How to Reduce Cash Tied Up in Accounts Receivable (2026)

TLDR

Cash tied up in accounts receivable is revenue your business has earned but cannot spend because customers have not paid yet. To free it up, calculate how many dollars each DSO day costs you, then fix preventable delays in invoicing, credit control, and collections. Automate payment reminders so nothing slips through the cracks. Build governance structures that sustain DSO improvements over time. When the timing gap is structural (creditworthy customers who simply pay slowly), select the right financing option based on invoice size, urgency, and relationship sensitivity. Receivables financing, factoring, or asset based lending can convert invoices into usable working capital.

What “Cash Tied Up in Accounts Receivable” Means

Cash tied up in accounts receivable is money your business has earned but has not collected. It appears as an asset on the balance sheet, but it cannot pay payroll, suppliers, taxes, rent, or debt until the customer pays or the receivable is financed.

Here is the practical reality. If a Canadian distributor has $1.2 million in accounts receivable and customers take 55 days on average to pay, that business is financing its customers for nearly two months. Every dollar sitting in AR is a dollar unavailable for operations, inventory, or growth.

This distinction matters more than most business owners realize. Export Development Canada makes the point directly: a profitable company can still fail if it does not have enough cash on hand to pay immediate bills. Profit is an accounting measure. Cash is what keeps the lights on.

If receivables are creating cash flow pressure, accounts receivable financing is one way to convert invoices into working capital without waiting for customer payment cycles.

Why This Problem Is Getting Worse for Canadian Businesses

The scale of cash trapped in AR is significant and trending in the wrong direction.

According to Atradius’ 2025 Payment Practices Barometer, 58% of Canadian B2B transactions were carried out on credit terms, and 44% of those credit sales were overdue. Average B2B payment terms in Canada sat at 45 days from invoicing, with late payments often taking twice as long to resolve. The top reasons for late payment were payment process delays (31%), customer liquidity issues (30%), invoice disputes (26%), and supply chain disruptions (20%).

Xero’s Q1 2026 Canadian small business report, based on data from 12,000 Canadian small businesses, found that invoices took an average of 29.8 days to be paid, up from 27.2 days in the prior quarter. Late payments averaged 11.6 days past the due date.

The consequences are operational, not just accounting. A QuickBooks survey found that 39% of small business owners said a single late payment made it hard to cover payroll or bills in the past year. The same report showed 55% of businesses on net 30 terms had overdue invoices, compared to only 26% of businesses on immediate payment terms. Payment terms themselves can structurally create AR cash drag.

Understanding how to reduce cash tied up in accounts receivable is the difference between a business that grows and one that stalls with a full order book. For a deeper look at how receivables fit into the broader working capital picture, see this working capital ratios guide.

How to Calculate Cash Tied Up in Accounts Receivable

Most pages about AR management tell you to “improve collections” without showing you the math. The math is where this gets concrete, and it is the step most competitors skip.

Days Sales Outstanding (DSO)

DSO measures the average number of days between making a credit sale and collecting the cash. The AFP formula is straightforward:

DSO = (Average Accounts Receivable ÷ Net Credit Sales) × 365

Many companies aim for DSO under 45 days, but the right target depends on industry and customer mix.

Cash Tied Up Per DSO Day

This formula converts days into dollars:

Cash tied up per DSO day = Annual credit sales ÷ 365

Cash Released by Lowering DSO

Cash released = Current AR − (Annual credit sales ÷ 365 × Target DSO)

Worked Example

A company with $10 million in annual credit sales:

Cash per DSO day: $10,000,000 ÷ 365 = $27,397
Reducing DSO by 15 days releases roughly $410,955 in working capital

Here is what that looks like at different revenue levels:

Annual Credit Sales	Cash Per DSO Day	Cash Released (10 Day Reduction)	Cash Released (20 Day Reduction)
$2,000,000	$5,479	$54,790	$109,580
$5,000,000	$13,699	$136,990	$273,980
$10,000,000	$27,397	$273,970	$547,940
$25,000,000	$68,493	$684,930	$1,369,860

For a fuller example, consider a business with $8 million in annual credit sales and $1.2 million in current AR:

Current implied DSO: $1,200,000 ÷ ($8,000,000 ÷ 365) = 54.75 days
Target DSO: 40 days
Target AR: $8,000,000 ÷ 365 × 40 = $876,712
Cash released: $1,200,000 − $876,712 = $323,288

That $323,000 is real money, available without borrowing, without selling equity, without cutting costs. You just have to collect it faster or finance it differently.

