Payments on Demand vs Invoice Finance
Which suits your cash flow?
Both Marmalade Payments on Demand and invoice finance release cash tied up in unpaid invoices, but they work differently. Invoice finance is a facility: an approved limit, usually secured over your business, with interest or discount charges on drawn funds and ongoing fees. Payments on Demand works invoice by invoice: you choose which eligible invoices to cash-in, pay one flat fee on those invoices only, and take on no debt. This page compares the two so you can see which fits the way your business actually trades.
Last updated: 25 August 2026
At a glance
Payments on Demand vs Invoice Finance
A side-by-side view of how the two options compare on structure, cost, security and day-to-day flexibility.
| Feature | Payments on Demand | Invoice Finance |
|---|---|---|
| Structure & limits | ||
| Structure | Pay-as-you-go, invoice by invoice | An ongoing facility with an approved limit |
| Funding limit | No facility limit. Capacity grows with the invoices you issue | Capped at an approved limit, reviewed periodically |
| Amount funded | Full invoice value paid upfront, less the fee | Typically 80–90% advanced; remainder released once the customer pays |
| Debt on balance sheet | No debt created | Typically creates a liability |
| Cost, fees & risk | ||
| Cost model | One fee per invoice cashed in, tiered by your customer’s payment risk (2.50%–4.99%) | Interest or discount charges on drawn funds, plus facility fees |
| Non-payment risk | Non-recourse included at no extra cost. Marmalade carries the risk if your customer can’t pay | Often recourse-based; non-recourse cover, where available, is usually a paid add-on |
| Ongoing fees | None. No set-up, line or exit fees | Set-up, line and exit fees are common |
| Overdue / late-payment fees | None. Once cashed in, there’s nothing further to pay, even if your customer pays late | Extension or overdue fees are common when a customer’s payment is delayed |
| Commitment & security | ||
| Commitment | No lock-in and no minimum volume | Contract terms, often with minimum volumes or notice periods |
| Security | Security on the invoices you cash-in only | Usually secured over all business assets |
| Directors’ guarantees | Not required | Commonly required |
| PPSR impact | No PPSR conflicts | Registrations can restrict other borrowing |
| Day to day | ||
| Customer experience | Your customer relationship is unchanged | Factoring may involve notification or third-party collections |
| Accounting integration | Xero, MYOB and QuickBooks, with eligible invoices synced automatically | Varies by provider |
| Getting started | Connect your accounting platform, complete KYC and sign the agreement, with no credit application | Full facility application and credit assessment |
Illustrative comparison only, based on typical terms for businesses operating in Australia at the time of writing. Individual products vary by lender, amount and term. Check current terms and conditions before deciding.
Key differences
What is the main difference between Payments on Demand and Invoice Finance?
Invoice finance is a facility. A lender assesses your business, approves a limit, takes security (usually over all business assets, often supported by directors’ guarantees) and charges interest or a discount on what you draw, plus fees on the facility itself. Payments on Demand is a transaction. You connect your accounting platform, choose the eligible invoices you want paid early, and pay one flat fee on those invoices only. Nothing is borrowed, so no debt is created, there is no approved limit capping how much you can access as you grow, and there is nothing to draw down or repay.
The practical difference shows up when trading is uneven: with a facility you pay to keep the line open whether or not you use it; with Payments on Demand you pay only when you actually cash an invoice in.
Why marmalade?
Why choose Payments on Demand over invoice finance?
Pay only for the invoices you cash-in
There are no set-up, line or exit fees, and nothing to pay on funding you don’t use. The fee is shown on each invoice before you confirm, so the cost is known upfront rather than accruing as interest.
No debt and no directors’ guarantees
Payments on Demand isn’t a loan, so nothing is added to your balance sheet as debt. Security sits against the invoices you cash-in, not over all your business assets, and personal guarantees aren’t required.
Keep your customer relationships
Your customers keep paying you the way they always have. There’s no notification, no third-party collections and no change to who your customer deals with.
