Buying Accounts Receivable May 2026

Provides immediate cash flow to meet payroll or operational expenses without taking on traditional debt.

Buying accounts receivable (AR), also known as , is a financial transaction where a third-party buyer (a "factor") purchases a company's outstanding invoices at a discount to provide that company with immediate liquidity. How the Transaction Works The process typically follows these structured steps: buying accounts receivable

: The buyer provides an upfront cash payment, typically 70% to 90% of the invoice's face value. Provides immediate cash flow to meet payroll or

Easier to qualify for than bank loans, as it relies on customer credit. : Earns a profit from the discount and service fees. Easier to qualify for than bank loans, as

: The buyer takes responsibility for collecting the full payment directly from the customers.

Transfers the administrative burden of collections to the buyer.