Best Accounts Receivable Financing Lenders

Use your A/R as collateral to fund your business.

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Written by
Tara Mastroeni
Updated on: June 30, 2025
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Best accounts receivable financing lenders: More details

TD Bank: Best for lines of credit

$25,000 to $500,000

Not disclosed

Not disclosed

Pros
  • Offers multiple business banking products, making it possible to create a one-stop-shop for your business finances
  • Provides ongoing access to funding
Cons
  • Not transparent about its rates, fees or qualifying criteria
  • Payments must be automatically deducted from a checking account

Why we picked it

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TD Bank offers a business line of credit where your unpaid invoices can act as collateral. Once you pay it down, you can borrow against it again, up to your credit limit, making it a good fit for those who need ongoing access to funding.

Still, TD Bank isn’t very upfront about its fees or qualifying criteria, which can make it hard to tell if this financing product is the right fit for you. What’s more, your payments must be automatically deducted from your checking account.

Read our full TD Bank review.

How to qualify

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TD Bank doesn’t disclose the minimum credit score, time in business or annual revenue you’ll need to qualify. Apply online or contact the lender directly to learn if your business qualifies for a line of credit.

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1st Commerical Credit: Large Loan Amounts

$3,000,000

Varies based on financing type

3 to 5 days

Pros
  • Offers large loan amounts — $3,000,000 minimum
  • Will also accept inventory and equipment as collateral
Cons
  • Longer funding time than some competitors (3 to 5 days)
  • High revenue requirements

Why we picked it

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If you need to finance a larger purchase or expansion, 1st Commerical Credit could be a good option. Its funding amounts start at $3,000,000, giving you access to plenty of funds to cover your cash flow needs. In addition, it also allows you to use inventory and equipment as collateral in addition to accounts receivable, if needed. And if you prefer to sell your invoices outright, the lender also offers invoice factoring.

However, it may take longer to receive your funding from this lender than from others. This company asks customers to allow three to five days for the funds to hit their account, while others can deliver them within 24 hours.

Learn more about 1st Commerical Credit.

How to qualify

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1st Commerical Credit specifies that it works best with clients who have a monthly sales volume of $2.5 million to $10 million and 60-day net payment terms on their invoices.

However, it doesn’t specify what else is needed to qualify. Contact the lender directly to see what’s necessary.

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First Business Bank: Best for industry-specific guidance

85%

Not disclosed

Not disclosed

Pros
  • Specializes in working with certain industries, including manufacturing, distribution and wholesale service providers
  • Offers other business banking products, such as company retirement plans and SBA loans
Cons
  • Doesn’t publicize eligibility or service fee information
  • Lower advance rate than some competitors

Why we picked it

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Those who work in wholesale, distribution, manufacturing or business services industries may want to work with First Business Bank. The bank claims to be well-versed in these sectors, enabling it to provide in-depth guidance throughout the financing process. Plus, since it is a bank, you’d have the opportunity to use it for additional business services that might come up in the future.

That said, at 85%, its maximum advance rate is lower than some competitors. It’s a good idea to evaluate your cash flow and figure out what advance rate your business needs before deciding if it’s a good fit. The bank also doesn’t list its eligibility or fee information, which can make it difficult to tell if the bank is the right fit for you before speaking with a team member.

Learn more about First Business Bank.

How to qualify

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First Business Bank specifies that it typically works with sales of at least $10 million. For smaller businesses, it also offers invoice factoring starting at $100,000.

The bank doesn’t disclose the exact minimum credit score, time in business or annual revenue you’ll need to qualify. Apply online or contact the lender directly to learn if your business qualifies for financing.

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Live Oak Bank: Best for lower-revenue businesses

90%

Not disclosed

Not disclosed

Pros
  • Focuses on working with businesses that make less than $125 million in revenue
  • Also offers traditional business loan products
Cons
  • Doesn’t disclose much rate or eligibility information online
  • Lower advance rate than some competitors

Why we picked it

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Live Oak Bank specializes in providing A/R financing for businesses that bring in less than $125 million in revenue, making it our pick for lower-revenue businesses. It’s also a smart pick if you see your business needing more traditional forms of small business financing in the future, because it offers everything from commercial loans to microloans.

Unfortunately, though, the bank doesn’t post many of its financing details online, which can leave borrowers uncertain about whether they’ll qualify, and its advance rate is lower than some of the other lenders on this list.