Funding that grows with your invoices
There’s no approved limit to renegotiate. As you invoice more, more eligible invoices become available to cash-in, so funding follows trading rather than a limit set months ago.
Where invoice finance has the edge:
Continuous, whole-ledger funding. A facility is designed to fund the debtor book as a whole and to keep funding it, month after month, against a limit you can plan around. If you need working capital continuously rather than occasionally, a committed limit gives you a number to budget against that cashing in individual invoices does not.
Collections support, and a finer rate at scale. Some providers take on credit control and chase payment on your behalf, which is work you keep with Payments on Demand. Where volumes are large and steady, a facility rate can also be negotiated down in a way per-invoice pricing is not.
Compare on pricing
Payments on Demand pricing compared with Invoice Finance
Cost is the clearest point of separation. One is priced per invoice; the other is priced on a facility. See the Payments on Demand pricing page for current fees.
Payments on Demand
You pay for what you use.
One flat fee per invoice cashed in, shown before you confirm
No set-up, line or exit fees
No minimum volume and no lock-in contract
You pay only on the invoices you choose to cash-in. Unused capacity costs nothing
Invoice Finance
You pay for the limit you hold.
A discount or interest charge on drawn funds, usually accruing daily or monthly
A service or line fee charged on the facility limit, whether or not it is drawn
Set-up and exit fees, and often audit or reassessment costs
Minimum monthly volumes or minimum fees may apply
The cost of a facility depends on how much of it you actually use. If your funding need is lumpy or seasonal, paying per invoice can be simpler to forecast than a facility priced on a limit. View the Terms & Conditions.
Which option should you choose?
Payments on Demand may suit your business if:
- Your cash-flow needs are lumpy, seasonal or project-based
- You don’t want to add debt or give directors’ guarantees
- You want to keep control of customer relationships and collections
- You use Xero, MYOB or QuickBooks
- You’d rather pay per invoice than pay to keep a facility open
- You want to avoid PPSR registrations that restrict other borrowing
Invoice finance may suit your business if:
- You need continuous funding across the whole debtor ledger
- You want a committed limit you can plan around
- You want credit control or collections handled by the provider
- Your volumes are large and steady enough to negotiate a finer rate
- You’re comfortable with security over business assets and directors’ guarantees
Compare Payments on Demand, side by side
Weighing up other funding options or payment platforms? See how Payments on Demand compares to each.
Payments on Demand versus Loans
How on-demand funding stacks up against a fixed term loan.
See how it comparesPayments on Demand versus Overdraft Facilities
An overdraft limit compared with paying only for the invoices you choose to cash-in.
See how it comparesFrequently Asked Questions
Have more questions? Get all the answers.
View all FAQsNo. Payments on Demand is not a loan. Businesses are paid for invoices they have already issued, not borrowed money. No debt is created on your balance sheet and there is no repayment schedule. Your customer settles the invoice as they normally would.
Invoice finance is an ongoing facility with an approved limit, security over business assets and often renewal or disclosed charges on drawn funds. Payments on Demand is charged per invoice you choose to cash in, with no facility limit, no ongoing fee and no requirement to cash in every invoice.
Neither is better for every business. Payments on Demand is stronger where flexibility, ease of setup and control over which invoices are cashed in matter, without ongoing debt and directors’ guarantees. Invoice finance may suit businesses that need continuous whole-ledger funding, a committed limit, or professional collections support.
One flat fee applies to each invoice you cash in, and the exact fee is shown before you confirm. There are no set-up, line or exit fees, and no ongoing or unused-capacity costs.
There is no facility limit. Capacity scales with the eligible invoices you issue, so funding follows trading rather than a limit set at approval and reviewed periodically.
Have more questions? Get all the answers.
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Get paid on the invoices you’ve already sent.
Connect your accounting platform, choose the eligible invoices you want paid early, and pay one flat fee on those invoices only. No facility, no debt, no lock-in.