A/R Financing
You did the work. Your customers pay in 30, 60 or 90 days.A/R financing lets you borrow against those receivables as a revolving credit line, while you keep your invoices and keep collecting from your customers.
I’m Kevin Kermeen, a nationwide commercial loan broker, not a bank. I match your receivables with options from my 200+ capital partners.
7 days a week (Arizona Time)
What is A/R financing?
Accounts receivable financing is a loan or credit line secured by your unpaid business invoices. The capital partner looks at your receivables and your customers’ payment history, sets a borrowing base, and you draw what you need. As customers pay you, you pay down the line and your availability resets.
How It Works
- Send your aging report. Your A/R and A/P aging, recent bank statements and customer list.
- Get a borrowing base. Eligible receivables determine how much you can draw.
- Draw as needed. Use the line for payroll, materials or the next order.
- Collect and repay. Your customers keep paying you. You repay the line as cash comes in.
Factoring vs A/R Financing
Both turn unpaid B2B invoices into working cash. The difference is who owns the invoice and who collects.
| Question | Invoice factoring | A/R financing |
|---|---|---|
| What happens | You sell your invoices to a factor | You borrow against your receivables as a credit line |
| Cash up front | The factor typically advances 80–90% of the invoice; the balance, less charges, comes when your customer pays | You draw on a line sized to your eligible receivables |
| Who collects | Your customer pays the factor | You keep your invoices and collect from your customers yourself |
| On your books | Sale of an asset, not a loan | A loan / revolving line of credit |
| Size | $250K first purchase minimum, then no minimum; facilities up to $10M | Grows with your receivables |
| Often a fit for | Newer or fast-growing companies, credit that is less than perfect, owners who want collections handled | Established companies that want to keep customer relationships and collections in-house |
Not sure which fits? I compare both across my 200+ capital partners and walk you through it. See Invoice Factoring and A/R Financing.
A/R Financing for Construction
Contractors and subcontractors bill on pay apps and wait on draws and retainage while crews and suppliers need to be paid now. A line secured by your contract receivables can bridge the gap between progress billing and payment, so you can take the next job without draining reserves. Bonded work, retainage and lien waivers affect what counts as eligible, so tell me how your contracts are structured.
See also Construction business loans.
A/R Financing for Manufacturing
Manufacturers buy raw materials, run production, ship and then wait on net-30 to net-90 terms. A receivables line lets you fund the next production run from what customers already owe you, and scale as orders grow.
See also Manufacturing business loans.
What A/R Financing Can Look Like
The stories below are illustrative examples, not actual clients or results.
EXAMPLE · CONSTRUCTION
A concrete subcontractor
A subcontractor with steady general-contractor customers had several pay apps outstanding and a new job starting. A receivables line sized to those approved pay apps let the owner cover payroll and materials while still collecting from the GCs directly.
EXAMPLE · MANUFACTURING
A metal fabrication shop
A fabrication shop shipping to industrial buyers on net-60 terms landed a larger order. Borrowing against its existing receivables let it buy steel for the run and repay the line as invoices were paid.
What You Need to Get Started
- A/R and A/P aging reports
- Recent business bank statements
- Customer list
- Year-end and year-to-date financials (some capital partners)
A/R Financing FAQ
Is A/R financing the same as factoring?
No. With factoring you sell invoices and your customer pays the factor. With A/R financing you borrow against invoices and collect them yourself. See Invoice Factoring.
Is approval certain?
No. Every file is subject to credit approval, and terms are set by each capital partner.
How fast is funding?
It depends on the capital partner and how quickly documents are complete. I’ll give you a realistic timeline once I see your file.
Ready to Put Your Receivables to Work?
A bank gives you an answer. As your loan broker, I give you options.
Call Kevin (480) 915-8690 to discuss your situation, 7 days a week (Arizona Time), or apply at 75BizLoans.com.
7 days a week (Arizona Time)
Subject to credit approval. Terms vary. This is not a commitment to lend.