Your business has delivered the goods, completed the contract or provided the service, but the customer will not pay for another 60, 90 or 120 days. The invoice may be valid and the sale may be profitable, yet the cash needed to continue operating is still tied up in receivables.
That gap can become particularly difficult when your business needs to pay suppliers, employees, transport costs and production expenses before the customer settles the invoice.
Receivables financing can provide a potential way to address this timing problem by using eligible outstanding receivables as part of a financing structure. Chiron Projects BV helps businesses assess whether their receivables and wider funding requirements may support an appropriate financing solution.
If your company has significant invoices outstanding and needs funding before customers pay, contact Chiron Projects BV with the amount required, payment terms and details of the underlying transactions so your specific financing requirement can be assessed.
Why Long Payment Terms Create a Financing Problem
A 60- to 120-day payment term may appear manageable when viewed against one invoice. The problem becomes more significant when a business has several deliveries or projects running simultaneously.
Consider a company that supplies €1 million of equipment and invoices its customer after delivery. The customer has 120 days to pay.
The business has technically generated the sale, but it may still need to fund:
- Materials for the next order
- Supplier payments
- Wages and contractors
- Freight and logistics
- Insurance and operating costs
- Production for new customers
- Additional contractual commitments
If several invoices are outstanding at the same time, the amount of capital tied up can become substantial.
This is why a business can experience cash-flow pressure even when sales are increasing.
The issue is not necessarily a lack of customers or revenue. It is the timing between completing the sale and receiving the cash.
What Is Receivables Financing?
Receivables financing is a form of business financing connected to amounts owed to a company by its customers.
Rather than waiting until every customer reaches the contractual payment date, an eligible business may be able to obtain financing against qualifying receivables.
The exact structure depends on the circumstances.
A financing assessment may consider:
- The value of the outstanding receivables
- Who owes the money
- The customer’s payment obligations
- Whether delivery or performance has been completed
- Whether invoices have been accepted
- The agreed payment period
- Whether invoices are disputed
- The jurisdictions involved
- The contractual rights relating to the receivables
- The amount of funding required
This makes Accounts Receivable Financing a potentially useful solution for businesses whose working capital is heavily affected by customer payment cycles.
It is important, however, not to assume that every invoice can automatically be financed. The underlying transaction and receivable need to support the proposed structure.
What Happens When Customers Pay in 60 Days?
A 60-day payment term can create a meaningful financing requirement when the cost of fulfilling an order is incurred well before payment.
For example, a manufacturer may have to purchase materials, manufacture the goods and arrange delivery before issuing an invoice. If the customer then has another 60 days to pay, the manufacturer has already committed capital for considerably longer than the stated payment term suggests.
For a business with regular sales, this cycle repeats.
One invoice may be paid just as another large order is being produced. Without sufficient working capital, the company can find itself constantly waiting for previous sales to generate the cash required for future sales.
A financing facility linked to eligible receivables may help bridge that timing gap.
What Changes With 90-Day Payment Terms?
At 90 days, the working-capital impact becomes more pronounced.
A business with €3 million of eligible receivables and customers paying after 90 days may have a substantial amount of capital unavailable for other purposes at any given time.
This can affect decisions about:
- Accepting new orders
- Increasing production
- Purchasing inventory
- Paying suppliers
- Entering new markets
- Taking on larger contracts
For a growing business, the problem can become larger as sales increase.
That may seem counterintuitive, but rapid growth can consume working capital because every new order may require expenditure before the associated receivable becomes cash.
Working Capital Financing can therefore become relevant when the business needs more than financing against a single outstanding invoice and requires liquidity to support continuing operations.
What About 120-Day Customer Payment Terms?
Four months between delivery and payment creates a considerably longer financing period.
This is common in certain commercial arrangements where customers negotiate extended payment terms. A supplier may accept those terms to secure a substantial contract, enter a new market or maintain a valuable customer relationship.
The commercial decision can make sense while still creating a funding problem.
The business has to decide whether it can comfortably carry the receivable for 120 days.
If it cannot, receivables financing may be worth exploring.
Long payment terms do not automatically make a receivable unsuitable for financing. However, the longer period can make the details of the transaction more important, including the customer’s payment obligation, invoice status, contractual terms and overall financing structure.
Chiron Projects BV can assess these factors as part of a wider financing discussion rather than assuming that a particular payment period automatically qualifies or disqualifies a business.
Which Receivables Are More Suitable for Financing?
The quality of the underlying receivable matters.
A completed and undisputed transaction with a clearly documented payment obligation may present a more straightforward financing proposition than an invoice connected to unfinished work or a disputed contract.
Businesses seeking financing should be prepared to distinguish between:
Approved receivables: invoices that have been accepted and are payable under agreed terms.
Pending receivables: invoices issued but still awaiting confirmation, approval or completion of contractual conditions.
Disputed receivables: amounts where the customer challenges the invoice, delivery, quality or contractual obligation.
Overdue receivables: amounts that have passed their agreed payment date.
This distinction is important because the financing characteristics can be different in each case.
A company should therefore avoid presenting its entire accounts receivable ledger as though every invoice carries the same financing value.
Receivables Financing vs Invoice Financing
The terms are sometimes used interchangeably, but businesses should focus on the structure rather than the label.
Invoice Financing can refer to arrangements where funding is provided against specific eligible invoices.
Receivables financing can be broader, potentially considering a portfolio or pool of amounts owed to the business.
The appropriate structure depends on the company’s transaction profile and funding requirement.
If the business has one substantial completed contract and needs funding against the resulting receivable, a transaction-specific approach may be relevant.