What Causes Cash to Build Up in Accounts Receivable

Before prescribing solutions, diagnose the problem. Cash gets trapped in AR for six main reasons, and each one calls for a different response.

1. Payment Terms Are Longer Than the Cost Cycle

If customers pay in 60 or 90 days but payroll, rent, and suppliers come due weekly or monthly, the business must finance the gap itself. BDC’s cash conversion cycle guidance explains this directly: accounts receivable, inventory, and accounts payable together determine how fast cash moves through the business.

2. Invoices Go Out Late

Every day between delivery and invoicing adds a day to the cash cycle. If the operations team finishes a job on Monday but the invoice goes out the following Friday, that is four days of free financing for the customer before their payment clock even starts.

3. Invoices Are Disputed or Incomplete

Atradius reported that invoice disputes were among the top four reasons Canadian customers paid late in 2025. Incorrect charges, missing PO numbers, and wrong billing addresses all give customers an excuse to delay payment.

4. Credit Is Extended to the Wrong Customers

Selling on open terms to customers who cannot or will not pay on time guarantees AR buildup. Receivables concentrated with one client, especially a distressed one, put the entire business at risk.

5. Collections Are Inconsistent

When nobody owns the follow up process, invoices age quietly until they become a crisis. Practitioners on LinkedIn consistently emphasize that the best AR teams do not wait until day 60 to “start collections.” They design the sale, terms, invoice, and follow up so cash collection is expected from the beginning.

6. The Business Is Growing Faster Than Its Working Capital

This one catches good operators off guard. National Bank notes that growing businesses often spend on hiring, equipment, and materials upfront while customers pay later. The faster revenue grows, the wider the cash gap gets.

Practitioners on Reddit describe this vividly. Small business threads repeatedly show owners buying materials, paying labour, and fulfilling orders while cash from prior sales is still weeks away. If every new sale increases AR faster than cash arrives, growth can make liquidity worse before it makes the business stronger.

For more on how AR finance addresses the growth cash gap specifically, read about powering growth with AR finance.

Operational Fixes: What to Do Before Considering Financing

Do not finance a broken AR process. Fix the invoices, terms, disputes, and credit limits first. Then use financing when the remaining gap is caused by strong customers paying on normal but slow terms.

Here are the highest impact operational fixes for reducing cash tied up in accounts receivable, roughly in order of effort and return.

Invoice Immediately

Invoice as soon as goods are delivered, services are completed, or a milestone is approved. Waiting a week to send an invoice adds a week to your cash cycle before the customer has even started their payment process. AFP recommends automated invoicing because manual processes create errors and inconsistencies that delay payment.

Put Payment Terms in Writing

Do not rely on a verbal understanding of “net 30.” State the due date, accepted payment methods, remittance instructions, late payment consequences, and dispute process in both the contract and the invoice. Ambiguity always works in the customer’s favour.

Eliminate Invoice Defects

A quick checklist for every invoice before it goes out:

Correct legal customer name and billing entity
PO number included
Proof of delivery attached
Tax treatment correct
Currency stated
Agreed discounts shown
Remittance address correct
Invoice submitted through the customer’s required portal

A discussion in the CFO subreddit about DSO reduction software included a telling observation: AR automation helps, but it will not fix poor credit terms, invoice errors, bad customer data, or disputes. Automate a broken process and you just send bad invoices faster.

Segment Customers by Payment Behaviour

Not every customer deserves the same terms. A practical segmentation:

Green: pays on time. Standard terms.
Yellow: pays late but communicates. Shorter terms, reminders, credit limit review.
Red: chronic late payer, disputes often, or represents concentration risk. Require deposits, milestone billing, or credit hold.

Set and Enforce Credit Limits

A customer who buys more is not automatically a better customer. If a buyer regularly stretches terms, limit new exposure until older invoices are paid. Review credit limits at least quarterly, or whenever a customer’s buying pattern changes significantly.

Require Deposits or Milestone Billing

This fix is especially useful for custom manufacturing, construction, consulting, new customers, and concentrated accounts. Practitioners on Reddit consistently point to deposits, milestone billing, and credit holds as practical solutions for chronic late payers, rather than simply “chasing harder.”

