Frequently Asked Questions
+ What does InvoiceX do?
We’re the only company in Australia that connects businesses with confidential, individual invoice-based finance from sophisticated investors. Growing businesses with high-quality receivables can convert them easily into capital to grow, with absolutely no lock-ins. Our Match Maker Trading Platform™ rapidly matches investors with businesses, optimising the deal for both parties.
+ How does it work?
Make contact with us and tell us your story. If you are an Australian company with a clean credit history, large customers and you are growing, there is every chance we can help. We pride ourselves in giving customers a quick answer. We give you a quick yes/no without you needing to fill out any paperwork.
If we can help, open an account with us. To make life easy/online we use DocuSign, an electronic signature system. There are no set-up fees and the process is straightforward. We agree a list of Approved Debtors which are usually large Australian businesses or government entities.
When you have an invoice from an Approved Debtor that you want to turn into cash, we just need an email with a copy of the invoice, purchase order/contract and proof of acceptance of the goods or service by your customer.
We will provide a cash advance (up to 85% of the Face Value of the Invoice) by the next business day. The balance is paid to you less our fees when your customer pays. Use our service as much or as little as you like. There are no lock-ins.
+ What are the fees?
There are only two fees – Processing Fee and Discount Fee. There are no set-up fees or minimum fees.
The Processing Fee is a transaction fee which we charge for arranging the sale of an invoice. It is calculated as a fixed percentage of the invoice face value and is payable on final settlement.
The Discount Fee is the fee which investors receive as a result of their purchase of an invoice. It is charged as a percentage of the face value of an invoice. It accrues daily up to settlement of the invoice with investors.
+ Do I need to provide security?
No. We are not interested in your real estate or plant and equipment assets. Our focus is the strength of your business and invoices. We understand the challenges of growing a business when you do not have the traditional asset security banks require.
+ How easy is InvoiceX to use?
We’re not like other investors or finance options who want to lock you into capital on their terms.
The way we see it, that generally just makes things harder for you. We do things differently by offering no lock-ins and complete freedom to choose which invoices you want paid forward and which you are happy to keep on existing terms.
And we make it simple. In fact, once you get started it takes just a few clicks to lock in the capital you need, when you need it. It’s this little difference that gives you the freedom to grow on your terms, not ours.
+ Will my customers know I am receiving early payment?
No – the process is totally confidential (unless you wish to make a disclosure or there is a default). This is unique in Australia – no one else offers this service.
The way we see it, invoices are your asset to leverage - so there’s no reason why selling them should mean selling your relationship or reputation along with it.
That’s why we keep all our transactions completely confidential. It lets you keep the invoices in your name, to follow up as you see fit - and that lets you stay in control of your client relationship.
So now you can relax about hurting your reputation, and just concentrate on building it.
+ How long does it take to get my money?
For registered users, you can trade within minutes and receive an advance against your invoice by the next business day.
+ How much does it cost?
We have an automated risk scoring process which is largely dependent on the size of your business and your customers. The more you grow and the more you trade, the lower the cost.
The bottom line is that we offer rates comparable to unsecured overdraft lending rates with a small additional fee to cover transaction processing. When compared with conventional debtor finance firms, our charges can be as low as half their rates. For a price indication, please refer to the Calculator on our website.
+ What sort of businesses do you finance?
A wide array of small to medium sized businesses, supplying goods and services to big businesses or government.
If you are a B2B business with large, good quality customers and ambitious growth targets, we can help you regardless of the business sector.
InvoiceX is strongly placed to help growing businesses given our focus on providing cash to deal with working capital pressures.
+ Does GST apply to the sale of my invoices?
Yes – GST is payable on the Processing Fee but not on the Discount Fee.
You will receive a Tax Invoice each time a Processing Fee is charged on settlements, as well as a regular statement.
+ What are the benefits over bank overdrafts?
Bank overdrafts don’t finance revenue growth; they look backwards not forwards. Overdraft limits are typically set based on your fixed assets including personal real estate. For many firms the biggest balance sheet assets are the amounts due from their customers (invoices). These are not fixed assets, so you can’t raise an overdraft against them. Also, increasing your overdraft is often difficult and requires lengthy bank negotiations. Plus, overdrafts can come with high and unexpected fees, which you only discover when you need the overdraft most.
+ What are the benefits over traditional factoring and invoice finance?
This type of finance locks businesses into a captive relationship, lacks innovation and is often inflexible to your needs. It provides whole turnover invoice discounting arrangements, not single invoice finance. There’s also a lack of confidentiality where factors take control of all of your customer collections. There are ongoing monthly service fees and high arrangement fees, contractual lock-ins with long notice periods and onerous security arrangements. You may also be exposed to having credit lines reduced with no notice at the whim of the funding provider.
+ How does InvoiceX provide a more flexible and fair solution?
InvoiceX bridges the gap beautifully by letting you sell invoices as often or as little as you want, only paying transparent transaction fees on each invoice sold. You sell invoices to sophisticated investment professionals via InvoiceX, they buy your invoices and advance funding to you quickly. You obtain the best pricing per invoice, rather than unilaterally across all your debtor book. With very few exceptions, InvoiceX lets you access funds, no matter what your industry. Put simply, InvoiceX lets you raise cash, not debt - quickly, simply and confidentially.
+ Is InvoiceX regulated?
InvoiceX has been built by experienced founders who are passionate about providing a better deal for ambitious businesses and investors.
As is the case overseas, invoice finance in Australia falls under asset based financing, which is not currently an activity regulated by ASIC. We would welcome regulation but you cannot choose to be regulated, as our regulatory advisers have pointed out.