If it regularly generates large volumes of eligible receivables, a broader facility may warrant consideration.
The objective should be to find a financing structure that matches the company’s actual cash-flow cycle.
What If You Need More Than Receivables Financing?
Not every financing requirement begins after delivery.
A company may need funding before production, during manufacturing, at shipment and after invoicing.
For example, an exporter may need capital to purchase goods or manufacture an order before delivery. Once the customer has accepted the goods and the invoice has been issued, the financing requirement may shift toward the receivable.
In such circumstances, Trade Finance can be relevant to the earlier stages of the transaction, while receivables financing may address the later payment period.
A business with a larger or more complex requirement may instead need Structured Business Financing, particularly where several contracts, assets, receivables or operating requirements need to be considered together.
Chiron Projects BV can review the wider transaction to determine whether the funding requirement is limited to outstanding receivables or extends across multiple stages of the business cycle.
How Much Funding Does Your Business Actually Need?
One of the most important questions is not simply how much the company has in unpaid invoices.
It is how much funding the company actually needs.
Suppose a business has €5 million of receivables but only requires €500,000 to cover supplier payments and fulfil the next contract. Financing the entire receivables balance may not be necessary.
Conversely, a company with €2 million of outstanding invoices may require substantial working capital because it is simultaneously funding several large projects.
Before seeking financing, calculate:
- Total outstanding receivables
- Receivables due within 30, 60, 90 and 120 days
- Current overdue amounts
- Immediate operating requirements
- New orders that need funding
- Supplier commitments
- The amount of financing actually required
This gives a financing provider a much clearer picture of the business requirement.
What Information Should You Give Chiron Projects BV?
A useful initial assessment starts with the facts of the transaction.
Chiron Projects BV may need information about:
- Your business and industry
- The amount of financing required
- The total value of outstanding receivables
- Typical customer payment terms
- The customers responsible for the receivables
- Whether the goods or services have been delivered
- Whether invoices have been approved
- Whether any invoices are disputed
- Countries involved in the transactions
- Existing contractual commitments
- The intended use of the financing
Supporting documentation may then be requested to examine the receivables and the underlying commercial arrangements.
The purpose of this process is to determine whether the receivables can form part of a viable financing structure and whether additional funding requirements should be considered.
When Receivables Financing May Not Solve the Whole Problem
Receivables financing can address a cash-flow gap, but it should not be treated as the answer to every financial difficulty.
If customers are paying late because of persistent disputes, financing may not resolve the underlying commercial problem.
Likewise, if the business has insufficient margins, uncontrolled costs or contracts that consistently require more cash than they generate, additional financing alone may not solve the fundamental issue.
The strongest financing proposition is generally one where there is a clear underlying commercial transaction and a defined source of repayment.
For that reason, Chiron Projects BV looks at the financing requirement in context rather than focusing only on the invoice value.
A Practical Example
Imagine a company completes a €4 million commercial order and invoices the customer after delivery.
Payment is due in 90 days.
The company immediately needs €1 million to begin manufacturing its next order, while another €700,000 is required for supplier and operating commitments.
The business therefore has a genuine financing requirement even though €4 million is owed to it.
A suitable financing structure could potentially allow the business to access funding connected to eligible receivables while waiting for the customer to pay.
The important assessment is not simply whether the €4 million invoice exists.
It is whether the transaction, receivable, customer obligation, documentation and requested funding structure collectively support financing.
That is the type of situation a business owner should discuss with Chiron Projects BV.
FAQs About Receivables Financing
1. Can a business finance invoices with 60 to 120-day payment terms?
Potentially. The payment period is one factor in the assessment. The underlying transaction, customer obligation, invoice status, documentation, jurisdiction and requested financing amount can also affect whether a receivable is suitable.
2. Can receivables financing be used before the customer pays?
Potentially. The purpose is generally to provide access to funding against qualifying receivables before the contractual customer payment is received. The exact financing structure and conditions depend on the transaction.
3. Can international receivables be considered?
Potentially. International transactions can involve additional considerations relating to contracts, jurisdictions, payment arrangements and documentation. These factors should be reviewed as part of the financing assessment.
4. Are receivables financing suitable for a growing business?
It can be, particularly where sales are increasing but customers have extended payment terms. Growth can increase the amount of working capital tied up in receivables, making liquidity planning increasingly important.
5. What does Chiron Projects BV need to assess my financing requirement?
A useful starting point is the required funding amount, total receivables, customer payment terms, nature of the underlying transactions, countries involved and the status of the invoices. Additional documentation may be requested during the assessment.
Turn Your Receivables into a Financing Discussion
When customers pay 60, 90 or 120 days after delivery, the central issue is not necessarily whether the business has made a sale. It is whether the company has enough liquidity to operate successfully while waiting for that sale to become cash.
For businesses with substantial eligible receivables, financing may provide a way to bridge that timing gap. For others, a wider working-capital, trade or structured financing solution may be more appropriate.
The right starting point is a clear assessment of what is owed, when it will be paid and how much capital the business needs in the meantime.
If your company’s cash is tied up in receivables and you need funding before customers pay, contact Chiron Projects BV with your receivables profile and financing requirement. Chiron Projects BV can assess the transaction and determine what financing options may be appropriate for your business.
Written by Chiron Projects B.V.
Chiron Projects B.V. provides tailored financial solutions in Bank Guarantees, Standby Letters of Credit and monetization services. We support businesses, investors, and organizations worldwide with structured solutions for project financing, liquidity enhancement, international trade and business growth.
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