Supplier invoice financing: How to choose the right solution

If you’re exploring supplier invoice financing, chances are you’re looking for a way to pay your suppliers faster without putting unnecessary strain on your cash flow. This might be because you want to:

• Maintain strong and reliable relationships with your suppliers
• Meet legal or regulatory requirements that require faster supplier payments
• Simplify your payment process by working with a single financing partner instead of managing multiple payables

Supplier invoice financing (also referred to as reverse factoring or supply chain finance) helps solve these challenges by having a financing provider pay your suppliers upfront on approved invoices. You, the buyer, then repay the provider on pre-agreed terms. It’s a win-win: your suppliers get paid faster, and you preserve working capital.

But finding the right financing partner isn’t always easy. 

Traditional reverse factoring bank-led programs often come with significant barriers to entry – think annual financing minimums of €50 million or more to qualify. On top of that, banks often rely on outsourced or outdated technology, making these programs slow to implement, difficult to manage, and less flexible than modern businesses need.

That’s why it’s important to understand your options and choose a supplier invoice financing solution that aligns with your business. This guide will walk you through exactly what to look for and why a modern solution like Aria can make a difference.

Read on to find out:

• When it makes sense to implement supplier invoice financing
• Key considerations when choosing the right invoice financing solution
• How supplier invoice financing works with Aria
• Why choose Aria as your supplier invoice financing solution?
• How Aria supported Malt’s expansion across 40+ countries

Want to see how Aria can help you pay suppliers faster? Book a demo today.

When it makes sense to implement supplier invoice financing

Before choosing a financing partner, it’s important to confirm supplier invoice financing is the right fit for your business. Below are the most common scenarios where supplier invoice financing delivers real value:

1. When you want to secure key suppliers without paying immediately

Cash flow timing is a constant balancing act. Pay suppliers too late, and you risk damaging trust or disrupting supply. Pay too early, and you tie up capital that could be used elsewhere. This challenge is especially common in industries that depend on a small group of trusted suppliers or where projects take years to finish.

For instance, in industries like luxury goods, companies often have long-standing supplier relationships built over decades. Maintaining these relationships means ensuring suppliers are paid promptly so they remain financially healthy and continue providing essential goods. 

Similarly, in sectors such as aviation, building projects can last five to seven years. During that time, timely payments are critical to prevent disruptions in the supply chain, which is exactly why many enterprises turn to reverse factoring programs.

Marketplaces face a similar challenge: suppliers often report that faster payments would help them sell more. By enabling suppliers to get paid quickly, marketplaces can increase transaction volumes, retain sellers, and attract new users – all while still offering regular payment terms to buyers.

2. When you’re facing regulatory pressure 

Certain industries and regions require payments within specific timeframes, which can clash with internal mandates or cash flow constraints. 

For instance, the UK’s Late Payment of Commercial Debts Regulations set maximum payment periods – 30 days for public authorities and 60 days for B2B transactions. Missed deadlines can trigger statutory interest (8% plus the Bank of England base rate) and fixed compensation between £40 and £100 per invoice. 

Similarly, in France, fresh product suppliers must be paid within 30 days. But what happens if an international parent company prefers a 120-day payment schedule? The company would need a way to meet regulatory payment deadlines without altering its preferred internal payment schedules. Supplier invoice financing makes that possible.

3. When your enterprise doesn’t qualify for a bank’s reverse factoring program

Mid-market companies often fall short of banks’ high minimum financing thresholds, which can start at €50 million in annual invoices. For example, a company with €150 million in annual spending might see only 10% to 30% of its suppliers participate in a reverse factoring program, leaving just €15-45 million in eligible invoices – well below the threshold.

On top of that, traditional bank programs are slow, rely on outdated technology, and often depend on third-party providers for automation. This makes programs difficult to manage and poorly suited to businesses that rely on fast, seamless workflows.

4. When your marketplace is feeling the limits of a bank’s direct factoring program 

If you’re a marketplace financing your suppliers’ invoices, you may be getting some help from a bank via a direct factoring program. But banks typically underwrite individual suppliers, which excludes your smaller vendors from early payment programs and limits the number of invoices that can be financed. 

Manual processes and legacy systems also make these programs inconvenient. As a platform grows, one provider often isn’t enough, so more partners get added. That quickly complicates operations and creates a fragmented experience for suppliers. At that stage, it may be time for a more flexible, technology-first approach.

When does supplier invoice financing not make sense?

Supplier invoice financing is not always the right fit. You may not need it if:

• You already pay suppliers quickly without straining your cash flow.
• Supplier demand for early payment is low or inconsistent.
• Invoice volumes are too small to justify the costs and administrative effort of an invoice financing program.
• Your existing payment terms already comply with regulations and meet supplier expectations.

