Accounts Receivable Financing

Accounts receivable financing is a loan method where a business uses its outstanding customer invoices—money owed to the business—as collateral to get quick funding. Instead of waiting for customers to pay, the business sells these invoices to a lender or factor at a discount. The lender then collects the full amount from the customers. This helps the business access cash immediately, improve cash flow, and fund operations or growth without waiting for customer payments. Essentially, it converts pending income into available funds, supporting financial stability and flexibility.