Offer More Payment Options

EFT, wire, credit card for smaller balances, pre authorized payment for recurring work, and customer portal payment links all reduce friction. The harder you make it to pay, the longer payment takes.

Reddit small business owners often frame card on file as both a payment convenience and a customer filter. The customers who resist it are sometimes the ones most likely to become slow payment problems.

Offer Early Payment Discounts Only If the Math Works

A 2% discount for payment in 10 days instead of 60 can be worthwhile if the alternative is borrowing at higher cost. But it is expensive if offered to customers who would have paid on time anyway. Run the numbers before committing. For the other side of this equation, see how early payment programs work from the buyer’s perspective.

How to Automate Payment Reminders (and Why Manual Follow Up Fails)

Sending reminders before and after due dates is one of the highest return activities in AR management. But doing it manually almost guarantees inconsistency. Someone gets busy, a reminder slips, and a $50,000 invoice quietly ages from 30 to 60 days without anyone noticing.

Automated payment reminders solve this by removing human forgetfulness from the equation. Most modern accounting platforms (QuickBooks, Xero, FreshBooks, Sage) have built in reminder sequences. ERP systems like NetSuite and Dynamics 365 offer more granular control. The key is not which tool you use but that reminders actually go out on a consistent, predefined schedule.

A Recommended Automated Reminder Cadence

7 days before due date: Friendly heads up with invoice attached. This catches customers who batch AP runs weekly.
Due date: Confirmation request. “This invoice is due today. Please confirm payment has been scheduled.”
3 to 5 days overdue: Polite follow up to the AP contact. Reattach the invoice. Ask if anything is preventing payment.
10 to 15 days overdue: Escalate. Loop in the account manager or sales rep. The tone shifts from reminder to inquiry.
30 days overdue: Credit hold trigger. Senior escalation. Phone call, not just email.
60 days overdue: Payment plan discussion or outside collections review.
90+ days overdue: Treat as high risk. Do not assume it is financeable.

What Makes Automation Work

The reminder sequence itself is table stakes. What separates effective automation from noise:

Personalization matters. Generic “your invoice is overdue” emails get ignored. Including the invoice number, amount, due date, and the customer’s AP contact name increases response rates significantly.

Channel escalation. Start with email. Move to phone. Practitioners on Reddit note that many AP departments prioritize whoever calls, not whoever emails. Automated email gets attention early, but human follow up closes the loop.

Dispute flagging. If a customer replies to an automated reminder with a dispute, the system needs to route that to a dispute owner immediately, not leave it sitting in a shared inbox. Unresolved disputes are the number one reason automated reminders produce activity without producing cash.

Integration with your aging report. The reminder system should update your AR aging in real time. If the finance team is reviewing a report that does not reflect last week’s payments or disputes, they are making decisions on stale data.

A controller on the CFO subreddit put it well: the goal is not to send more emails. The goal is to make it harder for an invoice to age past 30 days without someone knowing exactly why.

For businesses that need cash sooner than even optimized collections can deliver, bridging the gap between invoicing and payment through financing is the next step.

When Financing Makes Sense

Sometimes slow payment is not a process failure. It is a structural feature of the business model. Manufacturers, distributors, exporters, construction firms, and B2B service providers often sell to large buyers who pay in 45, 60, or 90 days because that is how their AP departments work. No amount of invoicing improvement will change a Fortune 500 company’s payment cycle.

The key principle: finance good receivables that pay slowly, not bad receivables that may not pay at all.

If invoices are disputed, unsupported, concentrated in weak customers, or already 90+ days overdue, financing will be expensive or unavailable. BDC notes that receivables beyond 90 days are often excluded from borrowing base calculations because collection probability drops significantly.

Matching the Problem to the Right Financing Structure

Situation	Likely Fit	Why
Creditworthy B2B customers pay in 45 to 90 days	AR financing or factoring	Converts invoices into earlier working capital
Business wants to keep customer collection control	Invoice discounting or AR line	Borrow against receivables without handing over collections
Bank line is capped but receivables and inventory are strong	Asset based lending	Borrowing base grows with eligible assets
Large buyer wants long terms but supplier needs early cash	Supply chain finance	Buyer’s credit profile supports earlier supplier payment
Invoice is disputed or 90+ days old	Process fix, collections, or legal	Usually weak collateral for financing
Growth is consuming cash faster than revenue arrives	Factoring, ABL, or line of credit	Bridges the gap between production costs and customer payments

Bank Operating Line of Credit

Best when receivables are generally collectible, the company can meet bank reporting and covenant requirements, and the business wants flexible short term borrowing. The borrowing base typically includes eligible AR plus eligible inventory minus senior debt.

