Accounts Receivable Financing
Accounts receivable financing and invoice factoring can provide access to part of an eligible invoice's value before the customer pays. Structures differ: the partner may advance funds, purchase the receivable or require the business to retain collection responsibility.
Quick Facts
Loan Amount
Partner-specific - Partner-specific
Rate / Cost
Varies
Funding Time
Varies
Term Length
Based on invoice terms
Key Benefits
- Eligible invoices support the transaction
- Customer creditworthiness may be reviewed
- Recourse and non-recourse structures may be available
- Advance amounts and fees vary
- Collection arrangements depend on the agreement
Requirements
- B2B or B2G invoices
- Creditworthy customers
- Business and customer profiles may be reviewed
- Invoices not already pledged
Ideal For
Key facts
Reviewed by Apply For Financing editorial team on 2026-08-28. Apply For Financing introduces businesses to financing partners and does not lend.
- Accounts receivable financing and invoice factoring advance part of an eligible invoice's value before the customer pays.
- Apply For Financing introduces businesses to third-party financing partners. We do not purchase invoices or collect from customers.
- Two common structures exist: the partner may purchase the receivable, or it may lend against invoices you still own.
- Advance rates and fees vary. We do not publish a typical percentage because customer quality, invoice age and recourse drive pricing.
- Recourse agreements can require you to repurchase a disputed or unpaid invoice. Non-recourse agreements still exclude many dispute types.
- This product fits B2B or B2G invoices with creditworthy customers. It is usually a poor fit for consumer invoices or already-pledged receivables.
- Partners commonly ask for an aged receivables report, sample invoices and customer concentration details.
- Notification factoring tells your customer to pay the factor. Invoice financing can leave the customer relationship in your name.
How this product is usually structured
| Typical use | Unlock cash sitting in unpaid B2B or government invoices |
|---|---|
| Cost basis | Discount fee, interest or both, plus possible service fees |
| Amount | A percentage of eligible invoice face value |
| Term | Tied to invoice due dates |
| Repayment | Customer payment, or repurchase if the invoice fails |
| Security | The receivables, plus possible guarantees |
| Timing | Partner-specific after invoice verification |
| Main risk | Concentration, disputes and recourse repurchase |
Who it is usually for
- B2B or government invoices that are not already pledged
- Customers a partner is willing to underwrite
- An invoicing process that can be verified
What partners typically ask for
- Aged receivables and recent invoice samples
- Customer names, terms and concentration
- Proof of delivery or completion
- Existing liens or factoring agreements
Hypothetical 80% advance on a $50,000 invoice
If a partner advanced 80% of a $50,000 invoice, you would receive $40,000 after verification. A 2.5% fee on face value would cost $1,250 if the invoice paid on time. The remaining reserve, minus fees, would be released after the customer paid. If the agreement is recourse and the customer disputes the work, you may have to repay the advance. That is a structure walkthrough, not a quote.
Alternatives and when this is not a fit
Business line of credit
When you want cash without notifying customers or selling invoices.
Working capital
When invoices are too concentrated or not yet issued.
Compare written offers
Put a factoring fee next to a term-loan APR using the same dollars.
- Consumer invoices or cash-on-delivery sales
- Invoices already assigned to another lender or factor
- A single customer that a partner will not underwrite
Canadian invoice financing is a private-credit product. CSBFP is generally aimed at equipment, improvements and program-eligible uses, not at purchasing receivables.
Sources
- US Small Business Administration — funding programs — as of 2026-08-28
- Innovation, Science and Economic Development Canada — CSBFP — as of 2026-07-09
Submitting the application form sends your details so we can introduce you to a financing partner. Partners may compensate us. We do not guarantee an offer.
Frequently Asked Questions
Have more questions? Visit our full FAQ page or contact us.
Related financing guides
Explore the requirements, comparisons and decisions connected with this financing type.
Explore Other Financing Options
Unsecured Working Capital
Explore short-term business financing that may not require specific business assets as collateral. Eligibility and repayment terms vary by financing partner.
Learn MoreEquipment Financing
Explore financing for eligible business equipment such as vehicles, machinery or technology. Eligible assets and terms vary by financing partner.
Learn MoreBusiness Lines of Credit
Explore revolving business credit that can be drawn when needed, subject to a partner's approval, fees and account terms.
Learn MoreExplore Business Financing Options
Tell us about your business and financing needs. We may introduce your request to a third-party financing partner for review.