Invoice and receivables financing
Accounts Receivable Financing: Unlock the Invoices You Are Still Waiting On
Accounts receivable financing advances 70% to 90% of your eligible unpaid invoices now and settles the rest, less a fee of roughly 1% to 4% per 30 days, when your customer pays. Lines run from $20,000 to $5,000,000, approval follows your customers’ credit more than your own, and first funding typically lands within a week. RAN Funding compares factoring and receivables-backed lines from our funding partners and tells you which structure fits.
What Is Accounts Receivable Financing, and How Is It Different From Factoring?
Both use unpaid B2B invoices to get cash before the customer pays. Invoice factoring sells the receivable to a factor, which advances 70% to 90% up front, collects from your customer, and remits the balance minus its fee. Accounts receivable financing (a receivables-backed line or loan) keeps the invoices on your books as collateral and advances against a borrowing base; you keep collecting. Factoring is easier to qualify for and faster; an A/R line is usually cheaper and quieter. Through RAN Funding, facilities run from $20,000 to $5,000,000, cost roughly 1% to 4% per 30 days for factoring or 8% to 18% APR for an A/R line, and fund within about a week. RAN Funding is a broker; the funding partner sets the advance rate, reserve, fees, eligible invoices and whether customers are notified.
Stop Playing the Waiting Game
Net-30 and net-60 terms mean the work is done, the invoice is out and payroll is still due Friday. Receivables financing closes that gap: the funder reviews the invoices, the customers’ payment history and your business, sets an advance rate, and wires most of the invoice value within days. As customers pay, the reserve is released and new invoices can be submitted, so the facility grows with your sales.
Factoring sells the receivable; an A/R line borrows against it. The obligations, the cost and whether your customer hears about it all differ, so a specialist walks you through which structure you are being offered before you sign.
What to Have Ready Before You Apply
Documents required
- Accounts receivable aging report
- Sample invoices with proof of delivery or completed work
- Customer list with contact and payment history
- Last 3 months of business bank statements
- Articles of organization, voided check and driver’s license
Typical partner screening criteria
- Invoices to businesses or government, not consumers
- Customers with a track record of paying in 30 to 90 days
- $20,000+ a month in invoicing; $10,000+ for smaller programs
- No existing lien on receivables (or a lender willing to subordinate)
- Personal credit is secondary; 550+ opens most programs
Ready to See Your Options?
No obligation and a soft inquiry to check. A funding specialist comes back with the offers you qualify for.
The Complete Guide to Receivables Financing
How Invoice Factoring and A/R Financing Work
Whichever structure you use, the mechanics follow the same path: you deliver the goods or service and issue the invoice; the funder verifies it with your customer; you receive the advance; the customer pays; the funder releases the reserve less its fee.
A $48,000 net-60 invoice, factored at 85%
At a 3% fee for the 60 days ($1,440), the business receives $46,560 in total: $40,800 in two or three days and $5,760 when the customer pays.
Factoring: the factor owns the invoice, verifies it with your customer, and usually collects directly. Notification factoring tells the customer to pay the factor; non-notification factoring lets you keep collecting into a controlled account. A/R line: you submit a borrowing-base certificate (eligible invoices under 90 days times the advance rate), draw against it, and keep collecting; the lender audits periodically and files a UCC lien on receivables.
What Receivables Financing Costs
| Structure | Typical cost | How it is charged | Approximate annualized |
|---|---|---|---|
| Spot factoring (single invoices) | 2–4% per 30 days | Flat fee per invoice, often tiered by days outstanding | 25–50% |
| Contract factoring (monthly volume) | 1–2.5% per 30 days | Lower fee for committed volume; minimums apply | 12–30% |
| A/R line of credit | Prime + 2–8% (9–15%) plus 0.5–1.5% monitoring | Interest on the drawn balance | 10–18% |
| Asset-based lending (A/R + inventory) | Prime + 1–5% (8–12%) plus audit fees | Interest on the drawn balance | 9–14% |
Fees vary with your customers’ credit, how long they take to pay, your monthly volume and whether the program is recourse or non-recourse. Ask for the advance rate, the fee schedule by days outstanding, the reserve release timing, minimum volume, termination terms and any per-invoice, wire or monthly fees, then compare on total cost for a typical invoice. A factoring fee of 2% on a 30-day invoice sounds small; on a 90-day invoice the same schedule may be 6%.
Cost of advancing $100,000 of invoices for 45 days
Receivables financing prices on your customers’ credit; an MCA prices on your own. The difference on the same cash need is large.
Factoring vs A/R Financing vs Line of Credit
| Invoice factoring | A/R line of credit | Business line of credit | |
|---|---|---|---|
| What secures it | The invoices (sold) | The invoices (pledged) | Business assets / UCC; cash flow |
| Who collects | The factor (or you, non-notification) | You | You |
| Customer knows? | Usually, unless non-notification | Rarely | No |
| Qualifies on | Your customers’ credit | Your receivables and financials | Your deposits and credit |
| Minimum credit | 550+ (secondary) | 600+ | 640+ |
| Cost | 1–4% per 30 days | 9–18% APR | 8–60%+ APR |
| Size | $20K–$5M+ | $100K–$10M+ | $10K–$500K |
| Speed | 3–7 days | 1–3 weeks | 1–3 days |
| Best for | Young or credit-challenged B2B companies with good customers | Established companies with $1M+ in receivables | Businesses that need flexibility beyond invoices |
For most businesses under $2 million in revenue, factoring is the realistic entry point; once receivables and financials mature, an A/R line is the upgrade. See secured vs unsecured business lines of credit for how receivables compare with other collateral.
