Quick answer: Accounts receivable financing — also called receivables finance — is funding raised against the value of a business’s unpaid customer invoices, giving access to cash before customers actually pay. In South Africa, this is most commonly arranged as invoice discounting. See our invoice discounting page for how New Heights Finance arranges this type of funding, with facilities starting from a R50,000 minimum and funds typically available within 24 hours of approval.
Related: Invoice discounting · Purchase order funding
Key facts
| What it is | Funding advanced against the value of outstanding customer invoices |
| Also called | Invoice discounting, receivables finance, debtor finance |
| Typical advance | A percentage of the invoice value upfront; the balance, less fees, on customer payment |
| Who arranges it | New Heights Finance, as a broker, across a panel of lenders — see invoice discounting |
What is accounts receivable financing?
A business’s “accounts receivable” is the money owed by customers for goods or services already delivered, usually on 30-to-90-day payment terms. Accounts receivable financing unlocks the value of those outstanding invoices early, rather than waiting the full payment term for customers to pay.
Is accounts receivable financing the same as invoice discounting?
Yes — in South Africa’s market, these terms describe essentially the same thing: funding advanced against unpaid invoices. “Accounts receivable financing” is more of an accounting and finance-textbook term, while “invoice discounting” is the term more commonly used by South African lenders and brokers, including New Heights Finance. See our invoice discounting page for how it works here, including facility minimums and typical turnaround.
How does accounts receivable financing work?
- You issue an invoice to a customer on standard payment terms (typically 30 to 90 days).
- A lender advances a percentage of that invoice’s value upfront.
- Your customer pays the invoice as normal, on its due date.
- The lender releases the remaining balance, less fees.
Accounts receivable financing vs other working capital options
| Accounts receivable financing | Working capital loan | Purchase order funding | |
|---|---|---|---|
| Based on | The value of issued, unpaid invoices | Turnover and trading history | A confirmed customer order, before invoicing |
| Best for | Businesses waiting on slow-paying customers | A general cash-flow gap | Fulfilling an order before you’re able to invoice |
| Security | Effectively secured against the invoice itself | Varies by lender | Effectively secured against the order |
Who qualifies for accounts receivable financing?
Lenders typically look at the creditworthiness of your customers — since they’re the ones ultimately paying the invoice — alongside your own trading history and the overall quality of your debtor’s book.
FAQs
What’s the difference between accounts receivable financing and factoring?
They’re closely related — both advance funds against invoices. Financing or discounting is usually confidential (your customer doesn’t know it’s happening), while factoring often involves the funder managing collections directly. Confirm which structure a specific lender offers before signing.
Can I finance just one invoice, or does it have to be my whole debtor’s book?
This varies by lender. Some offer facilities against your full book of invoices, while others can fund selected invoices individually — speak to New Heights Finance to confirm the structures available on its current lender panel.
Is accounts receivable financing secured or unsecured?
It’s effectively secured against the invoices themselves, rather than requiring a separate asset as collateral.
Does New Heights Finance arrange accounts receivable financing?
Yes — New Heights Finance arranges this as invoice discounting through its lender panel, with facilities starting from a R50,000 minimum. See our invoice discounting page for detail and to get started.
Waiting on unpaid invoices? Learn more about invoice discounting with New Heights Finance.