More broadly, business finance is Australia is hardly regulated with very high level ASIC protections. A January 2013 government review confirmed this and recommended the following course:
"Targeted regulation would be introduced through a negative licensing scheme, improved disclosure requirements, universal access to external dispute resolution (EDR) and the introduction of a remedy for asset-stripping conduct."
InvoiceX does not invest any capital into invoices itself or on behalf of any third parties. Unusually, our founders' investment vehicles invest in every trade alongside our other investors on the same terms. InvoiceX only accepts Sophisticated Investors ("wholesale clients" within the meaning of the Corporations Act 2001) on its platform.
InvoiceX is the first and only SME finance provider of any type in Australia to reveal its loan book in full. We will continue to do this as we develop. We aim to provide the best terms in Australia for invoice finance.
Finance has been offered to SMEs on unfair terms for too long. Banks over-collateralise loans based on real estate, reduce or remove overdraft limits with little or no notice. Some non-bank lenders lock SMEs into onerous contracts, especially in invoice finance but also quite a few emerging online lenders that promise quick decisions at very high, unstated interest rates with penal early repayment terms.
This needs to change. We do not lock our customers into contracts. Businesses can quickly raise finance on just one invoice with no set-up fees on fair and transparent terms and are under no obligation to continue using InvoiceX afterwards. And it is a confidential service which does not involve the SME's customer.
Voluntarily at the outset, we set up a not-for-profit Special Purpose Vehicle to handle all transactions between Buyers (investors) and Sellers (SMEs) on our platform. The day-to-day management of this SPV in terms of settling trades and real-time accounting and reconciliations is outsourced to BDO, a Top 5 international accounting firm. Furthermore, we require regular internal auditing of the SPV as an additional layer of protection. All of this means that if InvoiceX ran into any difficulties, there is a robust system in place to handle the winding down of the platform or transfer ownership.
We voluntarily pay to be a member of the Credit and Investments Ombudsman, a free, independent and impartial external dispute resolution (EDR) service for our customers. It is approved by ASIC with over 20,000 financial services members in Australia.
We voluntarily maintain professional indemnity insurance although we do not provide financial advice.
We are supporters of significant efforts being made to create the Australian equivalent of the UK Peer-to-Peer Finance Association. This body would require members to operate by a strict set of rules in order to promote high standards of conduct and consumer protection.
We are members of Fintech Australia, a national not-for-profit organisation with a vision to make Australia the number one market for FinTech in Asia. Its key objectives are to support the Australian FinTech community, build awareness and trust in FinTech startups and to advocate for better policy on behalf of our members.
Finally, our two founders have worked in regulated industries throughout their 25-30 year careers, holding significant influence functions. We firmly believe in transparency, fairness and high standards of conduct.
+ How is your product different to factoring?
Factoring is disclosed so your customer knows that you need cash now and needs to consent to the arrangement. Factoring typically involves long lock-in periods and much higher costs. You hand over control of your sales ledger and collections.
Factoring has historically been associated with more challenging credit situations. By contrast, InvoiceX is focused on high quality ambitious businesses, dealing with rapid growth.
Our product is totally confidential, has no lock-ins, is totally flexible in how much you use it and you remain responsible for chasing payments from your customer.
+ What if I only want to trade some invoices due from a particular customer, not all?
On our Match Maker Trading Platform™ you choose which invoices you would like to trade, and which invoices you would like to leave on existing terms.
For invoices that you trade we will provide a cash advance (up to 80% of the Face Value of the Invoice) by the next business day.
For those invoices that you wish to leave on existing terms, the funds will immediately be transferred to your nominated bank account when your customer pays, as they normally would.
+ What is a 'Trade'?
A trade comprises one or more Eligible Invoices due from an Eligible Debtor (ie an approved customer of yours) where the expected payment date is on or around the same date and against which you decide to raise funds under your facility. The expected payment date is not subject to a 90 day limit from invoice date, as usually applied by traditional debtor finance firms.
+ What does InvoiceX consider an Eligible Debtor?
Eligible Debtors are major corporates, blue chip and multi-national companies. Government bodies or organisations owned or funded by Federal, State or Local Governments are also eligible debtors. Examples of Eligible Debtors are companies such as Telstra, Woolworths and BHP, or multi-national companies such as Ford, Kraft and Unilever.
+ What does InvoiceX consider to be an Eligible Invoice?
An Eligible Invoice is a final invoice due from an Eligible Debtor. A final invoice relates to delivered goods or where works and services have been carried out according to the contract of sale (or purchase order) and accepted by the customer. Invoices for progress claims or partial deliveries are not considered to be Eligible Invoices.
+ Can I settle a trade early before my debtor pays with my own money?
Yes, if you have an open trade on the Match Maker Trading Platform™ that is awaiting settlement from your debtor, then you are free to settle that trade early with your own funds at any point. We like to keep things flexible.
+ What if I decide to close my InvoiceX account?
We don’t lock you in to anything. There is no penalty to close your account with InvoiceX. Although, it’s always good to have a contingency plan in place for those times when there are unexpected dips in cash flow, and since there is no cost unless you use it, why close it?
+ What if my debtor doesn't pay on time?
If a situation occurs where an invoice is not going to be paid on the expected payment date by your client for whatever reason, InvoiceX must be notified us as soon as possible.
We provide you with the option to either repurchase the invoice with your own funds or swap it for an invoice of equivalent value.
The key in these situations is good communication.