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Invoice Finance: A better way to finance your business than bank loans

New Zealand banks are earning a lot of money and are not hesitant to charge their customers high-interest rates. If you're a business owner, you're probably feeling the pinch. You may be tempted to use your mortgage to finance your business, but there's a better option: invoice finance.

Invoice finance is a way to get the money you're owed from customers quickly, without waiting for them to pay. You simply finance your invoices with a finance company receiving up to 80% of the value immediately. Your clients paying their invoices as normal repays the facility, you just pay the interest.

There are several advantages to using invoice finance over a mortgage to finance your business:

  • Faster access to cash: With invoice finance, you can get the cash you need within days, rather than weeks or months. This can be a lifesaver if you're facing a cash flow crunch.
  • No mortgage security required: With invoice finance, you don't have to put up your personal assets as collateral. This means that you don't risk losing your home or other assets if your business fails.
  • No fixed repayments:The facility gets repaid by your customers making their payments as normal.

If you're a business owner who is looking for a way to finance your business, invoice finance is a great option. It's faster, cheaper, and more flexible than a mortgage. And it won't put your personal assets at risk.

Here are some additional reasons why you might want to consider invoice finance over a mortgage:

  • You have a good credit history but your business is new or has a limited track record. Banks may be reluctant to lend to you. In contrast, at Lock Finance, we are more likely to be open to your application.
  • You need additional cashflow quickly. Mortgages/business loans can take weeks or months to process, but Lock Finance’s invoice finance can be approved in days.
  • You want to avoid putting your personal assets at risk. With invoice finance, you don't have to put up your home or other assets as collateral.
  • You want to have a facility that continues to grow as your sales increase or one that keeps reducing and looks back at what you did last year?

Do you want to have to keep a high level of equity in your business just to keep the bank happy? With invoice finance you do not need to.