Factoring +
AR Financing
Put your unpaid invoices to work.
Explore access to working capital tied to eligible receivables, so customer payment terms don’t have to set the pace of your business.
Keep business moving while invoices await payment.
When your customers pay on terms, a busy order book can still leave a gap between delivering your work and receiving payment. Factoring and accounts receivable financing offer different ways to access capital tied to eligible unpaid invoices.
Factoring generally involves selling receivables to a factor. Accounts receivable financing generally involves borrowing against eligible receivables as collateral. The structure, costs, and collection arrangements depend on the agreement.
Midwest Funding Advisors helps you explore these options and connect with financing providers based on your receivables, cash flow needs, and business goals.
Discuss Your Cash Flow Needs
Support the business behind every invoice.
Start with the expenses and opportunities you want funding to support. Eligible uses and availability depend on the provider.
Support your team.
Discuss capital for payroll and related operating needs while customer invoices await payment.
Prepare for the next order.
Explore funds for replenishing stock, materials, and supplies needed to serve your customers.
Keep everyday work moving.
Discuss eligible operating expenses and the timing gaps in your cash flow cycle.
Plan for additional demand.
Explore how receivables-related funding could support the costs of taking on more business.
Manage payment timing.
Consider your supplier obligations alongside the payment terms you offer customers.
Navigate changing workloads.
Discuss short-term funding needs when a busy period creates expenses before customer payments arrive.
Two approaches.
One cash flow conversation.
The details matter. Understand what is being sold or pledged, who collects payment, and what obligations remain with your business.
Sell eligible receivables.
A factor purchases approved invoices. The agreement determines any advance, reserve, fees, customer notification, and collection process.
Borrow against receivables.
Eligible accounts receivable support a loan or credit facility. Available funding depends on the provider’s eligibility rules and advance terms.
Know your responsibilities.
Review recourse, disputed invoices, late payment, and customer nonpayment provisions. Do not assume the provider takes every collection or credit risk.
Bring your invoices.
Let’s talk through the details.
A productive first conversation starts with how you bill customers and when you expect to collect.
- Your accounts receivable aging report and outstanding balances
- Customer payment terms and payment history
- Invoice copies and evidence of completed delivery or service
- Customer concentration and any disputed or overdue invoices
- Existing financing or liens affecting your receivables
- Your funding needs and intended use of proceeds
The provider reviews invoice eligibility and customer credit quality as part of its assessment.
Request a Free ConsultationClarity before the next step.
Explore common questions, then discuss the structure that may fit your business.
Visit All FAQs ↗Is factoring the same as a business loan?
Factoring is generally a purchase of receivables, while AR financing is generally lending secured by receivables. Contract terms determine the arrangement and your obligations.
Will every invoice qualify?
No. Providers may assess invoice age, payment terms, customer credit quality, disputes, customer concentration, and existing liens. Approval of your business does not mean every invoice is eligible.
How much can be advanced?
The advance depends on eligible invoices and the agreement. It is typically less than the full invoice value; reserves, fees, and other adjustments may apply. Request a clear explanation of the amount initially available and any later settlement.
Will customers know about the arrangement?
They may. Factoring and some receivables financing arrangements involve customer notification or directing payments to a designated account. Confirm who communicates with customers and handles collections.
What happens if a customer doesn’t pay?
Your responsibilities depend on recourse provisions and the reason for nonpayment. Some agreements may require repayment or replacement of an invoice. Nonrecourse terms may still exclude disputes or other situations. Review the contract carefully.
How quickly can funding become available?
Timing depends on provider review, invoice verification, documentation, and any existing financing arrangements. Ask about both initial setup and later advances; immediate funding is not guaranteed.
Keep your funding options in view.
Lines Of Credit
Explore revolving credit for changing or recurring business needs.
Explore Lines Of Credit ↗Working Capital
Learn about financing for operating expenses and short-term cash flow needs.
Explore Working Capital ↗Asset-based Loans
Explore financing supported by eligible business assets.
Explore Asset-based Loans ↗Funding is subject to provider approval. Invoice eligibility, advances, reserves, fees, recourse, collection arrangements, and funding timelines vary by provider, program, and applicant qualifications.
Photography credits
Supporting photos via Unsplash by Kelly Sikkema and Reproductive Health Supplies Coalition .
Let’s talk about the capital tied up in your invoices.
Connect with Jeshua Morgan to explore factoring, AR financing, and other options for your business.