Turn Outstanding Invoices Into Working Capital Fast

Accounts receivable financing shifts the underwriting focus from your business's overall credit profile to the creditworthiness of the customers who owe you money. When you submit an invoice for financing, we verify that the underlying work or delivery was completed and evaluate the paying customer's payment history and financial strength, since they are the party ultimately responsible for repayment. This structure allows businesses with thinner credit files or shorter operating histories to access capital, provided their customers are established, creditworthy companies or government entities with reliable payment cycles.

There are two common structures: invoice factoring, where you sell the invoice outright and the funder collects directly from your customer, and accounts receivable financing, where the invoice serves as collateral for an advance while you retain collection responsibility and customer relationship control. Valhalla structures most facilities as financing rather than factoring specifically to preserve the client-facing relationship, since many businesses do not want a funder contacting their customers directly. The trade-off is that financing structures sometimes carry a slightly higher cost than factoring because the funder takes on more collection risk.

Pricing is typically expressed as a discount fee, often 1% to 4% of invoice face value for the first 30 days, with additional increments if the customer pays later than expected. On a $50,000 invoice advanced at 85% upfront with a 2% monthly discount fee, you receive $42,500 immediately, and once your customer pays the full $50,000, you receive the remaining $7,500 minus the $1,000 fee, netting $49,000 total against a 30-day wait you would have otherwise absorbed unpaid. The math changes meaningfully if your customer pays late, since fees typically accrue per 10- or 30-day increment beyond the initial term.

The core trade-off is the discount fee against the opportunity cost of leaving cash tied up in unpaid invoices for 30, 60, or 90 days. For a business that can redeploy that cash into fulfilling new orders, covering payroll, or taking early-payment discounts from its own suppliers, the fee is often worth less than the return on immediately available capital. For a business with ample cash reserves and no urgent use for the funds, waiting for the customer's natural payment cycle avoids the fee entirely and is the lower-cost path.

• Discount fees typically 1%-4% per 30-day period
• Advance rate and fee driven by customer creditworthiness, not yours
• Compare fee cost against opportunity cost of tied-up cash

This financing works best for B2B or B2G businesses with invoice payment terms of 30 to 90 days, creditworthy commercial or government customers, and a genuine need to convert receivables into cash faster than the natural payment cycle allows. It is commonly used by staffing agencies, wholesalers, government contractors, and manufacturers who extend trade credit as a condition of doing business but still need cash flow to cover payroll or materials in the interim. It is a poor fit for businesses that bill consumers directly, since consumer receivables carry different risk characteristics and are not typically financeable under this structure.

Before applying, gather your accounts receivable aging report and a sample of invoices you would like to finance, along with basic information about your top paying customers. If your customers are slow-paying but ultimately reliable, this structure can smooth your cash flow meaningfully; if your receivables are concentrated in a small number of already-strained customers, we will flag that concentration risk during underwriting rather than approve a facility that depends on a single shaky payer.