Accounts Receivable Financing
At Commercial Finance Partners, our streamlined approach converts outstanding invoices into working capital, ensuring your operations never stall. Count on our specialized expertise to fortify your cash flow and support scalable growth.
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AR Finance Details
Factoring
- Term sheet in 24-48 hours
Accounts Receivable Finance Services
Accounts receivable financing, or AR financing (also written A/R financing), is short-term funding that a business draws on using its receivables, so unpaid invoices become working capital. Factoring is the most common form for smaller businesses.
Commercial Finance Partners offers accounts receivable finance in two tiers. Accounts Receivable Finance (Direct) runs from $50,000 to $3,000,000, funded on our own balance sheet, with advance rates up to 90%+. Accounts Receivable Finance (Lender Network) runs from $3,000,000 to $25,000,000, placed through our network of factoring and ABL lenders.
Receivables Finance
Empower Liquid Operations:
- Consolidate various invoice funding options
- Balance risk across diverse clients
- Lower dependence on high-interest loans
- Gain predictable revenue timelines
- Fuel growth with immediate cash flow
Manufacturing Invoice Factoring
Strengthen Production Cycles:
- Cover raw material expenses promptly
- Mitigate supply chain disruptions
- Optimize labor scheduling
- Align funding with order volumes
- Keep pace with evolving demand
Staffing Invoice Factoring
Sustain Workforce Payments:
- Fund weekly or bi-weekly payroll
- Alleviate timing gaps between invoices
- Retain valuable talent
- Simplify back-office tasks
- Scale staff placements confidently
Invoice Factoring
Convert Receivables into Cash:
- Get faster advances for unpaid invoices
- Improve budget planning
- Offset delayed customer payments
- Reduce overhead tied to collections
- Maintain consistent working capital
Construction Factoring
Keep Projects on Schedule:
- Access funds from progress billing
- Manage labor and material costs
- Reduce reliance on traditional loans
- Bridge retentions quickly
- Enhance supplier relationships
Medical Factoring
Accelerate Your Healthcare Receivables:
- Convert claims into immediate funds
- Bridge long insurance payment cycles
- Strengthen your practice’s cash flow
- Reduce administrative burdens
- Expand patient care services
Commercial Finance Partners
Accounts Receivable Finance
Accounts Receivable Finance provides a transformative solution for businesses facing prolonged customer payment terms. By monetizing your receivables, you gain immediate capital to maintain regular expenses, invest in growth initiatives, or safeguard against market fluctuations. Commercial Finance Partners works closely with you to assess creditworthiness, manage collections, and structure funding that aligns with your operational demands. We believe that a healthy cash flow fosters resilience and opportunity, whether you’re expanding into new territories or fortifying existing operations. Through transparent terms and personalized support, our goal is to ensure you never miss a beat in your quest for long-term success.
Because every enterprise has unique billing cycles and client relationships, we tailor our programs to fit your industry and scale. Our hands-on approach involves understanding your invoicing patterns, seasonal fluctuations, and growth milestones, enabling us to provide targeted funding solutions. By optimizing your accounts receivable, you can proactively address cash shortfalls, reduce borrower fatigue from conventional loans, and unlock additional credit capacity. Commercial Finance Partners offers a collaborative experience, combining expertise, responsiveness, and integrity to keep your revenue steady. Ultimately, our customized offerings drive efficiency, letting you focus on delivering exceptional products and services without the hassle of delayed payments.
Cash Flow Expertise
Rely on specialized knowledge that turns unpaid invoices into vital, growth-oriented resources for your operations.
Flexible Solutions
Enjoy structures tailored to your billing cycles, client profiles, and specific industry demands.
Accelerated Funding
Term sheet in 24 to 48 hours; same-day funding on verified invoices.
End-to-End Support
Our dedicated team handles collections and credit checks, easing administrative strain on your back-office.
Long-Term Partnership
We work alongside you as your business evolves, adjusting finance models to match changing realities.
Customer Testimonials
We pride ourselves in providing the best service and quality products in the industry. Read what our clients have to say about our service and products.
How to Leverage
Accounts Receivable Finance
Maximize the impact of Accounts Receivable Finance by mapping it to your sales pipeline and client payment histories. Target specific customer segments that tend to extend payment terms, and customize invoice funding arrangements to reduce the waiting period. With a systematic approach to credit evaluations and receivables oversight, you can proactively manage potential cash flow gaps. This strategic alignment ensures your operations remain robust, even when business volume surges or unexpected challenges arise.
