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Accounts receivable financing

Turn unpaid invoices into immediate working
capital without adding debt or waiting on
customer payments.

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Key Highlights
Fast and flexible funding
Funding Amount
$100K to $10M
Asset-Backed
Based on receivable value
Time to Fund
2 weeks to 3 months
What is it?
Use what you’re owed to fuel what’s next

Accounts receivable financing is a great way to cover cash flow gaps by offering unpaid invoices as collateral.

Businesses can leverage their outstanding invoices for access to funding through a line of credit or loan. Instead of waiting weeks or months for payments, you can unlock the value of your receivables and access the capital you need today.

Not looking to use receivables as collateral? National Business Capital also offers flexible cash flow-based funding with fast approvals and no asset requirements.

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how does it work?
Types of accounts receivable financing

Immediate cash flow from financing can come in two primary forms with AR financing: a loan backed by your AR, or factoring, where you sell your invoices at a discount for upfront cash. Both preserve cash flow, support growth, and meet time-sensitive expenses without taking on new debt.

Accounts receivable loan

You keep ownership of the invoices and repay a loan that uses them as collateral. You collect from customers and manage the payment timeline.

Invoice factoring

You sell your invoices to a factoring company at a discount. They advance a portion of the invoice value upfront, between 70% – 90%, and handle collections. Afterwards, you receive the remaining balance, minus fees.

Other formats include:

  • Recourse factoring: You buy back invoices the factor can’t collect
  • Non-recourse factoring: The factor assumes collection risk
  • Spot factoring: Finance one-time invoices only
  • Invoice discounting: Private credit line using AR as backing

 

What’s the difference?
AR Financing vs. Factoring
Factor
Factor AR Financing Invoice Factoring
Invoice control Retained by business Handled by factoring company
Invoice control
Factor: Invoice control
AR Financing: Retained by business
Invoice Factoring: Handled by factoring company
Risk On the business Shared or transferred, depending on structure
Risk
Factor: Risk
AR Financing: On the business
Invoice Factoring: Shared or transferred, depending on structure
Cost Lower fees and interest Higher flat-rate fees
Cost
Factor: Cost
AR Financing: Lower fees and interest
Invoice Factoring: Higher flat-rate fees
Customer experience You handle communications Customers deal with the factor
Customer experience
Factor: Customer experience
AR Financing: You handle communications
Invoice Factoring: Customers deal with the factor
what to expect
How does it work?

When choosing between AR or a revolving line of credit, the AR financing option might seem slightly more complex, but the process is quite simple.

  • Submit your unpaid invoices to as collateral.
  • You’re presented with a funding offer based on the value of your invoices.
  • If you accept, you collaborate to establish a fee structure.
  • Funds are released, then you begin repaying according to the agreed terms.
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considerations
Pros & cons

Benefits

  • Quick access to cash: No more waiting on net 30, 60, or 90 payment terms
  • Flexible approval: Based on your customers’ credit, not just yours
  • Collateral-light: Your invoices secure the funds—no hard assets needed
  • Fast and easy: Fewer documents and faster turnaround than traditional loans

Considerations

  • Cost can add up: Fees may exceed traditional financing if used frequently
  • Customer optics: Factoring may raise concerns if customers prefer direct communication
  • Receivables quality: Poor payment history or disputed invoices can limit funding
Allie Benedetto
Owner, Raw Rev

Funds as you need them, when you need them

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do i qualify?
Eligibility at a glance

Receivable financing comes with more requirements, but also
bigger rewards. Here’s what you need to qualify:

  • 6+ months in business (ideal)
  • Consistent revenue and invoice volume
  • Creditworthy B2B customers
  • Invoices with clear payment terms and history
Check Eligibility

Not sure if you qualify? Our team can review your receivables and match you to the right option.

What do I need to PROVIDE?
Required documents

Have this information on hand and you’re all set

  • Invoices
  • Business financial statements
  • Business formation docs
  • Business tax return
  • Aging AR and AP reports
  • Custom Contracts or MSAs
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FAQs

Yes, you can use accounts receivable as collateral for a loan. This is known as accounts receivable (AR) financing, and it allows businesses to secure funding – such as a line of credit or a loan – through unpaid invoices. Since these invoices serve as collateral, the business gets quick access to funds without using additional collateral.

A loan advance against receivables involves a business selling its outstanding invoices to a third-party factoring company. Also known as invoice factoring, with this process, the factoring company advances around 70 to 90 percent of the total invoice amounts. When the business’s clients pay the invoices, the factoring company releases the outstanding balance minus a factoring fee.

Depending on your financing option, you can pledge or borrow on accounts receivable.

Pledging is where a business uses its unpaid invoices, or accounts receivable, as loan collateral. We would provide funding based on the overall value of the invoices, which you repay according to the terms of the agreement.

Borrowing on accounts receivable, or invoice factoring, is when a business sells unpaid invoices to a factoring company at a discount. The company advances a portion of the total invoice value and manages the collection process until the clients pay the invoices. In turn, the factoring company cancels the remaining balance and charges a factoring fee to the business.

Let’s talk funding
Get the capital you need to grow your business

Let’s review your assets and find out if you qualify—no pressure, no cost.

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