AFO · Head-to-head
Both finance against receivables, but with fundamentally different economics. An ABL revolver is a loan secured by the AR — you keep the customer relationship and only pay interest on the drawn balance. Factoring is a true sale of receivables — the factor pays you upfront and collects from your customer. The right choice depends on customer concentration, margin profile, and who you want answering the collection call.
Side by side
The matrix below pulls directly from the catalog. Each row shows the same data point across both programs so you can spot the differences at a glance.
| Attribute | ABL Revolver (Asset-Based Lending) | Invoice Factoring & AR Finance |
|---|---|---|
| Capital type | Asset-based debt | Asset-based debt |
| Family | Debt | Debt |
| Size range | $1,000,000 — Scales with assets | $50,000 — Scales with assets |
| Typical cost | Prime + 2–5%. 85% advance on eligible AR, 50–65% on finished-goods inventory. | 1–4% per invoice depending on customer credit and invoice age. Recourse vs non-recourse pricing varies. |
| Speed to close | Weeks to a few months | Days to weeks |
| Eligibility | Working-capital-intensive business (distributors, manufacturers, staffing). Quality of AR + inventory matters more than profitability. | B2B business with creditworthy customers, $50K+/month in eligible AR, and a collection cycle long enough to feel the cash gap (staffing, transportation, manufacturing, distribution). |
| Use of proceeds | Working capital, Refinancing | Working capital |
| Status | Coming soon | Live — self-serve |
Choosing between them
Each side describes the scenarios where the program is the stronger fit. Most real-world deals end up in the “in common” section below — neither/nor.
When to choose
Pick the ABL revolver when you have a diversified customer base, healthy gross margins (the 1–4% factor discount eats more margin than ABL interest does), and you want to keep collections in-house. The revolver scales with AR and only accrues interest on drawn capital, so the all-in cost is usually lower than factoring on an annualised basis.
When to choose
Pick factoring when the customer base is concentrated, the margin can absorb the discount, the business can't qualify for an ABL revolver (often because the AR aging or the customer mix doesn't fit a bank's eligibility), or you need cash within days rather than weeks. Factoring closes fast and the factor takes on the credit-risk + collection workload.
The CPA can look at your specific situation and tell you in one twenty-minute call which program (or stack) is the right structure — and what providers will want to see before the first conversation.