One customer is most of your revenue — what that does to a funding application

Invoice finance is underwritten against who owes the money, not just the business borrowing against it — a funder is taking a credit view on your customer as much as on you. Land one large customer that becomes most of your ledger, and that underwriting concentrates almost entirely on a single relationship. No published New Zealand funder sets out a fixed percentage limit for how much of a facility one debtor can represent, but the tools for managing that exposure — selective financing, recourse structure, and disclosing it upfront rather than hoping it goes unnoticed — are real, and worth understanding before you apply.

Key Takeaways

Why a funder cares who owes the money, not just who's borrowing

This is the mechanic that explains everything else in this article. ScotPac is explicit about it: where a bank has turned an applicant down, "ScotPac focuses closely on the quality of a business's debtor ledger. In other words, how reliable its customers are at paying invoices" — a genuinely different lens from the credit-history-and-asset-security test a term loan runs on. More broadly, "lenders will also look at the creditworthiness of your customers and the strength of your receivables ledger to minimise their own risk in extending you the advance."

That assessment goes deeper than a general reputation check. Under a recourse factoring arrangement, "the finance company commonly performs a financial check on your customers to assess their payment capability and reliability before agreeing to factor an invoice" — the underwriting is genuinely aimed at the payer, not just the applicant. And the cost of the whole facility reflects this too: it depends partly on "your customers' creditworthiness", alongside the number and value of invoices, the trade terms you extend, and whether the facility is factoring or discounting.

What that means once one customer is most of the ledger

None of the major New Zealand funders publish a specific percentage threshold, sublimit, or formula for how much of a facility one debtor is allowed to represent — that number simply isn't published anywhere, and it's not something you'll find to benchmark against. What's clear from how these facilities are underwritten is the mechanism itself: a funder assessing your ledger is really assessing your customers' ability and willingness to pay, spread across however many of them there are. When one customer is most of your ledger, the funder isn't getting the benefit of that spread at all — its risk sits on exactly the same single relationship yours does. That's the practical reason a concentrated ledger gets scrutinised more closely and can shape what's actually advanced, even without a published number attached to it. Confirm directly with a specific funder how they'd treat your particular ledger rather than assuming a general rule applies.

Who wears the risk if the big one doesn't pay

This is the part worth understanding before you sign anything, because the default answer isn't the lender.

Recourse factoring — the standard structure — means "you remain responsible for the invoice amount even if your customer doesn't pay the debt in full"; if the customer fails to pay, the liability for that outstanding amount sits with your business, not the finance company. This generally comes with lower fees than the alternative, precisely because the lender is carrying less risk. Confirmed elsewhere: "responsibility for non-payment typically rests with your business" by default, unless additional protection has specifically been added.

Non-recourse factoring flips that: it "places all the risk of customers not settling invoices on the finance company" — if the customer doesn't pay and the debt goes uncollected, the business carries no liability for the sum owed at all. The trade-off is cost: non-recourse "often" comes with a larger factoring fee, because the finance company is taking on meaningfully more risk. Worth flagging directly: ScotPac states it does not currently offer Invoice Discounting without recourse — non-recourse simply isn't available on that specific product, regardless of how concentrated your ledger is or how much you'd want that protection.

There's a middle option too: ScotPac's Bad Debt Protection add-on, described as something you can attach to a facility if invoice non-payment is a genuine concern, intended to "safeguard your working capital and provide added peace of mind" — framed elsewhere as "a safety net to cover risky accounts", with a specialist helping determine the right level of cover.

Structure	Who carries non-payment risk	Cost impact	Availability
Recourse factoring (standard default)	Your business	Generally lower fees	Standard across most facilities
Non-recourse factoring	Finance company	Larger factoring fee	Not offered on ScotPac's Invoice Discounting product specifically
Bad Debt Protection (add-on)	Shared, via a safety net for risky accounts	Additional cost, level set with a specialist	Available as an add-on at ScotPac

Financing the dominant customer without committing your whole ledger

You don't have to fund every invoice you raise just because one customer dominates your revenue. Selective Invoice Finance, also called spot factoring, lets a business "choose which specific invoices to finance, offering greater flexibility" — and it's described as often used by New Zealand SMEs with fewer, higher-value invoices, which is exactly the shape of a ledger dominated by one large customer. Rather than committing the entire relationship to a facility, you can selectively finance specific invoices from that customer as they arise.

FundTap runs on a similarly flexible structure from a different angle: "no minimum, no lock-in" — fund one invoice, several, or none at all, and stop any time with nothing owing. Neither lender frames this specifically as a concentration remedy, but structurally, it's exactly the tool that lets you draw on a dominant customer's invoices without tying your whole facility, and your whole risk exposure, to that single relationship.

The numbers you'll see quoted — and why they move around even on one lender's own site

Worth knowing before you compare quotes: the same lender's own pages don't always agree with each other, which matters when you're trying to work out what a concentrated ledger will actually be priced at. ScotPac's product page states the advance rate as "up to 80% of eligible invoice value"; a ScotPac blog states up to 85%; another ScotPac blog references up to 95%, with a worked example using a 90% advance; and ScotPac's Debt Factoring product page states 80% paid within 24 hours. Treat any single percentage you're quoted as a ceiling to confirm in writing for your specific facility, not a fixed figure to plan around — even the lender's own marketing doesn't settle on one number.