Key considerations when choosing the right invoice financing solution

Before partnering with a supplier invoice financing provider, make sure the solution fits your business needs:

• Assess the provider’s funding capabilities and minimum commitments: How much volume are you required to commit upfront? Can you start small and scale over time? Also, how quickly are approved invoices funded? Speed matters when suppliers rely on predictable cash flow to run their businesses.
• Verify provider reliability and stability: Is the provider profitable – or on a clear path to profitability? How much invoice volume have they financed to date? Are they backed by established financial institutions or banks?
• Consider the financing program’s flexibility: Traditional factoring often requires all invoices to be submitted for evaluation, but some modern solutions let you choose which invoices to finance. The latter makes it easier to onboard suppliers gradually and lets suppliers request early payment when it suits them.
• Review the provider’s credit underwriting approach: Understand who the provider underwrites: the buyer or the supplier? For marketplaces, it’s especially important to understand how credit checks, verifications, and risk assessments are handled. Are these processes automated? Is onboarding frictionless? A rigid, manual approach can limit buyer adoption and slow growth.
• Check integration and automation capabilities: Supplier invoice financing involves constant interaction between you, your suppliers, and the financing partner. Ask how much of this process is automated. Are supplier and invoice data integrated? Are approvals and payments automatic? Well-integrated and automated solutions will ultimately reduce manual work, errors, and friction for everyone.
• Evaluate the provider’s ability to scale in funding and across markets: Will the provider have sufficient capacity as your invoice volumes grow? Can they support expansion into new countries or currencies without adding operational complexity or fragmenting the supplier experience?
• Analyse pricing and total program cost: Supplier invoice financing can be expensive, but price alone isn’t the full picture. Consider all that goes into the service, such as funding costs, KYC, credit scoring, orchestration, insurance, collections, and more. Understand what you’re paying for, the value you receive, and whether costs can be offset, such as passing fees to suppliers that benefit from early payment.

How supplier invoice financing works with Aria

Aria is an embedded invoice financing solution built to simplify payments for both enterprises and B2B marketplaces. Here’s how it works depending on your business type:

For enterprises:

1. Invite your suppliers to join your reverse factoring program, typically via email. Your program is customisable, so you can establish rules regarding which specific invoices are finance-eligible. For example, you can rule that all outstanding invoices above €1000 are eligible for the program. 
2. Suppliers activate their account. Your suppliers confirm pre-filled information from your ERP, upload the required documents, and sign the terms & conditions. This typically takes a few minutes.
3. Invoice details flow automatically from your system. You and your suppliers can see what’s been paid, what’s due, and what’s late.
4. Suppliers select invoices for instant payment. Suppliers log in to the dashboard and choose the eligible invoices they want paid instantly. They’re always shown how much they’ll get after any fees, so there are no surprises.
5. Aria sends the funds to suppliers, typically within 24 hours.
6. You repay Aria on the schedule you agreed to, which keeps your cash available for other business needs.

For marketplaces:

1. A business buyer registers with Aria directly on your marketplace. 
2. Aria performs risk checks and issues a credit limit for the buyer. Our payment and financing APIs assess solvency, verify identities (KYC/KYB), check for fraud, and determine eligibility for instant financing. These checks are automated.
3. Approved buyers check out as usual, getting the payment terms they prefer.
4. Sellers can request instant payment for eligible invoices, based on the buyer’s credit limit. In intermediary models where the marketplace invoices buyers directly, you can request payment on your side.
5. Once the invoice is validated, Aria releases funds – often within 24 hours – to your sellers (or to you). 

The buyer then pays Aria the full invoice amount according to the original payment terms.

Why choose Aria as your supplier invoice financing solution?

Traditional bank-led reverse factoring programs can be slow and hard to scale. Aria was built for modern enterprises and marketplaces that need flexible, predictable payments to suppliers.

With 65+ live clients and a total annual funding capacity of €2.5 billion, Aria has already funded over €1 billion in supplier invoices. Backed by reputable investors, we’re a dependable way to keep your supplier payments fast and predictable.

Here’s why companies like StaffMe and Job&Talent choose Aria:

Pay suppliers faster without impacting your cash flow

With Aria, you can advance up to 100% of an invoice payment, often within 24 hours. For enterprises, your key suppliers get paid quickly, which keeps those long-term relationships strong. For marketplaces, faster payments help attract and retain sellers, which keeps your platform active and growing.

Suppliers can see the status of their invoices in real time and have the flexibility to choose which invoices they want to finance. They can request early payment for a single invoice, a few invoices, or all of them. This gives them more control over their cash flow, so they can cover costs and grow their business confidently.

Expand access to financing beyond traditional bank limits

To access reverse factoring at a traditional bank, you often need to meet high entry thresholds and rigid requirements. Aria takes a different approach. With a starting point of €200k and flexibility for high-growth companies, we make supplier invoice financing accessible from day one.

