Compare finance types
Invoice finance vs Secured loan: which is right for your business?
The main difference between a invoice finance and a secured business loan is how they are secured and repaid: a invoice finance suits b2b businesses with reliable customers on long payment terms, while a secured business loan suits businesses with property or unencumbered assets borrowing larger amounts over longer terms.
Invoice finance vs Secured loan at a glance
| Invoice finance | Secured business loan | |
|---|---|---|
| What it is | Invoice finance is funding advanced against eligible unpaid business invoices, typically 70–90% of the invoice value upfront with the balance (less fees) paid when your customer pays. It uses your receivables as security rather than property. | A secured business loan is a lump-sum business loan backed by an asset you pledge — usually residential or commercial property, but sometimes equipment or a general security agreement over the business. Security lowers the lender’s risk, so rates are lower and terms longer than unsecured lending. |
| Amount | $20,000 – $5,000,000 | $50,000 – $5,000,000 |
| Term | 1–12 months | 12–180 months |
| Indicative rate | 8% – 18% p.a. | 6.8% – 13.5% p.a. |
| Rate type | Variable | Fixed or variable |
| Security | Secured by receivables | Secured by property |
| Repayments | Settled when the customer pays each invoice | Monthly, principal and interest or interest-only for a set period |
| Typical speed | 24–48 hours per invoice once set up | 2–6 weeks including valuation |
| Best for | B2B businesses with reliable customers on long payment terms | Businesses with property or unencumbered assets borrowing larger amounts over longer terms |
| Consider the other if | Businesses that sell to consumers or are paid at the point of sale | Urgent funding needed this week, or amounts too small to justify valuation costs |
| Tax | Fees are generally a deductible business expense. | Interest on business-purpose borrowing is generally deductible. Establishment and valuation costs may be deductible over time. Confirm with your accountant. |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
When to choose a invoice finance
A invoice finance is usually the better fit for b2b businesses with reliable customers on long payment terms. Its main advantages are grows with your sales, no property security, can be confidential. Consider the alternative if businesses that sell to consumers or are paid at the point of sale.
When to choose a secured business loan
A secured business loan is usually the better fit for businesses with property or unencumbered assets borrowing larger amounts over longer terms. Its main advantages are materially lower rates than unsecured lending, larger amounts and terms up to 15 years, interest-only periods available on many facilities. Consider the alternative if urgent funding needed this week, or amounts too small to justify valuation costs.
Invoice finance
Invoice finance is funding advanced against eligible unpaid business invoices, typically 70–90% of the invoice value upfront with the balance (less fees) paid when your customer pays. It uses your receivables as security rather than property.
Secured business loan
A secured business loan is a lump-sum business loan backed by an asset you pledge — usually residential or commercial property, but sometimes equipment or a general security agreement over the business. Security lowers the lender’s risk, so rates are lower and terms longer than unsecured lending.