What is The Invoice Market?

The Invoice Market (or tim., as most refer to us) is an innovative, easy, and affordable way of helping you get your hands on tomorrow’s cash flow today. tim. provides three market leading and innovative cash flow solutions and taps into a network of sophisticated institutional and private investors who provide the capital required to fund business without the hassle and restriction applied by banks and factoring companies.

Is this an unsecured loan?

tim. is not lending you money, which requires regular weekly or monthly repayments and thus an ongoing liability.

tim’s innovative cash flow solution, using debtor funding, can free up your working capital and tim. requires no property security as collateral.

tim’s funding to your business is an advance against the invoice value, with 80% of the invoice value advanced on funding date with the remaining 20% paid to you (less a small pre-agreed discount fee) when your debtor pays the invoice. So unlike a loan, you are not locked into daily, weekly, or monthly repayments; in fact, there are no repayments at all, and you can use the facility as often or as little as your business cash flow requires.

A loan that requires regular repayments can actually cause greater cash flow constraints on your business. Furthermore, a loan sits as a liability on your balance sheet, which may restrict your capacity to borrow funds for an acquisition such as plant and equipment. Importantly, it is difficult to solve a cash flow problem by the creation of further debt and thus another cash flow problem. It is for this reason using invoice funding is often a far smarter way to bring forward cash flow today than it is to borrow money.

What is Invoice Financing?

It may sound complex, but in fact, it is very straightforward. Your business issues invoices, and these are assets. And as you know, assets can be bought and sold.

The process of unlocking cash flow against your unpaid invoices — also known as invoice financing, invoice discounting, or factoring — is the sale of these assets (the unpaid invoice/s) at a discount to the face value of the invoice in order to speed up the cash flow for your business.

It’s similar to offering a discount on your invoice to a debtor if they paid you on time.
But as we know, offering debtors discounts to speed up payment rarely works.

With tim., you can elect to raise cash flow finance with one, multiple, or all of your invoices.

The choice is yours. Always.

Giving you greater control.

Why do businesses use invoice finance?

To release cash flow from their Debtor Ledger rather than waiting for their debtors to pay them, these funds can then be used to run and grow the business.

It is the same concept as offering a debtor discount if they pay the invoice quickly, and it allows businesses to obtain an advance of up to 80% of the invoice value without being contractually committed to discount every invoice, as occurs with traditional factoring products.

What is “peer-to-peer funding” (P2P funding)?

It is a way for sophisticated private investors and institutional funds to advance money directly to other businesses.

On one side of the ledger you have businesses needing finance to grow, while on the other side, you have investors ready to lend money.

What’s needed is a facilitator, like tim., to provide a platform and credit-checking service that connects the two communities in a reliable and easy way, thus creating a very efficient market, making it simpler for businesses to access a cash flow without going through the usual hassle of a bank. The main advantages are:

  • A quick, online application process
  • No application fees, upfront fees, monthly fees or other hidden fees
  • No bank managers looking over your shoulder
  • Gain the finance you need faster
  • Businesses know exactly what they’ll have to pay up front
  • Friendlier – we’re always here to chat if you need help and, unlike your bank, won’t keep you on hold for hours


What is a “pre-agreed discount rate”?

From time to time, most businesses have offered their slow-paying debtors a discount for paying their invoices promptly. That is a pre-agreed discount rate. (E.g. “Please pay this invoice in full by the 15th of the month to receive a 10% discount.”)

But simply writing this on your invoices rarely works.

So tim. has developed a way to get your cash flowing faster by providing access to funding from many investors. Investors who will pay you 80% of your invoice/s value upfront in cash. The rest is then paid to you once your debtor pays their invoice in full — minus their pre-agreed discount rate, which you have agreed to before entering into the arrangement.
This pre-agreed discount rate usually ranges between 5% down to as little as 1% of the invoice value. And no hidden fees or surprises.

A lot better value than offering that 10% discount.

Plus — it works.

How does invoice finance (like tim.) differ to “old-school” factoring?

While invoice finance is the sale of an asset (being the unpaid invoice); factoring is a debt facility secured against the value of the borrowers Debtor Ledger. Being a debt facility, the approval process to obtain factoring finance is significantly more onerous with rigorous lending criteria. This means many businesses may not qualify for factoring, when they may well qualify for Invoice Finance.