Because Aria underwrites the buyer and not the supplier, you can extend fast payments to small businesses, startups, or long-tail suppliers that typically can’t access asset-based lending. For marketplaces, this creates a better experience for existing sellers and removes friction when onboarding new users.

Scale is built in. Aria can support a large supplier base because our processes are fully automated, not manual. In fact, 92% of credit decisions are made instantly, and 99% of payment flows are automated to significantly reduce your operational workload.

Onboarding is straightforward. Suppliers or sellers sign up through a self-service, white-labeled experience and get started quickly without being pushed into a clunky third-party system. And because Aria is both the funding and technology partner, you manage fewer vendors and keep operations simple. 

Simplify payment operations and grow across markets with an API-first solution

Managing multiple factoring partners and payment processes is complicated and time-consuming. With Aria, you deal with just one financing partner that has the funding capacity to handle all of your supplier payments.

Our platform is flexible and API-first, so you can mould it to fit your workflows. You can plug Aria into your POS, ERP, CRM, or any system that has invoice data. We fetch everything automatically, which cuts down on manual work and reduces operational costs.

You’re also free to start small using our manual dashboard and move to a full API integration when your team is ready.

When it’s time to expand into new markets, Aria grows with you. We support over 100 countries and multiple currencies, including GBP, EUR, and USD, so you don’t need to onboard a new provider every time you enter a new territory.

How Aria supported Malt’s expansion across 40+ countries

Malt leads Europe’s freelancing market, connecting 70,000+ companies with 700,000+ independent experts across a wide range of industries. As the platform scaled, Malt faced a familiar challenge: freelancers expected fast payment, while business clients paid on longer terms. Malt needed to bridge that gap without straining cash flow or adding operational complexity.

With Aria, Malt was able to embed advanced payments directly into its existing workflow and tech. Thanks to a deep API integration, freelancers can now request early payment in a few clicks, without leaving the platform. 

Today, the payment flow is fully automated. Aria handles client credit assessments, validates advance payment requests, pays invoices, and manages reimbursements and collections.

As Malt expanded internationally, Aria quickly rolled out across new markets, handling new currencies, more transactions, and local regulatory requirements. Today, Aria supports Malt across 45 countries and delivers advance payments in under nine hours on average – helping Malt scale faster while paying freelancers on time.

Read the full case study: Aria empowers Malt’s global expansion journey

Partner with Aria to pay suppliers faster without disrupting your cash flow

Supplier invoice financing works best when it fits naturally into how your business already runs. That’s why Aria is designed to be embedded directly into your workflows.

Whether you’re paying your own suppliers early via reverse factoring or offering early payments through your marketplace, Aria advances invoices – often within 24 hours – so your suppliers get paid faster without you having to pay upfront.

And as you grow, Aria grows with you. With multi-country and multi-currency support, you can expand into new markets without reworking your setup or adding new vendors.

Curious what that could look like for your business? See Aria in action with a free demo.

FAQs about supplier invoice financing

1. What is supplier invoice financing?

Supplier invoice financing is a buyer-led business finance solution that enables suppliers to get paid early on approved customer invoices, while the buyer pays later on agreed terms. A financing provider advances the payment to suppliers, helping them improve business cash flow, while the buyer preserves working capital.

2. When does supplier invoice financing make sense?

Supplier invoice financing makes sense when you want to pay suppliers faster without paying earlier yourself. This is useful if you need to maintain strong supplier relationships, improve liquidity, meet regulatory payment deadlines, or offer early payments while keeping longer payment terms internally.

It’s also a good fit when traditional finance options like an overdraft or bank-led invoice factoring aren’t flexible enough, especially for fast-growing businesses managing short-term cash flow needs.

3. Can marketplaces use supplier invoice financing?

Yes. Supplier invoice financing is especially well-suited to marketplaces, letting them pay sellers quickly while buyers continue to pay on net terms. This helps close the payment gap between buyers and sellers, which improves the user experience, improving retention and overall business growth.

4. How does supplier invoice financing work with Aria?

Aria supports supplier invoice financing for both enterprises and B2B marketplaces. For enterprises, suppliers onboard through a self-service flow and can request early payment on eligible invoices. Aria pays suppliers upfront, and you repay Aria later based on agreed repayment terms.

For marketplaces, Aria underwrites business buyers, automates credit decisions, and enables sellers to request instant payment once an invoice is validated. Funds are typically released within 24 hours, while buyers repay Aria according to their agreed terms.

5. Is supplier invoice financing the same as invoice factoring?

Invoice factoring is usually supplier-led, which means that a supplier sends invoices directly to a lender. Supplier invoice financing – also known as reverse factoring – is buyer-led, which means that the buyer works with a funder to offer early payments to suppliers through a supply chain finance program. This helps suppliers access liquidity while the buyer maintains their agreed credit terms and protects their own working capital.