Recourse vs Non-Recourse, Notification and Other Terms to Understand
- Recourse factoring: if the customer does not pay within the agreed window (often 90 days), you buy the invoice back or replace it. Cheaper; most programs.
- Non-recourse factoring: the factor absorbs the loss if the customer becomes insolvent. Costs more, and it rarely covers disputes, returns or slow payment.
- Notification: the customer is told to pay the factor. Standard in trucking and staffing; some funders offer non-notification for established clients.
- Reserve: the 10% to 30% held back until the customer pays, released less the fee.
- Eligible invoices: usually under 90 days old, to business or government customers, for completed work, not disputed, and not already pledged.
- Concentration limits: funders cap the share of receivables from one customer, often at 25% to 50%.
- Term and minimums: contract programs may require a 6 to 12 month commitment and a monthly volume minimum, with termination fees if you leave early.
Industries That Use Receivables Financing Most
| Industry | Why it fits | Typical structure |
|---|---|---|
| Trucking and freight | Brokers pay in 30–45 days; fuel and drivers are paid weekly | Notification factoring, often same-day on verified loads |
| Staffing agencies | Weekly payroll against net-30 to net-60 client invoices | Contract factoring or A/R line |
| Manufacturing and wholesale | Large invoices to retailers and distributors on net-60 | A/R line or asset-based lending with inventory |
| Construction subcontractors | Progress billing and retainage | Specialized construction factoring |
| Government contractors | Federal and state payment cycles of 30–90 days | Factoring with assignment of claims |
| B2B services, IT and consulting | Project invoices to larger clients | Spot or contract factoring |
How to Qualify and Get the Best Terms
- Clean up the aging report. Invoices over 90 days are ineligible; collect or write them off before applying.
- Document delivery. Signed proofs of delivery, timesheets or acceptance emails make verification fast.
- Diversify customers if you can. One customer at 70% of receivables triggers concentration limits and higher fees.
- Check for existing liens. A prior UCC on receivables from an MCA or bank must be released or subordinated first.
- Compare on total cost per typical invoice, including reserve timing, minimums and termination terms, not the headline rate.
- Ask about non-notification if customer relationships are sensitive; it is available more often than owners assume.
What Happens After You Apply With RAN Funding
Your application is handled in house. One RAN Funding specialist reads your statements the same day, presents the file to the best-matched funders in our network for the best deal (not to a list of a hundred), brings the approvals back and compares total payback, payment and term with you. Your information is not resold as a lead, and you are not contacted by lenders you never chose; you hear from one person, in English or Spanish, from the first call through funding and renewal.
- One application, one soft pull, three months of bank statements.
- One specialist, not a call list.
- Offers side by side with total payback before you decide.
- Business financing only: working capital, lines of credit, term loans, equipment, receivables and SBA.
How this differs from a loan marketplace is laid out in RAN Funding vs. Lendio, Fundera and LendingTree.
When Receivables Financing Is Not the Right Tool
If you sell to consumers, invoice on delivery or get paid by card, there are no receivables to finance; a business line of credit or revenue-based financing fits instead. If the need is a one-time purchase rather than a timing gap, a term loan or equipment financing costs less. And if receivables are already pledged to a bank line, ask that lender to increase the line before adding a factor; a second lien on A/R is rarely available.
Accounts Receivable Loans: Lenders, Rates and How to Borrow Against Receivables
Accounts Receivable Loans vs Factoring: Which Is Which
Owners search for “accounts receivable loans,” “loans against receivables,” “A/R financing” and “factoring” as if they were one product. They are three, and the difference decides who collects from your customers and what you pay.
| Accounts receivable loan (A/R line) | Invoice factoring | Selective / spot factoring | |
|---|---|---|---|
| What it is | A revolving line secured by your receivables; you keep collecting | The factor buys your invoices and collects from your customers | You sell one invoice at a time |
| Advance | 70% – 85% of eligible receivables under 90 days | 80% – 90% of each invoice up front, balance less fee on payment | 80% – 90% of the chosen invoice |
| Cost at Prime 7.00% | 8% – 20% APR plus facility fees | 1% – 4% of invoice per 30 days | 2% – 5% per 30 days |
| Who is underwritten | Your business and your receivables aging | Mostly your customers’ credit | The one customer |
| Customer notification | Usually none | Yes (notification) or no (non-notification, at a cost) | Yes |
| Typical size | $50K – $5M | $25K – $10M+, grows with billing | $10K – $500K per invoice |
| Time to set up | 1 – 2 weeks | 3 – 7 days; 24 hours per invoice after | 2 – 5 days |
| Best for | Established B2B companies with clean agings that want to keep collections in-house | Staffing, trucking, construction, wholesale and anyone with weaker personal credit | A one-off large invoice |
If you want to borrow against receivables without your customers knowing and you have 12 months of history and clean books, ask for an A/R line. If you want speed, the facility to grow with sales and no personal-credit hurdle, factoring is the product. Industry-specific detail: staffing agencies, contractors, wholesalers, trucking.
