Payments on Demand vs Term Loans
Which funding fits your business?
A term loan gives you a lump sum up front and a fixed repayment schedule. Marmalade Payments on Demand gives you access to money you have already earned: the value of invoices you have issued but haven’t been paid for yet. One creates debt and charges interest; the other converts an existing asset into cash. This page compares the two so you can see which suits the way your business trades.
Last updated: 29 August 2026
At a glance
Payments on Demand vs Term Loans
A side-by-side view of how the two options compare on structure, cost, repayments and security.
| Feature | Payments on Demand | Term Loans |
|---|---|---|
| Structure | ||
| What it is | Early payment on invoices you have already issued | A lump sum borrowed and repaid over a fixed term |
| Funding source | Your own unpaid invoices | Borrowed funds from a lender |
| Debt on balance sheet | No debt created | Creates a liability for the full loan term |
| Amount available | Scales with the eligible invoices you issue | Fixed at approval; borrowing more requires a new application |
| Cost, repayments & risk | ||
| Cost model | One fee per invoice cashed in, tiered by your customer’s payment risk (2.50%–4.99%) | Interest over the full term, plus establishment fees |
| Interest | None | Charged on the outstanding balance for the life of the loan |
| Repayments | None. Your customer pays the invoice as usual | Fixed scheduled repayments regardless of trading conditions |
| Non-payment risk | Non-recourse included at no extra cost. Marmalade carries the risk if your customer can’t pay | You remain liable for full repayment regardless of whether your own customers pay you |
| Paying for unused funds | You pay only when you cash-in an invoice | Interest accrues on the full amount from drawdown |
| Exit & security | ||
| Early exit | Not applicable | Early repayment fees may apply |
| Security | Security on the invoices you cash-in only | Usually secured over business assets, often with directors’ guarantees |
| PPSR impact | No PPSR conflicts | Registrations can restrict other borrowing |
| Getting started | ||
| Getting started | Connect your accounting platform, complete KYC and sign the agreement, with no credit application | Full credit application and approval before funds are drawn |
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 a Term Loan?
A term loan and Payments on Demand solve different problems. A loan brings forward money you haven’t earned yet; you take on a liability, pay interest across the whole term and make fixed repayments whether or not trade holds up. Payments on Demand brings forward money you have already earned but haven’t been paid for. You choose which eligible invoices to cash-in, pay one flat fee on those invoices only, and there is nothing to repay: your customer settles the invoice as they normally would. Because nothing is borrowed, no debt is created and there is no schedule to service in a quiet month.
Why marmalade?
Why choose Payments on Demand over a term loan?
Funding without a liability
Payments on Demand isn’t borrowing, so nothing is added to your balance sheet. It keeps your gearing and your borrowing capacity intact for the things a loan is genuinely right for.
No interest and no repayment schedule
There is no interest accruing and nothing to repay. Your customer settles the invoice as they normally would, so a quiet month does not arrive with a fixed obligation attached.
You only pay when you use it
A loan charges interest on the full amount from the day it’s drawn. With Payments on Demand you pay one flat fee only on the invoices you choose to cash-in, and the fee is shown before you confirm.
Funding that follows your trading
A loan is fixed at approval. Payments on Demand scales with the eligible invoices you issue, so capacity moves with the business rather than on a decision made months ago.
Where a term loan has the edge:
Size and purpose. A loan is the right instrument when the money is for something an invoice book cannot cover: premises, plant, a vehicle fleet or an acquisition. Payments on Demand is capped by the eligible invoices you have actually issued, so it cannot fund a purchase that is larger than your receivables or that sits ahead of revenue altogether.
Predictability over a long horizon. A fixed repayment schedule is a budgeting feature as much as an obligation: you know the amount and the date for the life of the loan. If you are financing a long-lived asset and want the cost spread across the years it earns over, that structure fits the purchase better than paying per invoice.
Compare on pricing
Payments on Demand pricing compared with a Term Loan
One is priced per transaction; the other is priced over time. See the Payments on Demand pricing page for current fees.
Payments on Demand
You pay when you cash-in.
One flat fee per invoice cashed in, shown before you confirm
No interest and no repayments
No establishment, account or exit fees
You pay only on the invoices you choose to cash-in
Term Loans
You pay for as long as you borrow.
Interest charged on the outstanding balance for the full term
Establishment or application fees at drawdown
Ongoing account or service fees over the life of the loan
Early repayment fees may apply if you settle ahead of schedule
Security over business assets and directors’ guarantees are commonly required
One is priced per transaction; the other is priced over time, so the cheaper option depends on how long you would hold the money rather than on the headline rate alone. View the Terms & Conditions.
Which option should you choose?
Payments on Demand may suit your business if:
- Your funding need is short-term working capital, not a long-term asset
- You don’t want to add debt or give directors’ guarantees
- Trading is uneven and a fixed repayment schedule would be a risk
- You want costs tied to use rather than time
- You use Xero, MYOB or QuickBooks
- You want to protect your borrowing capacity for other purposes
Term loans may suit your business if:
- You need capital for a specific asset, premises or acquisition
- You want a predictable long-term repayment schedule
- The amount you need is larger than your invoice book can support
- You are investing ahead of revenue rather than bridging invoices already issued
- You are comfortable with security over business assets and 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 Invoice Finance
How cashing in individual invoices compares with a facility taken over your whole ledger.
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 early payment on invoices you have already issued, not borrowed money. No debt is created on your balance sheet, and you get paid regardless of when your customer settles the invoice, as the risk transfers to Marmalade at the point you cash in.
Neither is better for every business. Payments on Demand is stronger for short-term working capital, keeping gearing and your borrowing capacity clear of a long-term facility. Term loans are stronger for long-term investment in assets, equipment or acquisitions where a fixed repayment schedule suits the purchase.
There is no fixed limit on Payments on Demand. Capacity scales with the eligible invoices you issue, so it can apply beyond a single upfront amount as your invoice book grows.
No. Your customer settles the invoice as they normally would, which is the main mechanism that replaces a fixed repayment schedule with a term loan.
No. One flat fee applies to each invoice you cash in, and the fee is shown before you confirm. There is no outstanding balance, so interest never accrues.
Have more questions? Get all the answers.
View all FAQsTrusted by 34.5K businesses across Australia
Cash-in what you’ve already earned.
Connect your accounting platform, choose the eligible invoices you want paid early, pay one flat fee on those invoices only. No interest, no repayments, no debt.