Compare factoring vs. bank lines to see which structure fits your situation.

Accounts Receivable Financing and Invoice Discounting

Best when the business wants to borrow against invoices but retain customer collection control. Allianz Trade defines invoice financing as short term borrowing against issued invoices, distinguishing it from factoring where receivables are sold outright. For a deeper explanation of how discounting works mechanically, see this invoice discounting guide.

Factoring

Best when the business wants immediate cash against invoices and is willing to have a third party involved in collections. Factoring can work well for companies with limited access to conventional bank credit or those growing faster than their working capital allows.

Traditional factoring notifies customers to pay the factor, while confidential factoring keeps the arrangement private. This distinction matters for customer relationships. For a deeper look at recourse structures, see this recourse factoring guide.

Asset Based Lending

Best when the business has meaningful AR, inventory, or equipment collateral and needs more flexibility than a conventional bank line. ABL facilities grow with the asset base, making them a natural fit for seasonal businesses or companies with large working capital swings. Learn more about who qualifies for ABL in Canada.

Supply Chain Finance

Best when a large buyer wants longer payment terms but the supplier needs earlier cash. In these programs, buyers extend their payables while suppliers receive early payment at rates based on the buyer’s stronger credit profile.

How to Select an AR Financing Option by Invoice Size, Urgency, and Relationship Sensitivity

Not all AR financing products are interchangeable. The right choice depends on three practical variables that rarely get discussed together: how large the invoices are, how urgently cash is needed, and how sensitive the customer relationship is to third party involvement.

Invoice Size Shapes Your Options

Small invoices (under $5,000 individually) are expensive to finance one at a time. Factoring companies charge per invoice, so processing costs on small tickets eat into the advance. For portfolios of many small invoices, a revolving AR line or invoice discounting facility is more cost effective because the lender works off the entire receivable pool rather than individual invoices.

Larger invoices ($25,000+) from creditworthy buyers are the sweet spot for selective factoring, where you choose specific invoices to fund. The economics work because the fee is a small percentage of a meaningful dollar amount, and the lender can verify the receivable efficiently.

Businesses with a mix of invoice sizes often benefit from a blended approach: an AR line for the base portfolio and selective factoring for large, slow paying invoices that create outsized cash drag.

Urgency Determines the Structure

If cash is needed within 24 to 48 hours, factoring is usually the fastest path. Established factoring relationships can fund same day once the facility is in place. A new facility takes one to three weeks to set up, but subsequent draws happen quickly.

A bank operating line of credit or ABL facility takes longer to establish (often four to eight weeks), but once in place, draws are routine. These are better for ongoing, predictable working capital needs rather than emergency cash.

Supply chain finance programs take the longest to implement because they require buyer participation and platform onboarding. They are not crisis tools. They are strategic, long term structures.

Relationship Sensitivity Matters More Than People Admit

Practitioners on Reddit and LinkedIn frequently raise this concern: “Will my customer think I’m in financial trouble if they find out I’m factoring?” It is a valid worry, especially with key accounts.

Confidential invoice discounting keeps the arrangement invisible to customers. The business continues to collect payments in its own name. This is the right fit when the customer relationship is high value and the business does not want to signal anything about its financial position.

Notification factoring requires the customer to redirect payment to the factor. Some large buyers are completely comfortable with this (they deal with factors regularly). Others interpret it negatively. Know your customer before choosing this route.

Supply chain finance actually strengthens the buyer relationship because the buyer initiates the program. There is no stigma because the buyer is explicitly supporting its supply chain.

Quick Selection Framework

Your Situation	Best Starting Point
Many small invoices, ongoing cash need	Revolving AR line or invoice discounting
A few large invoices from strong buyers, need cash fast	Selective factoring
Relationship sensitive accounts, want privacy	Confidential invoice discounting
Buyer initiated program, long term partnership	Supply chain finance
Mixed collateral (AR + inventory + equipment)	Asset based lending
Bank declined or capped your existing line	Factoring or ABL as alternatives to bank loans

The wrong financing product does not just cost more. It can damage customer relationships, lock you into contracts that do not fit your cash cycle, or leave you financing the wrong invoices. Spending time on selection upfront saves money and headaches.

