What is accounts receivable financing?

Accounts receivable (AR) financing uses your outstanding invoices as collateral for a credit line — you borrow against what your customers owe you. Unlike factoring, you retain ownership of the invoices and collection responsibility; the lender simply holds a lien. AR lines typically advance 70-85% of eligible receivables at rates of 1-3% per month. It's best for B2B businesses with creditworthy customers and consistent invoice volume.