Turn Unpaid Invoices into Working Capital
Order is confirmed, but nothing can be invoiced yet. Materials must be purchased first.
Raw materials, labor, and overhead are paid out of pocket over the production run.
Goods ship and the invoice is finally issued. The payment clock only starts now.
Distributor or retailer settles, often months after the first dollar was spent.
Yes, through PO financing rather than factoring. If you have a confirmed purchase order from a creditworthy buyer, capital can be advanced against supplier and production costs before an invoice exists. It is commonly paired with a factoring line so the facility continues once the order converts to a receivable.
Often yes. Structures can be designed to align with existing covenants and carve-outs, and true-sale A/R financing in particular is built to coexist with a senior facility. We review your existing documents before proposing anything.
Retail deductions, returns, and allowances are normal in manufacturing and are accounted for in the advance rate and reserve structure rather than treated as a disqualifier. Clean reporting on historical deduction rates helps considerably.
Under an asset-based lending structure, yes. ABL facilities can include inventory and equipment in the borrowing base alongside receivables, which is typically relevant at $5M and above.
Receivables-based facilities naturally expand and contract with your billing volume, which suits seasonal production better than a fixed-limit loan. Peak season capacity should be discussed up front so the facility is sized for your highest months.