Explore working capital options tailored to your business through McMillan Capital Partners.

Questions to Ask Before Using Factoring or AR Finance

Practitioners on Reddit warn that the headline rate is not the whole story. In small business discussions about invoice financing, commenters flagged hidden fees, monthly minimums, contracts that force funding of more invoices than needed, and slow release of reserves after customer payment.

Before signing anything, ask:

Is the facility recourse or non recourse?
What advance rate applies, and what reserve is held back?
Are there setup, due diligence, minimum volume, wire, lockbox, or termination fees?
Can you choose specific invoices, or must you factor all receivables?
Are customers notified? Who handles collections?
How are disputes handled if a customer contests an invoice?
How quickly are funds advanced after invoice submission?
Are U.S. dollar or foreign currency invoices eligible?
What receivables are excluded (aged, intercompany, concentrated)?
How quickly are reserves released after customer payment?

These questions separate a facility that helps the business from one that creates new problems. For guidance on comparing lender structures and negotiating terms, see how brokers negotiate with specialty lenders.

Aligning Sales, Finance, and Operations

Reducing cash tied up in accounts receivable is not solely a finance team problem. It requires coordination across the business.

Sales owns payment terms at the deal stage. If the sales team negotiates 90 day terms to win a contract but finance needs cash in 30 days, the conflict is baked in before the first invoice ships.

Finance owns credit policy. Setting credit limits, running credit checks, and monitoring aging reports are finance functions that should not be overridden without a clear commercial rationale.

Operations owns proof of delivery and dispute prevention. Clean documentation at the point of delivery prevents billing disputes weeks later.

Collections should not be left to clean up every commercial concession made upstream.

A discussion in the CFO subreddit about reducing DSO without damaging relationships emphasized that chronic late payers require commercial choices: price for the delay, shorten terms, require deposits, reduce credit limits, or stop extending exposure until the customer catches up. These are decisions that need sales and finance working together, not finger pointing after the fact.

How to Sustain DSO Improvements and Build AR Governance

Getting DSO down is hard enough. Keeping it down is where most businesses fail. A company runs a collections blitz, clears the aging backlog, celebrates, then watches DSO creep back up over the next two quarters because nothing structural changed.

Sustained improvement requires governance, not just effort.

Monthly AR Reviews with Teeth

A monthly AR review is not a quick glance at the aging report. It is a structured meeting where finance, sales, and operations sit together and answer specific questions:

Which accounts moved from current to 30+ days? Why?
Are there recurring dispute categories that operations or sales need to fix upstream?
Did any customer exceed their credit limit without approval?
What is the concentration risk in the top five accounts?

The answers drive action items with owners and deadlines. Without that structure, the meeting is just reporting. Reporting does not change behaviour.

DSO Targets as a Shared KPI

DSO should not live exclusively in the finance department. When sales teams are partly measured on collection outcomes (not just bookings), they negotiate better terms and qualify customers more carefully. This does not mean penalizing salespeople for things outside their control. It means aligning incentives so that a deal closed on 90 day terms to a shaky customer is not treated the same as a deal closed on 30 day terms to a strong one.

Practitioners on LinkedIn note that companies with the best DSO performance almost always have some form of shared accountability between sales and finance. The specific metric varies (DSO contribution by territory, weighted average terms by rep, or even a simple “terms exception” approval process), but the principle is consistent: everyone who touches the deal is responsible for collectability.

Quarterly Credit Limit Reviews

Customer financial health changes. A buyer that was strong 18 months ago may be stretching payments across all its suppliers now. Quarterly credit reviews catch deterioration before it shows up as a bad debt write off. Pull a fresh credit report, compare it against actual payment performance, and adjust limits accordingly.

Dispute Root Cause Tracking

Track every dispute by reason code (pricing error, short shipment, quality issue, missing PO, incorrect tax). Review the data quarterly. If 40% of disputes are caused by missing PO numbers, that is an invoicing process problem, not a collections problem. Fix the root cause and the aging improves automatically.

Policy Documentation

Write down your credit policy, escalation procedures, and dispute resolution SLAs. Make them accessible to everyone involved. Unwritten policies get interpreted differently by every person, which means they are not policies at all.

