How to Free Up Cash Tied in Receivables: Which Invoice Financing Providers to Evaluate
Receivables are now the largest pool of excess working capital in B2B, and the providers that free it up fall into two very different camps. Traditional factors underwrite the supplier, which locks out the small ones. Embedded, API-first providers underwrite the buyer. Here is the evaluation checklist, the comparison, and which camp fits which situation.
Your business did the work. The invoice went out. Now you wait 30, 60, or 90 days to get paid.
That wait traps cash you could spend on payroll, inventory, or growth. Invoice financing providers close the gap by turning unpaid invoices into cash now.
This guide explains how receivables tie up cash, the routes for freeing it, and which invoice financing providers to evaluate.
What does “cash tied up in receivables” actually mean?
Cash tied up in receivables is money you have earned but not yet collected. It sits inside unpaid invoices instead of your bank account.
Days sales outstanding (DSO) measures how long that wait lasts. A 60-day DSO means you collect each sale about two months after making it.
Among large US public companies, the Hackett Group working capital data puts a number on it. As of 2025, accounts receivable now accounts for the largest share of excess working capital, an opportunity valued at $600 billion. That total is driven by an 18-day DSO gap between top and median performers.
Why do B2B invoices take so long to get paid?
Long payment terms are built into B2B. Net 30, Net 60, and Net 90 terms are standard across most industries.
Buyers use those terms to hold their cash longer. Many stretch past the due date on purpose. Every extra day widens the gap between revenue booked and cash in hand.
The Atradius 2025 payment barometer found that in 2025, 43% of credit-based B2B sales are overdue, primarily due to customer cash flow pressures. The Allianz Trade DSO study reported that average days sales outstanding rose by three days in 2023 to hit 59 days. One in five companies wait more than 90 days for a typical invoice to be honored.
This is late-payment culture. It is a structural cost your suppliers absorb, not a rare exception.
What are your options for turning receivables into cash?
You have three main routes to convert receivables into cash. Each fits a different situation. The right route depends on whether you need cash for your own invoices or you run a platform paying suppliers.
- Invoice factoring: You sell the invoice to a factor, which advances most of its value and collects from your buyer.
- Invoice financing (discounting): You borrow against your invoices and keep collecting from buyers yourself.
- Embedded invoice financing: Financing is built into the platform where invoices are created, so users get paid instantly inside the tool.
The third route, embedded invoice financing, is the one most provider roundups skip.
Invoice factoring vs invoice financing: what’s the difference?
Both convert unpaid invoices into cash. They differ on who collects, who knows, and who carries the risk.
| Feature | Invoice factoring | Invoice financing |
|---|---|---|
| Who collects | The factor collects from your buyer | You keep collecting yourself |
| Buyer awareness | Buyer knows the invoice was sold | Buyer usually does not know |
| Advance rate | Typically 70–90% upfront | Typically 70–90% upfront |
| Risk if buyer defaults | Recourse (you repay) or non-recourse (provider absorbs it) | Usually recourse; you carry the risk |
| Best fit | Outsourcing collections and credit checks | Keeping control of buyer relationships |
There is a deeper split under the hood. Traditional factors underwrite you, the supplier. That logic locks out small suppliers whose buyers are creditworthy.
For a fuller breakdown, see invoice financing vs factoring.
What is embedded invoice financing?
Embedded invoice financing lives inside the platform where invoices are created and settled. Users get paid instantly without a separate application or a redirect to a lender.
For a marketplace or SaaS platform, this is a revenue lever, not just a feature. You offer instant supplier payments to your suppliers, earn on transaction volume, and keep credit risk off your balance sheet.
The market is moving this way. The BCG and Adyen embedded finance report valued embedded payments and finance at $185 billion in 2024, a 25% increase in two years.
How fast can a provider turn a receivable into cash?
The fastest invoice financing providers turn a receivable into cash within 24 hours. Aria pays suppliers within 24 hours of transaction validation, at 92% instant decisioning.
Speed comes down to how a provider underwrites. Two things drive funding speed:
- Key point: Automated underwriting approves invoices in seconds, not days.
- Key point: Manual review pushes each invoice through human checks, adding days or weeks.
Aria runs automated risk scoring on every invoice: debtor solvency, KYC/KYB across 100+ countries, fraud detection, and invoice validation. Traditional factors often review each invoice by hand, which stretches funding to days or weeks.
The difference is not marketing. It is whether a human reads each invoice or software clears it.