Read our full Live Oak Bank review.

How to qualify

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In order to qualify, you’ll need to meet Live Oak Bank’’s criteria of:

  • Minimum credit score: Not disclosed
  • Minimum time in business: Not disclosed
  • Minimum annual revenue: Less than $125 million
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FundThrough: Best for 100% advance rates

100%

2.20% per month

Same day (after initial funding round, which can take a few days)

Pros
  • 100% advance rate available
  • Same-day funding available after initial funding round
  • Integrates with Quickbooks and OpenInvoice
Cons
  • Higher than average service fees
  • Doesn’t fund the construction or real estate industries

Why we picked it

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If you’d like an advance on the full amount of your unpaid invoices, think about using FundThrough. FundThrough technically offers invoice factoring, not invoice financing, which means that after you receive funding, your customers will pay FundThrough directly.

The platform integrates with Quickbooks and OpenInvoice, making it easy to keep track of what you’ve borrowed and, once you’re an established customer, you’ll have the option to take advantage of same-day funding.

But keep in mind that, at 2.20%, FundThrough’s service fees are higher than most of the competitors on this list. Additionally, the company won’t fund your invoices if you work in the construction or real estate industries.

Learn more about FundThrough.

How to qualify

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FundThrough doesn’t disclose the exact minimum credit score, time in business or annual revenue you’ll need to qualify. Apply online or contact the lender directly to learn if your business qualifies for financing.

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What is accounts receivable financing?

Accounts receivable financing, or A/R financing, is a form of asset-based lending that allows businesses to borrow against their unpaid invoices in exchange for short-term funding.

Essentially, the lender advances a small business loan or line of credit, using the business’s unpaid invoices as collateral to secure the funding.

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How does accounts receivable financing work?

Accounts receivable financing is a type of loan where a company’s unpaid invoices — accounts receivable — act as collateral.

With an accounts receivable loan, your lender advances a percentage of the invoice value, potentially up to 100%, as either a term loan or line of credit. Then, when your customer pays their invoice, you pay back the loan plus any fees and interest.

Here’s a step-by-step look at how A/R financing works.

  1. Apply for accounts receivable financing. First, you decide which invoices to submit as collateral to a lender. It’s best to only use receivables from customers who are reliable and have a history of paying their invoices on time. If you’re working with new customers or are uncertain about the reliability of existing customers, it’s best to wait until they are more established.
  2. Get funded. Once your application is approved, the A/R financing company will tell you your advance rate or the percentage of your invoices that you can receive upfront. This rate can potentially be as high as 100%, though generally in the 80% to 90% range. If you accept it, along with any other financing terms, the advance amount will be given to you, usually as either a loan or line of credit.
  3. Your customer pays your invoice. With accounts receivable financing, your customer pays you directly for the invoice they received, meaning you still retain ownership of it. This is different from the process of accounts receivable factoring, where instead of receiving payment from your own customer, the factoring company pays you for the invoice and then collects payments from your customer.
  4. You repay the accounts receivable financing company. Once your customer pays the invoice, you pay back the loan or line of credit plus a fee and/or interest. Alternatively, with some loans that use accounts receivable as financing, you may need to make payments on a set schedule regardless of when your invoices are paid.

 Understanding A/R financing fees

Instead of charging a true business loan interest rate, A/R financing lenders may charge you a service fee — usually expressed as a percentage of the invoice — for each week the invoice goes unpaid. That’s why, if you’re going to go this route, it makes sense to finance invoices from customers with timely payment histories.

Over time, going this route can be more expensive than other types of business financing.

Accounts receivable financing vs. accounts receivable factoring

People often confuse accounts receivable financing and accounts receivable factoring — also known as invoice factoring or factoring receivables. They sound similar, but they refer to two different financing arrangements.

The difference between the two is how the invoices are used.

With accounts receivable factoring, a factoring company pays you a percentage of the invoice amount upfront and then collects payments from your customer on your behalf.

With A/R financing, you maintain ownership of the invoices but leverage them as collateral to obtain a loan or line of credit. Most of the time, you are responsible for collecting payment on your invoices and using those funds to pay back your loan. However, most A/R financing companies will file a UCC-1 statement, which allows them to collect payment directly from your customers in the event that you default on the loan.

 Who is accounts receivable financing for?

