Use Case
Financing Against Unpaid Invoices
You did the work, you sent the invoice, and now you are waiting 30, 60, or 90 days to get paid while payroll and suppliers keep to their own schedule. That gap is one of the most common reasons a profitable business runs short of cash, and it is one of the most straightforward to finance, because the money is already owed to you.
Last updated: August 2026
What is receivables financing?
It is any structure that turns money your customers owe you into money you can use now. The invoice itself is the strength of the deal: the work is done, the amount is agreed, and a third party is contractually obliged to pay it. That makes this easier to finance than most needs, and it usually means better terms than general-purpose capital.
Why do net 30, 60, and 90 terms cause cash problems?
Because your costs do not run on your customer's calendar. You pay for labour and materials when the work happens, and you get paid a month to a quarter later. Every time you win more work, the gap gets wider, which is why growing businesses feel this more sharply than flat ones.
It is a timing problem, not a profitability problem, and it is worth being clear about which one you have before financing it.
What are the options for bridging delayed receivables?
| Structure | How it works | Best when | What it depends on |
|---|---|---|---|
| Invoice factoring | You sell specific invoices and receive most of the value up front | The invoices are already issued and your customers are creditworthy | Your customer's credit, more than yours |
| Line of credit | A revolving facility you draw on and repay as invoices clear | The gap recurs every month and you want it arranged in advance | Your business profile |
| Asset-based financing | A facility secured against receivables as a pool rather than invoice by invoice | Receivables are large and continuous | The quality of the whole ledger |
| Revenue advance | Repayment moves with your deposits | You need speed and the receivable is not clean enough to factor | Your deposit history |
Which option is usually the best fit?
If the invoices are issued and your customers pay reliably, factoring is normally the most natural fit, because it is priced against the thing that is actually strong. If the gap is a permanent feature of how your business runs rather than an occasional squeeze, a line of credit arranged in advance is usually cheaper and less disruptive than factoring invoice by invoice.
Compare factoring and a line of credit directly.
We are not going to name a winner without seeing your numbers, and anyone who does is guessing.
Does my customer find out?
Sometimes, and it depends on the structure. Some factoring arrangements are disclosed, meaning your customer is notified and pays the funder directly. Others are not. If preserving the customer relationship matters, say so early, because it changes which options are worth pursuing.
How fast can this move?
Receivables structures are among the quicker ones, because the diligence is largely about an invoice that already exists. Once documents are in, funding can move in as little as a day or two, though it varies by structure and by funder. A first facility takes longer to set up than subsequent draws on it.
What do you need to qualify?
Broadly: invoices to creditworthy business or government customers, work that is genuinely delivered, and clean records tying the two together. Consumer receivables generally do not work. Disputed or partially delivered invoices generally do not either.
When is this the wrong answer?
When the customer is not going to pay. Financing a receivable does not make a bad debt good, and if collectability is the real question, this is a collections problem wearing a financing costume.
When the gap is permanent and widening. If receivables financing is covering a shortfall that grows every month regardless of sales, the underlying issue is margin or pricing, and more capital buys time rather than a fix.
When you are already carrying several active advances. Adding another obligation on top usually breaches agreements already signed and turns a fixable problem into an unfixable one. In that situation the right conversation is about restructuring what exists. We will not put a consolidation loan in front of a business in that position.
Frequently asked questions
Waiting on money that is already yours?
Tell us what your invoices look like and who owes them, and we will give you a straight read on which structure fits, including when the honest answer is that you do not need one.