Commercial Finance Education
Accounts receivable financing advances funds against outstanding invoices. The business sells or pledges its receivables to a lender, which advances a percentage of the invoice value—typically 70–90%—and collects from the customer. The remainder, minus fees, is remitted when the customer pays.
Many B2B businesses invoice customers and wait 30, 60, or 90 days for payment. During that wait, payroll, materials, and overhead still need to be paid. AR financing turns unpaid invoices into immediate cash.
Accounts receivable represent money owed to the business. Lenders advance against that asset—either by purchasing the invoices (factoring) or using them as collateral (asset-based lending). The advance rate and fees depend on invoice quality, customer credit, concentration, and structure.
Brokers and advisors often encounter clients with strong receivables who were declined by a bank or factor. Those declined deals may be eligible for second look through a referral partner network. No approval is promised; each deal is evaluated on its merits.
Two common structures for AR financing:
B2B businesses with invoice-based revenue—manufacturers, distributors, staffing firms, professional services, healthcare providers—often use AR financing. Companies that extend net-30 or net-60 terms to customers may find that collections lag behind expenses. AR financing bridges that gap.
Eligibility varies by lender. Invoice quality, customer creditworthiness, concentration, and industry are typical factors. Deals declined by one source may be evaluated differently elsewhere. Brokers with a signed referral agreement can send declined business loans for review.
Manufacturer scaling up. A manufacturer has large orders from creditworthy customers but must buy raw materials and pay labor before receiving payment. AR financing advances against those invoices, funding the production cycle.
Staffing firm payroll. A staffing firm places workers at client sites. Clients pay in 45 days; payroll is weekly. Factoring advances against the invoices so the firm can meet payroll.
Distributor growth. A distributor wins a large contract. Inventory and logistics costs must be paid before the customer pays. AR financing may fund the gap.
Declined by bank. A business with solid receivables was declined by a bank due to industry or structure. The CPA refers the deal to a referral partner for second look. Alternative lenders may evaluate the deal differently.
Brokers refer AR deals when they fall outside their primary lender box. CPAs and consultants refer clients who were declined by a bank or factor. Vendors refer customers with B2B receivables who need working capital. The common thread: a need for a different evaluation than the first lender provided.
Second look is not a guarantee. Send declined business loans and hard-to-place AR deals through the referral process. Review the referral agreement before submitting. See declined deals for more on how these situations are handled.
Submit borrower and request details by email.
We evaluate the opportunity and identify possible funding paths based on multiple factors.
Partners stay informed throughout the process.
When a deal closes, partners may receive 35% revenue share per the agreement.
FAQ
Accounts receivable financing advances funds against outstanding invoices. The business sells or pledges receivables to a lender, which advances a percentage of the invoice value—typically 70–90%—and collects from the customer. The remainder, minus fees, is remitted when the customer pays.
Factoring typically involves selling invoices to a factor, which takes over collection. Asset-based lending (ABL) uses receivables as collateral for a revolving facility; the business retains collection responsibility. Structure, recourse, and fees differ.
B2B businesses with invoice-based revenue—manufacturers, distributors, staffing firms, service companies—often use AR financing. Eligibility depends on invoice quality, customer credit, concentration, and industry. Different lenders have different criteria.
Yes. Brokers, vendors, CPAs, and advisors with a signed referral agreement can submit declined accounts receivable financing deals for second look review. The financing partner evaluates the opportunity; no approval is guaranteed.
Invoice quality, customer creditworthiness, concentration risk, industry, and deal structure. Lenders evaluate whether receivables are collectible and support the advance. Deals declined by one source may be evaluated differently elsewhere.
Referral partners submit declined deals through the referral partner process. Review the referral agreement first, then send deal details. See send declined business loans and declined deals for more information.
Have a declined AR financing deal?
Review the referral agreement, sign it, and submit opportunities for evaluation.
