01
What is actually funded
An invoice, a ledger, a shipment or simply the business. It is the fact everything else follows from.
Working capital
Eight facilities, compared properly.
The same cash gap can be funded eight different ways, and the differences are about what the funder is looking at, how the money is repaid, and whether the facility is there again next cycle. One page per facility, each covering what it funds, how it is priced, and who it actually suits.
Working capital loan
A working capital loan borrows a fixed amount against the trading position and repays it on a fixed schedule. It suits a gap the business can size, and it is the wrong shape for a gap that opens and closes.
Read onShort-term working capital loan
A short-term facility compresses a term loan into three to twelve months, frequently with daily or weekly repayments and a fee rather than a rate. Both of those change the arithmetic in ways the headline number hides.
Read onMerchant cash advance
A merchant cash advance is repaid as a share of daily card sales rather than on a schedule. Quiet weeks cost less and busy weeks cost more, and the term is whatever the takings make it.
Read onInvoice finance
Invoice finance funds the gap between issuing an invoice and being paid for it. It is not a loan against the future. It is an advance against work already done and already billed.
Read onInvoice factoring
Factoring advances against invoices and then collects them. The customer is told, the funder chases the payment, and the credit control function leaves the business along with the risk of doing it badly.
Read onDebtor finance
Debtor finance funds the whole receivables book as a revolving facility. The available limit is recalculated from the ledger rather than fixed at the start, which is what makes it behave differently from every other facility a business is offered.
Read onTrade finance
An importer pays before shipping and gets paid long after arrival. Trade finance funds that window, which is commonly the longest and least visible cash gap an importing business carries.
Read onSupply chain finance
Supply chain finance is arranged by the buyer for the benefit of its suppliers. The supplier is paid early at the buyer’s credit rating, and the buyer keeps its own payment terms. Both sides gain, which is why it exists.
Read onHow to use these
Two questions narrow eight facilities to two.
The eight pages on this hub describe facilities that all do the same underlying job. A business has spent money it has not yet received, and somebody funds the space in between. What differs is what the funder is looking at, how the money is repaid, and whether the facility is there again next cycle.
The first question is whether the gap closes on its own. A gap that is an event has a size and an end, and a term facility matches it. A gap that is a condition reopens every cycle, and a facility that repays to zero funds the last one rather than the next. That distinction rules out half the list in most cases.
The second is what the business has to offer. A receivables ledger points at invoice finance, factoring or debtor finance, all of which are cheaper because the funder has something to assess beyond the trading position. Card takings point at a merchant advance. Neither, and the answer is an unsecured facility priced for a lender with no fallback.
Two of the eight sit slightly apart. Trade finance and supply chain finance both fund goods moving between businesses rather than a domestic timing gap, and an importer selling on credit terms genuinely needs one of them alongside a receivables facility rather than instead of it.
What is on every page
The same seven questions, answered per facility.
Every page in this tier answers the same set, so two facilities can be compared without reading both end to end.
02
How it is priced
A rate, a fee, a factor or a discount, and what each is charged on. Quoting conventions differ enough to make offers uncomparable.
03
What the repayment looks like
Scheduled, at the business’s discretion, or taken automatically. This is what determines whether a facility fits a trading pattern.
04
What a lender assesses
Which document carries the file, because it differs between an unsecured facility and a receivables one.
05
What it costs in comparable terms
Every page converts its pricing into a figure that can be set beside the others rather than leaving the convention in place.
06
What happens when it goes wrong
Recourse, concentration caps, over-advances and the specific failure modes of that facility.
07
Where it does not fit
Every page says who should be looking at something else, because a product page that only sells is not much use.
The honest limit
What this site cannot tell you.
Every rate band on this site is indicative. Nobody publishing a website in New Zealand can say what a specific business will be charged, because the price is a function of trading history, customer quality, concentration, dilution, volume and a credit assessment, and only the funder sees all of them. The bands here describe a market rather than an offer.
The tax framing has a harder limit. GST timing, the treatment of trading stock and how a facility interacts with a business’s position all depend on facts a website cannot see, which is why every tax statement carries the accountant caveat in the same sentence as the claim rather than as a formality at the bottom of the page.
This site is an education site and a calculator. It is not a lender, a broker or a registered financial adviser, and nothing on it is personalised financial advice.
FAQ
Working capital facilities, the general questions
How many facilities are there really?
Fewer than the names suggest. Invoice finance, factoring and debtor finance are three versions of funding a receivables ledger, and a working capital loan and a short-term loan differ mainly in duration and pricing convention. Understanding four of the eight well covers most situations.
Which facility is cheapest?
Receivables-based ones are ordinarily cheaper per dollar than unsecured lending, because the funder has a ledger to assess. Beyond that the comparison depends entirely on fee structure, and a discount rate quoted per thirty days is not comparable with an annual rate.
Can a business have more than one?
Frequently, and it needs care. Two facilities secured on the same assets have to be resolved with each funder, and a general security agreement held by one lender can prevent another from taking the position it needs. Disclosing everything early avoids a late problem.
Does taking a working capital facility affect other borrowing?
Yes. Existing facilities are visible to any lender assessing a new application and count toward total commitments, and a general security agreement can affect what other lenders will take security over. Both are ordinary and both are worth knowing before rather than after.
How quickly can a facility be arranged?
It varies by facility, by funder and by how complete the file is, and this site does not publish timings. Unsecured lending is generally fastest to arrange and most expensive; receivables facilities take longer to establish and are quick to draw once running.
What is the most common mistake?
Using a term facility for a recurring gap. It funds the last cycle rather than the next, has to be repaid out of the same trading that created the gap, and frequently leads to a second facility alongside the first.
Is security always required?
Not always, and a general security agreement over the business is common on receivables facilities and on larger unsecured ones. A personal guarantee is common on unsecured facilities regardless of whether asset security is taken.
Does this site arrange any of these?
No. It is an education site with a calculator and one disclosed referral to Prospa on the calculator. There is no contact form, no application, and no personal details are collected anywhere on the site.