The same pattern shows up in scale claims: ScotPac states on two of its own pages that it supports over 9,300 businesses and funds $26.3 billion in invoices annually, while a separate ScotPac blog states $23.9 billion — two different figures, same lender, both current on its own site.

Fee examples vary too, and it's worth walking through one in full because the arithmetic matters. ScotPac's worked example: a $40,000 invoice, factored at a 90% advance, releases $36,000 upfront within 24 hours. Once the customer pays, the remaining $4,000 is released less a 2% factoring fee of $800 — so the business receives $3,200 on that second payment, for a combined $39,200 across both payments on the original $40,000 invoice. A separate ScotPac blog gives a different fee example entirely: a service fee of 3%, illustrated as $300 on a $10,000 invoice, plus any admin charges — a different rate from the 2% used in the worked example above, on the same lender's own site.

FundTap prices differently again: a flat fee from 4% per invoice, quoted in full before you confirm. Its own example: on a $4,500 invoice, $4,050 lands in the account today, for a flat fee of $180 — that $4,050 is what's received upfront, and the $180 is the separate fee charged for that advance, not a bundled total.

Does concentration change whether your customer needs to be a business at all?

If your dominant customer is actually one large individual client rather than another company, eligibility differs sharply by lender. ScotPac's Invoice Finance is built around B2B trade-credit transactions specifically — "businesses that issue invoices in stages, in advance or to consumers may not be eligible" — alongside requiring at least six months' trading history and a minimum of $10,000 in invoices per month. FundTap takes the opposite position: "your customers can be other businesses or consumers", with most of what it funds due within 60 days and longer terms reviewed individually. If your concentration risk sits with a large consumer client rather than a business, that's a genuine reason to look past a B2B-only lender rather than assume you're excluded from invoice finance altogether.

Presenting a concentrated ledger honestly

The general process advice from ScotPac is simple on its face: "it pays to have clear records and a reliable, demonstrable collection process" to help the application move smoothly. In practice, given how closely these facilities underwrite the specific debtor, a concentrated ledger is exactly the kind of thing a funder is going to ask about anyway — so it's worth getting ahead of the conversation rather than waiting to be asked.

Be ready to speak plainly to:

• How long the relationship with the dominant customer has actually run, not just how big it currently is
• The payment history and reliability of that specific customer — on-time patterns, any past disputes or delays
• What the underlying contract or trading terms actually look like, and whether the relationship is genuinely ongoing rather than a one-off spike
• What happens to the business if that customer's volume dropped, and what you're actually doing about that risk beyond hoping it doesn't happen

Naming the concentration upfront, with that context ready, reads completely differently to a credit assessor than having it surface unexplained partway through a review of your ledger. Given that a funder is already going to be checking your customer's creditworthiness directly as a matter of standard process, there's very little to be gained by hoping they don't notice who your business actually depends on.

Does the choice between factoring and discounting matter here?

It can, particularly if your dominant customer would react to being contacted directly about a financing arrangement. Under Invoice Factoring, the finance provider manages collection of your customers' outstanding invoices directly; under Invoice Discounting, you retain that responsibility yourself. Discounting is specifically described as fully confidential — "due to the fact that your business retains responsibility over collecting money owed to you, your customers will remain unaware that their invoices are being financed." By contrast, ScotPac's full-service Debt Factoring product — which pays 80% of the approved invoice value within 24 hours, less fees, with the remaining 20% released once the invoice is paid in full — explicitly makes the customer aware of the ScotPac partnership, since ScotPac is directly involved in collections under that structure. If your dominant customer's reaction to a visible financing arrangement is itself a risk you're managing, that's a real factor in choosing which product fits, not just an afterthought.

Frequently Asked Questions

Is there a published limit on how much of my ledger one customer can represent? No fixed percentage is published by the major New Zealand invoice finance providers. What's clear is the underlying logic — a funder is underwriting your customer's payment reliability as much as yours — so confirm your specific situation directly rather than assuming a general rule applies.

Will a funder simply decline me because one client is most of my revenue? Not automatically. The real question is which tools are available to manage that exposure — selective financing on specific invoices, the recourse structure of the facility, and add-ons like Bad Debt Protection where offered — rather than a blanket refusal based on concentration alone.

Can I get non-recourse cover specifically for my dominant customer? It depends on the product. ScotPac doesn't currently offer non-recourse on its Invoice Discounting facility at all, though Bad Debt Protection exists as a separate add-on worth asking about specifically for a concentrated or higher-risk account.

Does it matter if my biggest customer is a business or an individual? Yes, at least for some lenders. ScotPac's Invoice Finance is built around B2B trade-credit sales specifically, while FundTap explicitly accepts consumer customers too — worth checking against your actual customer base rather than assuming invoice finance requires a business-to-business relationship.

Should I mention the concentration upfront, or wait to see if it comes up? Name it upfront, with the relationship history, payment record and contingency plan ready to discuss. Given that debtor-specific checks are already a standard part of how these facilities are underwritten, there's little to gain from hoping a concentrated ledger goes unnoticed.

Deplexifi arranges invoice finance across New Zealand, Australia and the UK, and can tell you plainly how a concentrated ledger will actually be read before you apply anywhere.

Assuming there's a published percentage rule for debtor concentration to check yourself against. There isn't one — the real exposure is that the funder's risk sits on the same single customer relationship yours does, and that's assessed case by case, not against a public formula.

Nothing here is regulated financial advice. Deplexifi arranges commercial finance for businesses — this article describes general lending practice and the published position of the sources listed below, not a recommendation for any individual business.