Accounts Receivable Financing

Turn Unpaid Invoices Into Working Capital

Your business may be profitable and growing, but waiting 30, 60, or 90 days for customers to pay can create significant pressure on cash flow.

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Accounts receivable financing can help qualifying businesses access working capital based on eligible unpaid customer invoices.

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Lirodean helps companies evaluate receivables-based financing solutions through banks, asset-based lenders, factoring companies, and alternative financing providers.

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How Does Accounts Receivable Financing Work?

Instead of relying solely on historical cash flow, a lender may evaluate the quality of your company’s accounts receivable.

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Eligible receivables may support a revolving credit facility or another financing structure.

As customers pay their invoices and new eligible receivables are generated, borrowing availability may change according to the terms of the facility.

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Who Can Benefit?

Accounts receivable financing may be appropriate for companies that:

• Sell primarily to other businesses

• Have creditworthy customers

• Offer customers extended payment terms

• Are experiencing rapid growth

• Need additional working capital

• Have significant outstanding invoices

• Need to fund payroll, inventory, suppliers, or new projects

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What Do Lenders Evaluate?

Factors may include:

• Accounts receivable aging

• Customer credit quality

• Customer concentration

• Invoice eligibility

• Payment history

• Dilution and disputes

• Historical financial performance

• Existing liens and debt

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My Customers Pay in 60 or 90 Days. What Can I Do?

Long customer payment terms can create a working capital gap.

Your business may need to pay employees, suppliers, rent, inventory, and project expenses long before customers pay their invoices.

Receivables-based financing can potentially bridge this gap by providing access to liquidity against eligible invoices.

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Accounts Receivable Financing vs. Factoring

Both can provide liquidity based on receivables, but the structures can differ.

Factoring generally involves the sale of eligible invoices to a factoring company.

Accounts receivable financing may instead involve a credit facility secured by receivables.

The appropriate structure depends on the company, customers, financial profile, and financing requirements.

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Can I Borrow Against My Company’s Accounts Receivable?

Potentially.

Businesses with eligible B2B receivables may be able to use those receivables to support a credit facility.

Lirodean can evaluate your AR aging and overall financing requirements to determine which financing structures may be appropriate.

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Turn Receivables Into Liquidity

If your company has substantial unpaid customer invoices and needs additional working capital, receivables-based financing may provide a solution.