So invoice finance provides far greater flexibility than factoring because it enables you to raise cash flow against single or multiple invoices when needed, without entering into lengthy and potentially expensive “lock in” contracts.

That’s because invoice finance is on revenue account and is accounted for through the profit and loss of the business. Whereas a factoring facility is a debt facility and is a liability on the balance sheet.

So what is a “factoring facility” in more detail?

Because a factoring facility is a Debt Facility, the approval of the facility is therefore subject to the stringent criteria for approval of a debt facility. It also has ongoing criteria regarding debtor exposure limits and requires that every invoice issued by the business is factored. Furthermore even if an invoice is deemed “ineligible” (for example, if it’s over a Debtor exposure limit or issued to a non-approved Debtor and therefore no funds may be drawn against it) the facility provider will still hold that invoice as collateral security against the facility.

In some cases, the lender may even require property security as collateral for the facility.

A traditional factoring provider charges a base rate plus a margin rate. In addition to this, a full-factoring facility provider may also charge:

  • An arrangement fee
  • A monthly service fee
  • Late payment fees
  • Debtor insurance fees
  • Liquidation fees
  • Audit charge-backs
  • Bank transfer and other administrative fees

Additionally, most factoring facilities are also legally binding for 12-18 months.

Now compare the above to tim..
With tim. you only raise cash flow against the invoices you want to sell.
Plus there aren’t any restrictive covenants nor the need for additional security. More good news, there are no ongoing monthly service fees or unused facility fees.

And where factoring does not accept certain invoices or may decline your application, once you and your debtor are both approved by tim., you can post any invoice on our platform for cash flow funding.
tim. can also work with you to help you manage your Debtor Ledger to maximise the benefit and reduce the cost of cash-flow funding.

So should my business use invoice finance (like tim.) or factoring?

It really depends on your business and what its cash-flow needs are. If your business has a requirement to cash flow every invoice you issue every month, then a full-factoring facility may be more appropriate for your needs.

However, the beauty of invoice financing is the flexibility that it brings through the selection of invoices that you wish to raise cash-flow against.

With tim., there are no lock in contracts or debtor exposure issues.

As such, tim. is generally used by:

  • Businesses in their early years as they may not meet the stringent lending criteria imposed by banks and are unable to qualify for debt finance (such as a factoring facility)
  • Businesses that are going through a growth phase that may only need to sell invoices for six to eight months, for example during the implementation of a new project, and do not wish to take on debt and/or be locked into a 12-18 month contract to factor every single invoice
  • Businesses that wish to retain control of their Debtor Ledger but would like to access the value of their unpaid invoices
  • Business owners do not wish to offer property security as collateral against a debt facility

Invoice finance can also work in conjunction with a debt facility such as a factoring facility or a business overdraft.

In Australia, invoice financing is becoming increasingly popular. For example, during the quarter ending September 2015, the invoice financing turnover was $14.5 billion and the factoring turnover was $1.3 billion.*

*Debtor & Invoice Finance Association Update – December Quarter 2013.

How much money will we get using tim?

Typically, you receive up to 80% of your invoice/s value up front, in cash.
You then receive the balance of each invoice, less the agreed discount rate, when your debtors pay each invoice.

Who can use tim?

Any business with an Australian Business Number (ABN) that is supplying goods or rendering services to other Australian businesses. Call 1300 MYINVOICE to check whether your business is eligible.

How much does tim. cost?

tim. has no application fees.
No set-up fees, on-going fees, monthly fees or other dubious ways to take money from businesses.
All you pay is a pre-agreed, low discount rate on the invoice amount.
Simple. And fair.
The typical discount fee is between just 1% – 5% of the invoice/s face value.
That’s it!

How long will it take before you receive the funds?

If you are a new client, it will take approximately two business days from you submitting your completed application and supporting documents for us to assess your application to become an approved client on the tim. platform.
As soon as you’re approved, you can then upload your invoice/s for sale.

Is this process new?

Invoice Financing is not new. It’s a tried and tested cash flow method that’s proving very popular.
In Australia for the quarter ending September 2015, the invoice discounting turnover was $14.5 billion, with over $64.2 billion for the full year.

The way tim. facilitates the funding transaction is new.

tim. is the first online peer-to-peer funding platform for the sale of invoices within Australia. There are also market-based platforms operating successfully in the USA, the UK, Germany, Denmark and Sweden. These web-based markets have seen the cost of invoice cash flow funding reduce significantly as a result of increased competition.