Accounts Receivable Lenders and Factoring Companies: Who Offers It
Receivables financing comes from four kinds of providers, and the right one depends on invoice size, industry and how much you bill a month.
- Independent factoring companies (most volume in staffing, trucking, construction and manufacturing): $25,000 to $10 million facilities, 1% – 4% per 30 days, approvals in days, industry specialists for staffing and freight.
- Banks and asset-based lenders: A/R lines at Prime plus 1 to 6 for companies with $1 million-plus in receivables, two or more years of history and reviewed financials; the cheapest route when you qualify.
- Online receivables platforms: spot and selective factoring from $10,000 per invoice, fast and flexible, priced higher per invoice.
- Brokers: RAN Funding places receivables files with factors, asset-based lenders and online platforms on one application, and tells you which structure fits before the hard inquiry.
Approval odds are the highest of any product because the underwriting is on your customers: in the Federal Reserve’s 2026 survey, 81% of financing applicants were approved for at least part of their request, and secured products led the full-approval rates (equipment loans 71%). Receivables financing is not broken out, but factors routinely approve files with personal credit under 600 when the customers are creditworthy. See business loan approval rates in 2026 and invoice factoring vs business loans.
What a $100,000 Receivable Costs to Finance
| Option | Cash released | Cost if paid at 45 days | Cost if paid at 75 days |
|---|---|---|---|
| Factoring, 90% advance, 1.5% per 30 days | $90,000 within 24 hours | About $2,250 | About $3,750 |
| Factoring, 85% advance, 3% per 30 days | $85,000 | About $4,500 | About $7,500 |
| A/R line, 80% advance, 14% APR | $80,000 | About $1,380 | About $2,300 |
| Business line of credit, 2.5% draw fee, 12-month draw | $100,000 | $2,500 (plus weekly amortization) | $2,500 |
| Revenue-based advance, factor 1.25 | $100,000 | $25,000 regardless | $25,000 regardless |
Cost of financing a $100,000 receivable paid at 45 days, by product
Receivables-based products cost a fraction of an advance for the same cash because the invoice, not future sales, is the collateral.
With Prime at 7.00% since September 17, 2026, bank A/R lines repriced a quarter point; factoring fees did not move. Compare any structure in the factor rate calculator and the business loan payment calculator.
Turn Open Invoices Into Cash This Week
If your customers pay on 30, 60 or 90-day terms, receivables financing advances most of the invoice value now and settles the balance when they pay. Approval follows your customers’ creditworthiness as much as your own.
- From $20,000. Facilities up to $5 million for companies with strong, diversified receivables.
- Your aging report. An accounts receivable aging, sample invoices and three months of statements to start.
- One specialist. The same person from application to funding, paid by the funder.
Go Deeper on Cash-Flow Financing
How receivables financing compares with the other products businesses use to bridge slow-paying customers.
Invoice Financing and Factoring Questions, Answered
Will my customer know about the arrangement?
With notification factoring, yes: the customer is directed to pay the factor. Non-notification factoring and A/R lines let you keep collecting, so the customer usually does not know. Ask which you are being offered before assigning an invoice.
What if a customer does not pay?
Under recourse factoring you buy back or replace the invoice after the agreed window, typically 90 days. Non-recourse programs absorb the loss if the customer becomes insolvent, but usually not for disputes, returns or slow payment.
How much of an invoice can I get up front?
Typically 70% to 90% of the eligible invoice, with the balance released when the customer pays, less the fee. Trucking and staffing often see 90% or more; construction and retainage-heavy industries less.
What does invoice factoring cost?
Roughly 1% to 4% per 30 days depending on your customers’ credit, volume and payment speed. A/R lines cost 9% to 18% APR plus monitoring fees. Compare offers on total cost for a typical invoice over its typical payment period.
Do I need good credit?
Not necessarily. Factoring qualifies primarily on your customers’ credit and the quality of the invoices; 550+ opens most programs. A/R lines look more closely at your financials and generally want 600+.
How fast can I get funded?
Setup takes three to seven days for factoring and one to three weeks for an A/R line. After setup, verified invoices are typically funded the same or next business day.
Can I factor only some invoices?
Yes, with spot factoring, which prices higher per invoice. Contract programs with monthly minimums cost less but require committing most or all of your receivables.
Is RAN Funding the factor or lender?
No. RAN Funding is a business financing broker. We present eligible receivables to funding partners, compare the structures offered, and the funding partner determines the advance rate, reserve, fees, eligible invoices and approval.
See our application preparation guide and broker and compensation disclosure. Approval and terms depend on the funding partner. Fee and advance ranges are typical of offers in the RAN Funding network as of October 2026 and are not an offer of credit. Reviewed 21 October 2026.