For A/R financing to be successful, your business needs a steady flow of invoices and reliable customers who pay their invoices on time. Otherwise, it can be difficult to keep up with payments.

It can be an attractive option for businesses that can’t get approved for a traditional small business loan. Because the invoices serve as collateral, lenders may be willing to work with you, even if you have a low credit score or no prior borrowing history.

This type of funding is usually a short-term financing option. This means it’s usually best for short-term working capital needs — not for long-term financing needs like buying real estate.

Types of accounts receivable financing

The two main types of accounts receivable financing are:

  • Factoring. Invoice factoring is a form of financing in which a company sells its invoices to a factoring company in exchange for immediate cash. The factoring company then collects payments from the company’s customers.
  • Accounts receivable loan. An accounts receivable loan is a type of funding that allows you to use your receivables as collateral for a loan or line of credit.

Pros and cons of accounts receivable financing

If your business credit history is lacking, but you have high-quality customers or are a B2B company, accounts receivable financing might be right for you. You’ll want to consider the advantages and disadvantages so you can decide if it’s the right option for your business.

Pros

Quick access to cash. There isn’t a lengthy loan application and underwriting process, so you can get the financing you need fairly quickly.

Minimal credit requirements. Your invoices act as collateral, which means lenders are more concerned about your customers’ creditworthiness and payment history, so you usually don’t need a good credit score to qualify.

Low risk. Because you’re borrowing against money already owed to your business (rather than future sales that aren’t guaranteed), the risk of not being able to repay the loan or line of credit is low.

Cons

Need quality invoices. Businesses without a steady stream of invoices and reliable customers may have a hard time qualifying for this type of financing.

Cost. Lenders may charge interest rates on the loan or line of credit, a funding fee based on the loan amount and other fees, such as application, maintenance and processing fees, which can add up quickly.

Risk of customers defaulting. If your customers don’t pay their invoices, you may be unable to repay your loan or line of credit, putting you at risk for late payment charges and other financial troubles.

Customers may be hesitant. If your agreement requires customers to pay your lenders directly, they may have questions about the arrangement or feel uncertain about their invoices being used as collateral.

How to apply for accounts receivable financing

Here are some simple steps you can take to apply for accounts receivable financing.

1. Evaluate your invoices.

If you can choose which customers to submit for accounts receivable financing, choose those who usually pay their bills on time. Avoid choosing invoices from new or unreliable customers.

2. Compare lenders

Research available A/R financing lenders (more on that below). Be sure to look for lenders that offer a high advance rate and low service fees.

3. Gather required documents and submit.

While the documentation requirements vary by lender, some common ones include:

  • Your accounts receivable aging report
  • Basic business details, such as your business license, articles of partnership or incorporation and your employee identification number (EIN) or tax identification number
  • Copies of recent tax returns or bank statements
  • Information about outstanding invoices

The lender may also check your business and personal credit score when you apply.

4. Get funding.

Getting approved for accounts receivable financing and setting up your loan or line of credit may take as long as three or four weeks. But once approved, you’ll receive your funds in a matter of days.

You’ll then have to repay the borrowed amount as well as any interest or fees, usually within a few weeks or months. Typically, your customers will pay you directly, and you then pay the lender what you owe.

Alternatives to accounts receivable financing

If accounts receivable financing isn’t the right choice for your business, here are some alternative options:

  • Invoice factoring: Again, factoring companies will collect the balances on your unpaid invoices on your behalf.
  • Merchant cash advances (MCAs): Merchant cash advances will use a percentage of your credit card sales to advance the money you need. However, like A/R financing, these companies can charge higher interest rates.
  • Short-term business loans: If you have a decent credit score, you may be able to qualify for a short-term business loan, which may offer the funding you need with more affordable interest rates.

How we chose the best accounts receivable financing lenders

We looked at over 40 accounts receivable financing lenders to come up with a list of the seven best options. Here’s the criteria we used to make our decisions:

  • Specializes in A/R financing: We chose lenders that offer accounts receivable financing, as opposed to invoice factoring or another form of asset-based lending.
  • Offers a high advance rate: Advance rates can vary by lender, but we prioritized those that will offer a 90% advance or higher.
  • Charges an affordable service fee: We focused on finding lenders that charge a lower service fee.
  • Provides a quick funding time: We tried to select lenders that could provide fast funding, ideally in 24 hours or less.