What are Accounts Receivable Loans?

Accounts Receivable Loans are short-term financing options where businesses use their unpaid customer invoices as collateral to secure immediate funds. This helps maintain cash flow while awaiting customer payments.

How AR Loans Work

1. Submit Receivables: The business presents a list of outstanding invoices.

2. Loan Advance: The lender advances 70–90% of the receivables’ value.

3. Repayment: When customers pay, the lender deducts the loaned amount and fees.

Example

A manufacturing company has $200,000 in outstanding invoices and borrows $160,000 (80%) against them for immediate working capital.

Benefits

• Provides quick access to funds

• No need for fixed-asset collateral

• Supports business growth without waiting for receivables