An App Developer’s Guide to Invoice Financing

In today’s fast-paced mobile world, apps have become an integral part of how we live our lives. Our society has grown accustomed to the convenience of having everything from shopping and gaming to paying bills and communication all right at our fingertips. As people grow more and more reliant upon apps, developers have to work twice as hard to meet the increasing demand.

A big challenge app developers face is funding. Once you’ve physically developed your app and launched it with a distributor like Apple’s App Store or Google Play, the revenue you generate from the sales of your app won’t immediately enter your account. Some app markets hold your money for a period of time. Others may require a payout threshold where they won’t release your money until your app has reached a certain amount in sales. This translates to months with no incoming cash flow to the company. For start-ups especially, this could pose a big obstacle to growth as limited capital translates to limits on operations.

Invoice financing is a popular financing option for app developers looking to supply the needs of their companies. Here’s what you should know if you’re interested in applying for it.

What is Invoice Financing?

An invoice, or account receivable, is a document that a supplier issues to their customers after rendering a product or service. It outlines the number of goods or services rendered and those fees associated with them. Customers are then required to pay these invoices within an allotted time. This timeframe is typically predetermined in terms set forth by the business owner and customer beforehand.

If invoices remain unpaid for weeks, causing serious cash-flow problems for the company owed, invoice financing is an ideal solution. Invoice financing allows businesses to sell their customer’s outstanding invoices. Instead of waiting for the past due to payment, you can get cash up-front and use it for whatever needs your company has. With invoice financing, you’ll have easy access to much-needed cash.

Why is Invoice Financing Important for App Developers?

Every business owner knows cash flow is the lifeblood of a company. App developers and companies launching an app need cash coming in so they can pay for the resources required to improve and market said app. If a lack of cash forces you to put your operations on hold, it can be really damaging for the company.

Applying for a business loan from a bank is risky because banks don’t like lending money to small businesses (especially those with little or bad credit). There’s really no assurance you’ll be approved.

Invoice financing from alternative lenders is a viable substitute that lets you avoid leaving your company idle for months. You can leverage your invoices to get money right away and continue running your business. With invoice financing, you can get up to 85% of your invoices funded. Plus, the lending company will also handle the payment collection directly from your customers.

When is an Invoice Financing Useful?

You can use the funds you receive from accounts receivable financing for just about any business need, such as:

  • Hiring Employees. If your app development company is growing, you’ll need to expand your workforce. The overhead costs for hiring new staff can be steep, but invoice financing can provide the necessary funds to cover the hiring costs.
  • Launching a New App. Developing and launching an app is expensive. On average, apps offering basic features can cost between $10,000 to $50,000 to develop. Without invoice financing, it can be challenging for app developers to come up with that amount.
  • Software and Equipment Needs. An app developer needs reliable equipment and software to create an app. Purchasing these with your limited capital can create a huge cash-flow gap. Invoice financing gives you the opportunity to purchase equipment and software without breaking the bank.
  • Day-to-Day Company Expenses. Unpaid invoices can hurt your ability to pay your rent, utilities and other payables on time. This will affect not only your credit score but your business’ reputation as well. Freeing up cash from your invoices allows you to pay your bills on time.

What are Some of the Pros and Cons of Invoice Financing?

Like other financing options, invoice financing comes with its share of pros and cons. Before you apply for one, be sure to weigh out the advantages and disadvantages first.


  • You’ll have quick access to cash
  • You can get the loan without securing collateral
  • You’ll have a greater chance of approval (vs. traditional banks)
  • The financing company will handle your payment collections


  • You’ll incur higher costs (alternative lenders typically charge higher interest rates)
  • Your customers will know you’re working with a third-party financing company
  • You’ll have to surrender the control of your ledgers to the lenders
  • You could be liable for unpaid invoices and non-paying customers

Invoice Financing for App Developers: Should You Go for It?

Every business needs additional funding to keep it going. App developers, especially, have to keep a stable cash flow to foster business growth. Invoice financing for app developers is a quick financing solution that can help solve pressing cash flow issues. If your company works with customers who have a good repayment history, then invoice financing is a good option for you. With steady cash flow, your tech company can keep up with the latest trends, remain competitive, and succeed in the industry.


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