Accounts Receivable Financing
Financing that advances cash against a business's unpaid customer invoices, using the receivables themselves as collateral rather than selling them outright.
Unlike invoice factoring, where invoices are sold to a factoring company, accounts receivable financing is structured as a loan or line of credit secured by the receivables, with the business retaining ownership and collection responsibility for the invoices.
This distinction matters for businesses that want financing tied to their receivables without shifting customer relationships or collections to a third party, which is often a deciding factor between this and invoice factoring.
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