Key Benefits of Leveraging Accounts Receivable Finance
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Maintain optimal cash flow by turning outstanding invoices into immediate capital, supporting timely payroll and critical investments.
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Reduce the risk of delayed or non-payments, as credit checks and collection efforts shift to dedicated professionals.
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Strengthen your business’s financial stability, minimizing reliance on high-interest loans or personal capital injections.
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Enhance vendor and supplier relationships by funding essential costs ahead of schedule, enabling negotiated discounts.
Regularly reviewing aging reports and forecasting upcoming receivables positions your business to capitalize on factoring or financing options at just the right time. Collaborate with your Commercial Finance Partners advisor to refine processes like invoice generation and follow-up protocols. By harmonizing internal controls with external funding, you not only accelerate collections but also strengthen overall financial stability. Through consistent monitoring and adjustment, you create a sustainable cycle of liquidity that fosters agility and confidence in the marketplace.
How Accounts Receivable Financing Works
Accounts receivable financing takes three major forms: accounts receivable loans, factoring and asset-backed securities. For smaller businesses, the most common form is factoring, which works in four steps:
- You sell your invoice to a factoring company.
- The factoring company advances you a percentage of the invoice amount, typically 70% to 90%. Commercial Finance Partners advances 90%+ on eligible receivables, funded from our own balance sheet.
- The factoring company collects repayment from your customer.
- The factoring company sends you the remainder of the invoice amount, minus fees, which usually run 1% to 5% per 30 days.
With an accounts receivable loan from a bank, you use your receivables as collateral, keep ownership of them and remain responsible for collecting from your customers. Banks usually advance 70% to 85% of eligible receivables, and some advance up to 90% against eligible business-to-business receivables.
Sources: Corporate Finance Institute; NerdWallet; Bankrate; U.S. Chamber of Commerce; OCC Comptroller’s Handbook.
Accounts Receivable Financing vs. Factoring
Factoring is one type of accounts receivable financing. The difference is ownership: with an accounts receivable loan, the business borrows against its receivables and still collects from its customers; with factoring, it sells the receivables at a discount and the factor collects the amounts owed. Factoring is not a loan, so there is no debt repayment.
Sources: Corporate Finance Institute; International Factoring Association.
Accounts Receivable Financing Solutions
Accounts Receivable Financing FAQs
What is accounts receivable financing?
Accounts receivable financing, also called AR financing, is a means of short-term funding that a business can draw on using its receivables. It is very useful when there is a timing mismatch between cash inflows and outflows. The three major types are accounts receivable loans, factoring and asset-backed securities.
How does accounts receivable financing work?
With factoring, the most common form for smaller businesses, you sell your invoice to a factoring company, which advances you a percentage of the invoice amount, typically 70% to 90%. Commercial Finance Partners advances 90%+ on eligible receivables, funded from our own balance sheet. The factoring company collects repayment from your customer and sends you the remainder of the invoice amount, minus fees. With an accounts receivable loan, you borrow against your receivables and collect from your customers yourself.
What is the difference between factoring and accounts receivable financing?
Factoring is one form of accounts receivable financing. With an accounts receivable loan, the business uses its receivables as collateral, still owns them and is responsible for collecting from its debtors. With factoring, the business sells its receivables to a factor at a discount, and the amounts are collected by the factor. Factoring is not a loan, so there is no debt repayment.
Are my clients notified if I finance my accounts receivable?
With factoring, usually yes. When you start working with a factoring company, it contacts your clients to inform them that it is managing your invoices, and customers are notified to remit payments directly to the factor. With an accounts receivable loan, you still own the receivables and remain responsible for collecting from your customers.
How much does accounts receivable financing cost?
Factoring fees usually run 1% to 5% of the invoice value per 30 days. Your fee depends on the invoice amount, your sales volume, your customer’s ability to repay and whether the agreement is recourse or non-recourse, and non-recourse plans tend to be more expensive and restrictive. Extra fees may include service fees, monthly minimum fees and origination fees.
The financing solutions provided by Commercial Finance Partners were exactly what I needed. Their team was professional and helped me every step of the way
Matthew Rodriguez Business Owner