$25K - $5M
AR Financing
Accounts receivable (AR) financing is a revolving loan of $25K to $5M secured by your unpaid invoices, typically advancing 70% to 90% of eligible receivables. Unlike factoring, you keep ownership of the invoices and keep collecting from your customers. Setup takes about 5 to 7 business days; after that, draws fund within one business day.
Written by Jordan Levy, Founder & CEO · Last updated
AR Financing
$25K - $5M
What is AR financing?
Accounts receivable financing lets you borrow against your outstanding invoices without selling them. Unlike factoring, you retain ownership of your receivables and maintain direct relationships with your customers — they'll never know you're using AR financing. The facility works like a revolving line of credit secured by your receivables, growing automatically as your AR grows. This makes it ideal for businesses with strong B2B customer relationships who need to accelerate cash flow without changing their collection process.
Key Features
- Borrow against receivables, retain ownership
- Revolving facility grows with your AR
- You maintain customer relationships
- Flexible advance rates
Funding Range
$25K - $5M
Category
Asset-Based Funding
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How does AR financing work?
Set up your AR facility
We review your accounts receivable aging report and customer base to establish your borrowing capacity. The facility is structured as a revolving line secured by your receivables.
Submit invoices for borrowing
As you generate invoices, submit them to the lender to increase your available borrowing base. Advance rates typically range from 70-90% of eligible receivables.
Draw funds as needed
Borrow against your receivables at any time, up to your available borrowing base. Funds are transferred directly to your account, usually within one business day.
Repay as customers pay you
When your customers pay their invoices, those payments reduce your outstanding balance and free up capacity to borrow again. You handle all collections — your customers are unaware of the financing arrangement.
Why Choose This Product
Why use AR financing?
Keep Your Relationships
Your customers interact with you, not a third party. AR financing is invisible to your clients.
Revolving Access
As new receivables are created and old ones are collected, your borrowing capacity refreshes automatically.
Growth-Ready
The facility scales with your business. More receivables means more capital, with no need to renegotiate.
Eligibility
Who qualifies for AR financing?
- Minimum 600 credit score
- At least 1 year in business
- At least $400,000 in annual revenue
- A portfolio of B2B or B2G receivables
- Invoices must be to creditworthy commercial or government customers
- Ideal for businesses with $25K+ in monthly receivables
Real-World Scenarios
How do businesses use AR financing?
A technology services firm with $500K in outstanding receivables borrows $350K against them to fund a new product launch, repaying as client payments clear over 60-90 days.
A janitorial services company uses AR financing to cover weekly payroll across multiple contracts, drawing against invoices as new jobs are completed and repaying as clients settle their monthly statements.
A distribution company accelerates cash flow by borrowing against its receivables during peak season, maintaining direct customer relationships while accessing the capital needed to fulfill large orders.
Compare
How does AR financing compare to other options?
AR financing and factoring both convert receivables into cash, but the structures are fundamentally different. With AR financing, you borrow against your invoices and retain ownership — your customers never know. With factoring, you sell the invoices, and the factor collects directly from your customers. AR financing is better for businesses that value customer relationships and prefer to handle their own collections. A line of credit provides similar revolving access without tying to specific receivables, but may require stronger credit profiles. A term loan is more appropriate for one-time capital needs rather than ongoing cash flow management.
Frequently Asked Questions
Common questions about AR Financing
The minimum is a 600 credit score. Like factoring, the creditworthiness of your customers is a significant factor in qualification and advance rates.
Initial setup typically takes 5-7 business days as the lender reviews your receivables and customer base. Once the facility is established, draws against new invoices are processed within one business day.
You will need an accounts receivable aging report, business bank statements, a customer list, and standard business identification. The lender will also review your invoicing and collection history.
With AR financing, you borrow against your invoices but keep ownership and handle collections yourself — your customers are unaware. With factoring, you sell the invoices to a third party who then collects from your customers directly. AR financing is typically preferred by businesses with strong customer relationships.
No. AR financing requires at least 1 year in business, $400,000 or more in annual revenue and a 600 credit score, along with a track record of receivables to creditworthy customers. If your business is younger, our credit repair program has no time-in-business minimum and can help get your credit ready for when you reach the 1-year mark.
The initial application uses a soft credit inquiry. A hard pull may occur only when you finalize the facility agreement with a specific lender.
By Industry
Which industries use AR financing?
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