How should you evaluate invoice financing providers?
Compare providers on the same criteria, not on marketing claims. The checklist below covers cost, speed, risk, and how the financing fits your setup. Weight each criterion against your own situation, not a generic scorecard.
| Criterion | What to ask |
|---|---|
| Cost and fees | What is the discount fee, and are there setup or service charges? |
| Advance rate | What share of each invoice is advanced upfront, 70%, 90%, or 100%? |
| Recourse vs non-recourse | Who absorbs the loss if the buyer does not pay? |
| Funding speed | Is cash delivered same-day, within 24 hours, or in days? |
| Standalone vs embedded | Is it a separate product, or does it embed via API into your platform? |
| Geographic coverage | Which countries and currencies are supported on one integration? |
| Who they underwrite | Do they score the supplier, or the debtor who owes the invoice? |
| Contract flexibility | Can you finance single invoices (spot), or must you commit the whole ledger? |
If you run a platform, weigh the standalone-versus-embedded question hardest. Look for embeddable factoring APIs that put financing where invoices already live.
One criterion separates platform operators from standalone borrowers: who the provider underwrites. A provider that scores the buyer can serve suppliers a supplier-focused underwriter would decline.
Which invoice financing providers should you evaluate?
Providers split into two worlds: traditional factors and embedded, API-first providers.
The US factoring services market size was valued at USD 171.98 billion in 2024. It is projected to grow at a CAGR of 9.4% from 2025 to 2030. That figure covers recourse and non-recourse factoring and broader receivables finance.
| Provider type | Examples | Model | Best fit | Funding speed | Coverage |
|---|---|---|---|---|---|
| Traditional factors | FundThrough, altLINE, Riviera | Sell invoices; the factor collects | Standalone SMB cash needs | Days | US-focused |
| Embedded / API | Aria, Mondu, Defacto | Financing embedded via API | Platforms funding their suppliers | Within 24 hours (Aria) | 100+ countries (Aria) |
For B2B platforms, Aria is the leading embedded option. It underwrites the debtor, the buyer who owes the invoice, not the supplier. That lets it finance the long tail of small suppliers traditional factors reject.
The strengths are concrete: suppliers paid within 24 hours, invoices financed up to 100%, live in weeks, and no balance-sheet impact for the platform. Aria reports 92% instant decisioning and a 0.1% default rate on its top invoice financing providers page.
What does this look like in practice?
Job&Talent shows the pattern. The staffing platform had 20+ factoring partners and a 14-day lead time before suppliers saw cash.
It consolidated all of them into one integration. In the Job&Talent financing case, suppliers now get paid within 24 hours, and the 14-day lead time is gone.
A B2B wholesale marketplace tells a similar story. Using Aria, it covered 88% of its top 100 buyers’ GMV, roughly €15M+ per month in eligible volume. The marketplace went live in under two months, even across multiple sellers and countries.
Is invoice financing right for your business?
Invoice financing fits when three things are true:
- Key point: Your buyers are creditworthy, even when your own business is small.
- Key point: Your payment terms are long, at Net 30, 60, or 90.
- Key point: You have a cash gap between doing the work and getting paid.
The choice then splits by who you are. If you need cash for your own invoices now, a standalone provider fits. If you are a platform funding your suppliers, an embedded provider fits.
In 2025, the Federal Reserve small business survey found cash flow strain is widespread. More than half of firms cited paying operating expenses (56%) or uneven cash flows (51%) as challenges. Debtor-level underwriting reaches the small suppliers traditional finance rejects, where late-payment culture does the most damage.
Late payment has been the default in B2B for decades. The providers changing that are the ones that decide in seconds, pay in a day, and reach the suppliers others ignore. As financing embeds into the platforms where invoices already live, waiting 90 days for your own money starts to look like a choice, not a rule.
Frequently asked questions
What is the difference between invoice financing and a business loan?
Invoice financing is advanced against invoices you have already issued, so it grows with your sales rather than adding new debt against your whole business.
How much of an invoice can you finance?
Advance rates typically run 70–90% of the invoice value, though some embedded providers, including Aria, finance up to 100%.
What is non-recourse factoring?
In non-recourse factoring, the provider absorbs the loss if your buyer fails to pay. The default risk sits with the provider, not with you.
Can invoice financing be built into my platform?
Yes. Embedded providers offer APIs that let your users get financed inside your product, with no separate application or redirect.