In accounts receivable financing through an asset-based lender, your business uses its outstanding invoices as collateral to secure immediate working capital. The lender will assess your accounts receivable and typically offer a percentage of the invoice value as an advance. Unlike factoring, which involves selling your invoices to a third party, asset-based lending is a loan secured by your receivables. Once your customers pay the invoices, the repayment goes to the lender, and the remaining balance (minus fees) is returned to your business. This type of financing allows you to maintain control over your customer relationships while leveraging your receivables to improve cash flow.