If we use tim., will our debtors think that our financial position is unsatisfactory?

Certainly not.
It’s a practice that’s so well established and commonplace, your debtors are probably already dealing with other clients using tim. or some other debtor finance provider.
They may even use it themselves.
In fact, over $64.2 billion was funded via factoring and invoice discounting in Australia in the year ended September 2015*. Debtor finance is now accepted as a commonplace business financing tool for companies. Many business owners look at it as the smart alternative to debt facility.

* Debtor & Invoice Finance Association Update – December Quarter 2013 Report “Receivables finance in Australia is increasingly viewed as a mainstream funding alternative provided by a broad spectrum of banks and financial institutions, whereas a decade ago it was a niche product generally offered by specialist non-bank providers. This transformation will continue to deliver substantially higher volume transactions. The client base is expanding beyond the SME sector to include medium sized corporates and smaller listed companies, with annual turnover in excess of $A500 million.” Page 7, Factoring and Discounting in Australia, David Thorpe, Executive Officer, Debtor and Invoice Finance Association

Into what account does my invoice payment get paid?

When you raise cash flow with tim., the initial cash flow – 80% of the invoice value – is paid directly to your business operating account.

When your debtor (trade debtor) pays the full invoice amount, it is paid into a Trust Account held with Australian Executor Trustee. Once the funds are received from your debtor, the Custodian will remit the remaining cash flow, 20% of the invoice value (less the pre-agreed discount fee), to your business operating account by the next business day.

Who is the Australian Executor Trustee?

Australian Executor Trustees (AET) is one of Australia’s largest and most experienced trustee companies, who have been providing professional trustee services for over 130 years. They are part of the IOOF group, a leading provider of wealth management products and services in Australia and are listed on the Australian Securities Exchange in the top 200 listed ASX companies. IOOF provides services to around 650,000 debtors nationally.

As a corporate trustee or custodian AET are either the legal owner of, or hold security over, assets and financial instruments on behalf of their clients as well as providing administration and supervisory services. They provide custody and trustee services for a large range of investment products including:

  • Property syndicates
  • Listed property trusts
  • Equity and fixed interest trusts
  • Mortgage trusts
  • Agricultural schemes
  • Retirement villages
  • Fund of funds
  • Structured finance transactions
  • Securitisation transactions
  • Note issues

For more information visit www.aetlimited.com.au

What happens if my debtor does not pay an invoice that I have sold to tim. and have been given money for?

If an invoice you have sold on the tim. platform is not eventually paid by your debtor, you will have to refund the amount paid to you, plus the discount fee for the number of days you have had the funds or potentially swap the unpaid invoice for another invoice/s that you have issued to another one of your debtors.
In technical terms, the invoice sale is recourse to you in the event of non-payment by your trade debtor.

Is tim. too complex and administratively difficult for me to operate?

tim. has been designed to help your business.
As such, it is very simple and easy to use.
And because it’s a web-based application you can access it whenever and wherever you need to. You simply upload your invoice/s and supporting documentation to us. It’s that easy. (And contrary to whole turnover factoring facilities, there is no requirement for you to run a separate ledger.)

Is my financial information secure? Who can see it?

tim. is completely secure. It uses the timEx platform so no party other than our registered funders (when logged in) are able to view your financial information.

Our registered funders consist of institutional investors, qualifying High Net Worth Individuals or SMSFs. All funders registered on our platform have been thoroughly assessed by tim. and have signed up to strict confidentiality agreements for the information they are able to access on individual businesses and invoices. They are only able to use this information to decide whether to buy an invoice, and are legally forbidden to share this information with any third party.

What if our business has already borrowed from a bank, can we still use tim.?

Of course you can. tim. regularly deals with many financial institutions.
As such, we can work with your bank or financier to implement a funding solution appropriate to your needs and that of your financier.

If we use tim., can we still borrow money from other sources?

Because rather than lend money, tim. instead provides an online funding platform for the purchase of assets (unpaid invoices) from you.
Quite often a business will use tim. in conjunction with a business overdraft or other debt facility.

I’m already using invoice finance so why would I change to a market-based solution like tim.?

Chances are, you’re probably paying too much at the moment.
With tim., you have far more likelihood of attracting funding at more competitive rates because of our multiple funders and market-based pricing.
In contrast, the funding that banks and factoring companies provide are not as certain because they are able to cut lending facilities or stop purchasing invoices altogether overnight.

