Glossary
Accounts receivable financing
Funding secured by or advanced against unpaid invoices.
The family of products that turn unpaid customer invoices into cash: invoice financing (a loan or line secured by receivables; you keep collecting) and invoice factoring (a sale of the receivables; the factor collects). Cost depends on how long customers take to pay, which is what the product prices. Full explainer.
How it appears in a contract
A receivables loan or line with a borrowing base, or a factoring agreement.
Worked example
$100,000 of receivables at a hypothetical 80% advance rate supports about $80,000 of availability on a receivables line.
Illustrative figures on stated assumptions; not quotes.
What to ask
- Which customers and invoices are eligible?
- Advance rate and fee basis?
- Does the lender file a lien on all receivables?
Related terms
Invoice factoring · Net 30 · UCC-1 · all terms
Educational definitions, not legal advice. Contract terms and their legal treatment vary by provider and state; read your agreement and ask a professional.
See which options fit your numbers
Inquiries are not open yet. You can preview the three-minute questionnaire now, and use the calculator and comparisons freely.