Disbursement of Funds

Understanding the Disbursement of Funds Process

Disbursement of Funds is the moment an approved invoice actually turns into cash. Once the verification and approval step confirms the invoice and the debtor's creditworthiness, the financier advances a percentage of the invoice value — typically 70% to 90% — directly to the business, usually within one to two business days of approval.

What Determines the Advance Rate

• Debtor Credit Quality: Stronger, well-rated debtors typically support a higher advance percentage.
• Industry and Dispute History: Sectors with frequent short-payments or disputes tend to see more conservative advance rates.
• Invoice Documentation: Clean, fully supported invoices reduce the financier's risk buffer.
• Concentration Risk: Heavy reliance on a single debtor can lower the advance rate for that exposure.

How It Works

1. The invoice completes verification and is approved for funding.
2. The financier calculates the advance rate and reserve (the withheld portion).
3. The advance is disbursed to the business, typically by bank transfer.
4. The reserve is released to the business, minus fees, once the customer pays the invoice in full.

Choosing a Provider for Fast, Reliable Disbursement

Disbursement speed depends heavily on the financier's operational setup. Providers running on modern commercial finance platforms — such as those built by CODIX — can automate verification and payment instructions, cutting the time between approval and funds arriving in the business's account.