The businesses that sustain DSO improvements treat AR governance the same way they treat quality control or safety. It is a system, not a project.

Your 30 Day AR Cash Release Plan

Days 1 to 3: Measure

Pull your AR aging report
Calculate DSO and cash tied up per DSO day
Identify your top 10 overdue accounts by dollar value
Flag all invoices over 60 and 90 days

Days 4 to 10: Clean

Fix missing PO numbers, incorrect contact emails, tax errors, and open disputes
Confirm customer AP contacts are current
Reissue any defective invoices
Update your aging schedule to reflect corrected data

Days 11 to 20: Tighten

Implement automated reminder sequences before and after due dates
Move high risk customers to shorter terms, deposits, or milestone billing
Place credit holds on chronic late payers
Align sales and finance on exceptions and overrides
Set up monthly AR governance reviews

Days 21 to 30: Finance the Structural Gap

If customers are creditworthy but slow, compare line of credit, ABL, AR financing, and factoring using the invoice size, urgency, and relationship framework above
Prepare lender materials: AR aging, customer list, concentration report, sample invoices, proof of delivery, financial statements, bank statements, and tax status

For a complete checklist of what lenders typically expect, see the business loan documents checklist for Canada.

Getting Help with the Structural Gap

If your customers are creditworthy but your cash arrives too late, the right structure may be a line of credit, receivables financing, factoring, asset based lending, or a combination of facilities. McMillan Capital Partners is a Canadian commercial finance intermediary that helps businesses compare lender options and structure working capital facilities around the actual cash conversion cycle.

Start a conversation with McMillan Capital Partners to explore what fits your business.

Frequently Asked Questions

What does it mean when cash is tied up in accounts receivable?

It means customers owe you money for goods or services already delivered, but that money is not yet in your bank account. The receivable is an asset on paper, but you cannot use it to pay bills until the customer pays or you finance the invoice.

How do I calculate cash tied up in AR?

Start with your AR balance and DSO. Use the formula: cash tied up per DSO day equals annual credit sales divided by 365. Multiply by the number of DSO days you want to reduce to see how much working capital you could release.

What is a good DSO?

It depends on your industry and customer mix. Many companies aim for under 45 days, but the right target varies. A manufacturer selling to government buyers will have a very different baseline than a SaaS company billing monthly. The goal is not to hit a universal number but to be better than your own recent history and your industry average.

Is factoring the same as accounts receivable financing?

No. Invoice financing typically means borrowing against invoices while keeping collection control. Factoring usually means selling invoices to a third party, often with that party handling collections from the customer. The cost, risk, and customer impact differ between the two structures.

Should I fix collections or use financing to reduce AR?

Use collections and process fixes for preventable delays (late invoicing, disputes, weak credit decisions). Use financing when the receivables are valid, collectible, and slow because of normal customer payment terms. The best approach often combines both.

Can old invoices be financed?

Sometimes, but older invoices are less attractive to lenders. Receivables outstanding 90 days or more are often excluded from borrowing base calculations because the probability of collection drops. Clean up aged receivables through direct collections before approaching a lender.

What documents do lenders need for AR financing?

Expect to provide AR aging, customer concentration details, invoice samples, proof of delivery, financial statements, bank statements, tax status, and collection history. Lenders want to see that the receivables are real, collectible, and properly supported.

What is the fastest way to reduce cash tied up in accounts receivable?

The fastest operational fixes are same day invoicing, correcting invoice errors, automated payment reminders before due dates, resolving disputes quickly, and tightening terms for chronic late payers. For structural timing gaps where customers are creditworthy but slow, AR financing or factoring can convert invoices into cash within days.

How do I keep DSO from creeping back up after improving it?

Build governance around AR. Run monthly cross functional reviews, track dispute root causes, review credit limits quarterly, and make DSO a shared KPI across sales and finance. Without structural accountability, improvements from a one time collections push tend to fade within two to three quarters.

How do I choose between factoring, invoice discounting, and a bank line?

Match the product to your invoice profile, cash urgency, and relationship sensitivity. Factoring works best for fast cash on large invoices from strong buyers. Invoice discounting keeps the arrangement confidential. Bank lines are cheapest for established businesses that meet covenant requirements. A commercial finance broker can help compare all three.