Cash flow is the lifeblood of every business. Whether you’re waiting on invoices to be paid or trying to cover expenses, having fast access to working capital is critical. Two popular solutions are debtor finance and business loans—but which one suits your needs best?
At Capital Plus Finance, we specialise in helping Australian SMEs unlock working capital through flexible finance solutions. In this guide, we break down the pros, cons, and best use cases for both.
What is Debtor Finance?
Debtor finance—also called invoice finance—lets you access funds tied up in your unpaid customer invoices. Rather than waiting 30, 60, or even 90 days to get paid, you can get up to 85% of the invoice value within 24 to 48 hours.
You continue to manage your customer relationship, and once the customer pays the invoice, the remaining funds (minus fees) are released to you.
Best suited for:
- B2B businesses that issue invoices on terms
- Companies with strong sales but slow-paying clients
- Trades, transport, labour hire, and wholesale industries
Benefits:
- Improves cash flow predictability
- Scales with your business turnover
- Doesn’t require property as security
- Keeps your equity intact
What is a Business Loan?
A business loan provides a lump sum that’s repaid over a fixed period—anywhere from 6 months to 5 years. It’s often unsecured, meaning you don’t need to offer property as collateral, but stronger applications may access better terms.
Best suited for:
- One-off investments (new equipment, renovations, stock)
- Cash flow gaps during growth phases
- Marketing or hiring campaigns
Benefits:
- Predictable repayments
- Can be used for nearly any business purpose
- Can help build credit profile
- Often fast approvals (within 24–48 hours)
Key Differences
| Feature | Debtor Finance | Business Loan |
| Funds Access | Ongoing, per invoice | One-off lump sum |
| Security Required | Uses invoices as security | May be unsecured or secured |
| Flexibility | Grows with sales volume | Fixed amount |
| Speed | Within 24–48 hours | 1–3 business days |
| Repayment Type | Customer pays invoice | Set repayments |
| Best For | Managing receivables | Project-based funding |
Which One Is Right for You?
If your business regularly invoices clients and experiences cash flow delays, debtor finance might be the better solution. It grows as your business grows and doesn’t add debt to your balance sheet.
If you need a specific amount of money upfront and want set repayments, a business loan offers simplicity and certainty.
How Capital Plus Finance Can Help
Every business has different needs. That’s why we partner with over 50 lenders across Australia—giving us access to flexible, competitive funding solutions tailored to your industry and goals.
Whether you need a quick working capital boost, a scalable invoice finance facility, or help figuring out which option fits your needs—we’re here to help.
Let’s Chat
Want help choosing between debtor finance or a business loan?
👉Book a meeting with a Capital Plus Finance expert and let’s find the right solution for your business today.
