Invoice finance · IT and technology
Invoice finance for it and technology
IT and technology finance is lending to managed service providers, software businesses and IT resellers, funding hardware for client deployments, software and licence costs, and the working capital of recurring-revenue models.
How invoice finance works for it and technology
IT resellers and project-based integrators often have a debtor book full of solid corporate and government clients paying on 45 or 60-day terms. Invoice finance advances against those invoices on issue, releasing the cash tied up in completed deployments. Debtor quality is excellent in this sector, which means competitive advance rates. It works less well for pure subscription businesses, where there is no lumpy invoice to advance against — recurring-revenue lending or an unsecured facility fits those better.
The cash-flow pattern we plan around
Hardware and licence costs paid on 30-day distributor terms against client invoices settled 30–60 days later, or recurring monthly revenue that recovers up-front costs across a multi-year contract.
What it and technology typically fund
- Servers, networking and endpoint hardware for deployments
- Software licences and subscription costs
- Funding hardware sold on as-a-service contracts
- Hiring engineers ahead of contracted revenue
- Office and lab fit-out
Invoice finance for it and technology: the numbers
| Typical amounts | $20,000 – $5,000,000 |
|---|---|
| Term | 1–12 months |
| Indicative rates | 8% – 18% p.a. |
| Repayments | Settled when the customer pays each invoice |
| Speed | 24–48 hours per invoice once set up |
| Documents it and technology usually need | ABN and two years of financials or 12 months of bank statements · Contracted recurring revenue schedule · Distributor quote or purchase order for hardware |
Rates are indicative, change without notice and depend on the lender, product, asset, term and your credit profile at the time of application. They are not an offer of finance. Comparison rates, where shown, are true only for the example given.
Key terms
Technology finance
Technology finance is lending for IT hardware, software licences and cloud services, often structured so that a three-year hardware purchase is repaid over the same term as the client contract it supports.
Recurring revenue lending
Recurring revenue lending is an assessment approach that sizes a facility against contracted monthly subscription income and customer churn rather than against physical assets or historical profit.
What is invoice finance?
Invoice finance (also called debtor finance or receivables finance) advances a percentage of an unpaid invoice’s value now, with the remainder paid when the customer settles, minus the financier’s fees.
Invoice finance vs invoice factoring
Factoring sells the invoice to the financier who collects from your customer; invoice discounting keeps collections with you and is usually confidential. Both are forms of invoice finance.
Questions from it and technology
How do managed service providers fund hardware for client deployments?
A technology finance facility or trade finance pays distributors for hardware and licences on 30-day terms, and invoice finance or a line of credit carries the cost until the client pays 30 to 60 days later. For recurring-revenue contracts, some lenders fund the up-front cost against the contract’s monthly income over its term.
Can a software business borrow without physical assets?
Yes. Unsecured business loans and lines of credit are assessed on recurring revenue, bank statements and trading history rather than assets, and some lenders offer facilities against annual recurring revenue for subscription businesses. A director’s guarantee is usually required. A broker matches the lender to your revenue model.
Can I offer my clients equipment as a service using finance?
Yes. Resellers and MSPs can set up rental or operating lease programs so clients pay a monthly fee for hardware and support while the lender funds the equipment upfront, which turns one-off sales into recurring revenue. Lyft Money can introduce vendor finance programs suited to your volume.
What do lenders look for in an IT business?
Recurring revenue and contract length, consistent client payments in the bank statements, gross margin on hardware versus services, tax up to date and a clean credit file. Established MSPs with steady managed service income are often approved within a day or two on bank statements.