How we make money: The Business Funding Club is a referral service, not a lender and not a broker. We refer businesses that ask for capital to ROK Financial. ROK and the lenders it matches you with make every funding decision. ROK pays us when a business we refer receives funding. It is free to you, and nothing here is an offer of credit. Read the full disclosure.

Illustration of staged pallets at a shipping dock beside an invoice tray

Financing types

You did the work. The invoice is good. The money is sixty days out.

Receivables financing turns unpaid invoices into cash now, either as a loan secured by the invoices or as a sale of them. Purchase order financing comes one step earlier and pays the supplier so you can fill the order. The Business Funding Club refers you to ROK Financial. ROK and the lenders it matches you with review every request and make every funding decision.

Start your application

A referral club, free to apply. ROK Financial and its lenders review every request and make all funding decisions. How we’re compensated.

Prefer to go straight to the funder? You can apply on ROK's own site. It carries our referral ID.

By Marcus L. Barber, Publisher · Reviewed by Marcus before publishing · Updated · How we write and check facts

What it is

There are three related tools. Accounts receivable financing is a loan or credit line secured by your unpaid invoices, repaid as those invoices are collected[1]. Factoring is a sale. A factor buys your invoices at a discount, usually takes on the credit risk, and your customers are often told to pay the factor directly[1]. Purchase order financing pays for sourcing or producing what a buyer has ordered, and is repaid when the buyer pays[2].

Where it fits

  • You bill other businesses or government agencies, and they pay on terms.
  • A strong customer with a slow payment cycle, such as a prime contractor, a freight broker or a federal agency.
  • A large confirmed order you can't fill without paying your supplier first.

When it’s the wrong tool

  • You sell mostly to consumers. These tools depend on business or government customers who owe you on terms.
  • Invoices that are disputed, depend on future work, or are already pledged to another lender.
  • Thin margins. Fees taken from each invoice can eat most of the profit on a low-margin job. Run the math per invoice.

Ask before you sign

  • Is this a loan secured by my invoices, or a sale of them? Who owns the invoice after funding?
  • With recourse or without? If my customer doesn't pay, do I have to buy the invoice back?
  • How much of each invoice is advanced, how much is held in reserve, and when is the reserve released?
  • How is the fee figured, and does it grow the longer my customer takes to pay?
  • Will my customers be notified, and who will contact them about payment?
  • Is there a minimum volume, a long contract, or a fee to end the arrangement?

How each tool works

Three tools, compared in general terms[1,2]
AR financingFactoringPO financing
What it isA loan or line secured by invoicesA sale of invoices to a factorFunding to pay a supplier for a confirmed order
When it happensAfter you invoiceAfter you invoiceBefore you deliver
Who collectsUsually youOften the factorRepaid from the buyer's payment
Whose credit matters mostYours and your customers'Mostly your customers'Your buyer's, and your ability to deliver

Factors focus most of their review on your customers rather than on you, and often set a limit for each customer based on payment history and credit strength[1].

PO and invoice tools often work in sequence. Once the goods ship and you invoice, purchase order financing can switch over to receivables financing[2].

What ROK lists for this product

ROK describes accounts receivable financing as getting working capital by selling outstanding invoices or pledging them as collateral[3]. ROK's page lists its own minimums for this product: at least $100,000 in outstanding business-to-business receivables aged up to 90 days, and $500,000 or more in annual gross sales[3]. ROK's general application lists at least 4 months in business and $10,000 or more in monthly gross sales ($120,000 a year)[4]. ROK and its lenders review every request and make every funding decision. The Club does not.

ROK's receivables page does not describe purchase order financing. If your need is an order you haven't filled yet, say so in your application so ROK can tell you what fits. Lenders commonly review an aging report, the invoices and contracts behind them, a customer list and bank statements.

Reading the offer

Factoring is priced as a discount on the invoice, so the cost depends on how long your customer takes to pay. New York requires factoring offers to show the purchase price paid to you, the finance charge, which includes the discount, the total payment amount, an estimated yearly cost figure, fees you can avoid, and the receivables and collateral involved[5,6]. California lets factoring providers disclose an example transaction with the same core numbers[7].

For example

If a fee is charged for each 30 days an invoice is open, an invoice paid in 75 days costs more than one paid in 30. Ask for the cost at the payment timing your customer actually has, not the best case.

Industries where it comes up

ROK Financial lists this product on its own site. Read ROK’s page

Common questions

Is factoring a loan?

Not usually. In factoring, you sell the invoice and the factor collects it. Bank examiners describe it as a purchase of receivables at a discount, usually without recourse[1]. Accounts receivable financing is a loan secured by invoices you still own. Ask any provider which one its offer is, because that changes who collects and who carries the risk.

What if my customer pays late or doesn't pay?

That depends on recourse. Without recourse, the factor carries the credit loss on purchased invoices[1]. With recourse, you may have to buy the invoice back or replace it. Late payment can also raise your cost if fees build with time. Get the late and nonpayment terms in writing.

Can government contractors use receivables financing?

Yes, in general. Federal agencies are strong customers but pay on their own schedule, which is the gap these tools are built for. Lenders will want to see the contract, the invoices and how the agency pays. Ask how the provider handles federal receivables before you sign.

What will ROK want to see?

Expect to share an accounts receivable aging report, recent invoices, the contracts or purchase orders behind them, a customer list and bank statements. ROK's receivables page lists its own minimums for outstanding receivables and annual sales[3], so check those first. ROK and its lenders decide what they need.

Sources

  1. Comptroller's Handbook: Accounts Receivable and Inventory Financing Office of the Comptroller of the Currency, checked October 16, 2026
  2. Supply Chain Finance by Development Banks and Public Entities: Handbook World Bank Group, checked October 16, 2026
  3. Accounts Receivable Financing For Your Small Business ROK Financial, checked October 16, 2026
  4. Business Financing application (ROK Financial partner page) ROK Financial, checked October 16, 2026
  5. New York Financial Services Law Section 801: Definitions (Commercial Financing) New York State Senate, checked October 16, 2026
  6. New York Financial Services Law Section 806: Factoring transaction disclosure requirements New York State Senate, checked October 16, 2026
  7. California Financial Code, Division 9.5: Commercial Financing Disclosures California Legislative Information, checked October 16, 2026

Before you start

What ROK looks for.

Stated plainly so you don’t spend time on a form that isn’t built for your business yet. These are the minimums ROK lists on its partner application. Meeting them is the starting line, not a decision.

  • 4 monthsminimum time in business
  • $10,000minimum monthly gross sales
  • U.S.based and operating

Credit history is one input among several. ROK reviews the whole picture: revenue, deposits, time in business, and what the money is for. What to have ready.

Start your application

A referral club, free to apply. ROK Financial and its lenders review every request and make all funding decisions. How we’re compensated.

Prefer to go straight to the funder? You can apply on ROK's own site. It carries our referral ID.