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On a small screen, scroll the table sideways to see every column.
| Compare | Why it matters |
|---|---|
| Eligible invoices and customers | Not every receivable qualifies; concentration and age limits may apply. |
| Advance and reserve | The advance is the initial cash, not the final amount you keep. |
| Interest and service fees | Charges may depend on time outstanding, turnover or minimum usage. |
| Collections and disclosure | Establish who contacts customers and which account receives payments. |
| Recourse and disputes | Find out when you must repay or replace an unpaid invoice. |
| Term and exit | Check minimum fees, notice periods and release of security. |
How the money moves
You issue an invoice for work or goods supplied. If the invoice qualifies, the financier advances an agreed proportion. When the customer pays, the remaining amount is released after charges and any agreed adjustments. Exact arrangements vary.
For illustration, an 80% advance against a $10,000 eligible invoice provides $8,000 initially. The other $2,000 is a reserve, from which charges may be deducted before the balance reaches you. Neither the 80% nor a particular fee is universal.
Decide how much of the ledger you want to finance
A selective facility may fund individual approved invoices; a whole-ledger arrangement covers a wider book under agreed rules. The right comparison includes minimum charges and administration. Financing one occasional invoice and financing a steady payroll gap are different jobs.
Ask the provider to price a normal month using your invoice ledger. Identify invoices excluded because of age, disputes or customer concentration, then show the net cash available after reserves and charges. The advertised advance percentage is less useful if it applies to only a small part of your sales.
Factoring commonly includes collections, while invoice discounting commonly leaves more collection work with the business. Providers use the terms differently. Establish who contacts customers, handles disputes and receives payments, and whether customers are told about the arrangement.
Find out which invoices will actually release cash
Give the provider a representative aged-debtors ledger and ask it to identify eligible and excluded amounts. An overall ledger balance is not a lending base until the rules are applied. A provider may treat old invoices, disputed work, related-party debts, foreign customers or a large single debtor differently; obtain the actual policy for your facility rather than assuming all credit sales qualify.
Credit notes and part-payments also matter. If the invoice is reduced after funding, establish how the advance and reserve are adjusted and whether another invoice or cash repayment is required. A construction invoice subject to retention or certification needs a different assessment from an undisputed invoice for delivered stock.
For illustration, a $100,000 ledger with only $70,000 eligible and an 80% advance produces $56,000 before other deductions. Applying 80% to the full ledger would overstate initial cash by $24,000. These are assumed rules to show the mechanism, not standard advance terms.
Decide whether the collection arrangement fits your customers
Ask which bank account customers pay, whose name appears on notices and who deals with reminders and complaints. If the facility is disclosed, prepare an accurate explanation of the payment change. If confidentiality is offered, read the conditions and what events could require disclosure.
Keep responsibility for disputed work clear. A financier collecting an invoice does not take over the supplier's obligation to deliver what the contract requires. Someone in the business still needs to resolve credits, returns and service problems quickly; those issues can affect both customer relationships and available funding.
Who pays if the customer does not?
Under a recourse arrangement, the business may remain responsible for an unpaid invoice. Non-recourse wording needs careful reading too: protection may apply to defined events and exclude disputes, offsets or breaches of the agreement. Do not treat it as a guarantee that every invoice will be paid.
Concentrating sales in one large customer can affect the amount available. A $100,000 invoice ledger does not necessarily support the same advance as a diversified ledger of the same size.
Compare the charge at the expected and delayed payment dates
An invoice facility can combine a service charge with a cost based on the amount drawn and time outstanding. Minimum monthly charges, audit or setup fees can matter for a small or irregular ledger. Ask the provider to price the same invoice at 30, 60 and 90 days if those are realistic payment outcomes.
For a simplified example, an $8,000 advance with a $100 service charge and a financing cost of $80 per month costs $180 if repaid after one month, or $260 after two months. The later payment costs more without producing a larger invoice receipt. Actual fee methods vary; this example only shows why collection time belongs in the comparison.
The IBA invoice-finance description illustrates separate management and drawn-funds interest charges (checked 5 October 2026). It is one product example, not a rule for every provider.
Allow for administration and the eventual exit
Expect to maintain reliable invoice and ledger records, report collections and adjustments, and supply the information the financier requires. Estimate that work before comparing the fee with a conventional loan. A business with weak invoicing records may need to repair them before the facility can be useful.
Check minimum terms, notice, outstanding advances and release of security when changing providers or closing. If customers already pay a financier-controlled account, plan the transition so receipts are not sent to the wrong place. Ask how an existing lender's security will be handled before assuming two facilities can coexist.
When we would compare it with a loan
Compare the cost over your actual collection period, including minimum and service charges. Where reliable business customers pay slowly but payroll falls due weekly, compare the resulting cash availability with a line of credit on the same forecast.
Provider examples: compare the eligible advance, not just the headline
Published information checked on 10 October 2026. Earlypay advertises advances up to 85% of the accounts-receivable ledger. IBA’s business-finance factsheet describes invoice financing up to 80% for eligible customers. These are ceilings subject to approval and eligible debts, not an advance against every invoice.
On an illustrative eligible $100,000 ledger, an 85% advance produces $85,000 before fees and reserves. If $20,000 of that ledger is excluded, the same percentage applies to $80,000 and produces $68,000. That $17,000 difference can matter more than a small difference in the advertised advance percentage.
Timelio’s own site says it joined Earlypay on 13 November 2023. It should not be counted as an independent current competitor. Ask any provider for the finance charge, service/minimum fees, debtor-concentration limits, recourse terms and collection arrangements in writing.