoring, also called debt factoring, your business sells the invoices to the finance provider who then provides an advance of working capital. The lender then handles the debt collection.

Invoice Factoring is best for small Kiwi businesses without in-house credit control and without concern that their customers might be made aware about the funding facility.

2. Invoice Discounting

Invoice Discounting means that your business maintains control of the debt collection process and responsibility. This allows for a more discreet and confidential arrangement but will require your company to have a sufficiently robust accounts receivable department and process.

3. Selective Invoice Finance or Spot Factoring

With Selective Invoice Finance, your business can choose which specific invoices to finance, offering greater flexibility. This type of facility is often used by New Zealand SMEs with fewer invoices that are of higher-value.

How does Invoice Finance help businesses?

In its most simplest form, Invoice Finance turns your unpaid invoices into accessible cash bypassing the need to wait months for payment from your customers. The accounts receivable themselves, i.e., the unpaid invoices, serve as collateral for the advance of funds. You can then access a percentage (up to 85% with ScotPac) of the invoice value in NZD within a day or two.

It allows your business to access what is essentially a line of credit by leveraging the otherwise locked up value of your customer invoices as collateral. With your cash flow maintained, you can effectively cover payroll, pay suppliers, or invest in new market opportunities.

How New Zealand businesses are using Invoice Finance to get ahead

More and more NZ businesses are turning to Invoice Finance as a funding solution to their cash flow problems.

Invoice Finance offers a practical and accessible solution for SMEs needing to:

  • Meet unexpected business costs and other expenditure
  • Cover bulk supplier costs promptly
  • Stay on top of wages and payroll
  • Manage ongoing operating expenses
  • Invest in time-sensitive market opportunities for growth
Benefits of Invoice Finance

1. Flexibility 

Invoice Finance allows your business to access the money it needs, when you need it instead of having the money owed to you tied up in unpaid invoices.

2. Cash Flow Control 

If your business experiences seasonal fluctuations in sales, is going through a tough financial period or has unexpected costs on the horizon, Invoice Finance gives you the ability to control and maintain your cash flow.

3. No Security 

The Invoice Finance facility is secured against your submitted unpaid invoices, which means you don’t have to put up your property or personal assets as collateral.

Are you eligible for Invoice Finance?

Invoice Finance is open to New Zealand businesses of all sizes but only for business-to-business SMEs. (Though, some micro-businesses or start-ups may not have the requisite volume or value of invoices to qualify.)

Lenders will also look at the creditworthiness of your customers and the strength of your receivables ledger to minimise their own risk in extending you the advance.

What happens if the customers or clients don’t pay at all? Responsibility for non-payment typically rests with your business, though with adequate Bad Debt Protection from ScotPac, you can ensure peace of mind knowing you have a safety net to cover risky accounts.

To help facilitate the process of applying for Invoice Finance, it pays to have clear records and a reliable, demonstrable collection process helps.

Is Invoice Finance Right for your business?

Whilst suitable for most B2B businesses, not all businesses across New Zealand would suit an Invoice Finance solution. It is important to note that there are fees associated with Invoice Finance, which can be equal or greater to some alternative funding solutions, such as a Business Loan.

Some facilities include service fees (sometimes called a discount fee) as a percentage of the total value of the invoices. For example, the lender may charge 3% (e.g., NZD $300 on a $10,000 invoice), plus any admin charges.

Make sure to speak to a lending specialist at ScotPac NZ to understand the rates and fees to determine what the best solution is for your bottom line.

Find Out More About Invoice Finance for New Zealand Businesses

Invoice Finance is becoming an increasingly popular option for New Zealand SMEs. Thanks to its quick turnaround time and flexible structure it offers a practical solution for managing business cash flow.

With ScotPac, you’re working with a partner that has over 35 years of experience, funds $23.9 billion worth of invoices annually and currently supports 9,300+ businesses across New Zealand and Australia.

To find out more about what Invoice Finance is and how it can help your business, contact our team today.