What is the assessment procedure for your new clients? Would my business have to go through a credit check?

Yes, tim. does carry out a checking procedure prior to any business trading its invoices on the platform. And not every company is accepted.
There are significant checks for credit record, fraud, other debentures/charges/security given, sales terms and conditions, etc.
Additionally, your invoices must be issued directly to a business debtor rather than to an intermediary or a consumer.
We also maintain strict adherence to Australian Privacy Principles, which we will be happy to guide you through. This process is relatively quick and efficient.

If no one funds my invoice what is the next process?

During your registration chat with us, our team will help you identify those invoices that are likely to attract buyers versus those that may not.

In the unlikely event your invoice or pool of invoices does not attract a funder, tim. will review the parameters you set. If your client is not highly rated, we will attempt to match that transaction with specific funders who have a greater appetite for risk.

What is the pre-agreed discount rate I can expect?

You can expect to see discount rates significantly lower than other single invoice discounters because of the competitive platform provided by tim.. Usually ranging between just 1% – 5% of the invoice value.

Most other providers of single invoice funding charge fees from a “rate card” based on a sliding scale and charge excessive insurance premiums. In the Australian Market, this ranges from 6.5% to 12% of the invoice value and increases depending on how long it takes to collect the payment from the debtor.
But not with tim.
We do not use a “rate card” as each transaction is individually priced, ensuring highly competitive and flexible funding. Funders look at the size and strength of the invoice, your company’s quality and that of your client/s. The lower the risk, the lower the discount rate.

What size does an invoice need to be to sell on the market?

Each invoice you post on tim’s platform needs to be at least $5,000 (incl. GST).
However, there is no upper limit on the size of the invoice. For example, we currently have a client who is funding $4-million per month via the platform.

What kind of debtors are acceptable on tim.?

Not all debtors are acceptable for funding on tim’s platform.
tim. does not allow businesses to trade invoices that are to consumers (B2C). And we assess each invoice and debtor on a case-by-case basis. The decision to allow an invoice to be posted on tim. rests solely with us.
Some broad parameters on our assessment criteria are provided below:

  • Ownership: Invoices issued to any business with an ABN are acceptable. The stronger the credit worthiness of your debtor, the more competitive the discount rate will be
  • Size: Your debtor can be of any size, but we would expect them to have annual revenues in excess of $250,000
  • Credit worthiness: We undertake credit assessments of your debtors. Businesses that we assess are likely to go into administration or bankruptcy will not qualify as debtors with tim.
  • Profitability: Ideally your debtors will be producing annual profits, but this is not an essential requirement. Every debtor will be individually assessed and feedback provided to you usually within two working days
  • Geographical location/domicile: All businesses operating in Australia are eligible. Your overseas debtors may also be acceptable on a case-by-case basis. Obviously, businesses that are based in countries that have significant fraud or money-laundering histories are likely to be rejected


Is there an absolute limit on the time taken for collection?

Given the platform is online, it can handle a range of invoices. But if you have an unusual trading circumstance, it’s best to consult with us in advance so that we can solicit funder feedback and honestly assess their appetite.

Will my debtors know that I have sold their invoice?

Yes, your debtor whose invoice you wish to sell will be aware that you have sold the invoice as we ask them to verify it first. However, debtor or invoice financing, like tim., is such a common form of short term finance in Australia (estimated at over $64.2 billion annually) that it’s become an accepted part of the trading process.
You may well find that your debtor also uses this form of cash flow financing.

Will tim. contact any third parties to process my application to register?

We do not contact any external parties other than the usual public credit and business record places. And please note, applying to tim. does not in any way affect your credit rating. We may need to make contact with either your bank or your debtor once you are accepted onto the platform. This, of course, is never done without your consent.

Can tim. collect old accounts for me?

No, we are not a debt collection agency. However, tim. has a specialist business partner who may be able to assist you in this regard. Feel free to call us for a free introduction.

Can we sell our consumer debts on the platform?

No, we only deal with business-to-business transactions.

How can I be sure that my invoices will be bought?

While we cannot guarantee that your invoice will be funded, the team at tim. will work with you to best understand which of your invoices have the highest likelihood of attracting interest from our funders. With our diversified group of registered funders and their different funding appetites, we are more than confident that any reasonable invoice will be funded.