Invoice Financing at Cathay Bank

Cathay Bank's Invoice Financing solution is designed to help small and mid-sized businesses convert outstanding customer invoices into immediate working capital. Rather than waiting 30, 60 or 90 days for payment, companies can unlock cash tied up in receivables to fund operations, meet payroll, purchase inventory or pursue growth opportunities. This product blends speed, flexibility and tailored structuring to accommodate a variety of industries and receivable profiles.

Key Benefits

• Improved cash flow: Access a percentage of outstanding invoice value to maintain liquidity and smooth cyclical revenue fluctuations.
• Faster growth: Reinvest receivable proceeds into sales, marketing, inventory and capital expenditures without diluting equity.
• Flexible use of funds: Use financing proceeds for working capital, supplier payments, payroll or one-off expenditures.
• Reduced collection burden: Optional collections support can ease administrative workload and accelerate receivable conversion.
• Customizable arrangements: Choose recourse or non-recourse options, and structure limits to match billing cycles and customer concentration.

Product Features

• Advance rates: Typically a percentage of invoice face value advances are available up front; advance rates vary by creditworthiness and industry risk.
• Flexible limits: Credit lines sized to receivable portfolios, with periodic reviews and adjustments as business needs evolve.
• Pricing: Transparent fee structures combining discount rates, service fees and any facility fees based on volume and risk.
• Integration: Seamless onboarding and electronic uploading of invoices, with reporting tools to monitor availability and activity.
• Optional credit protection: Non-recourse options or credit insurance can be integrated to mitigate debtor default risk where available.

How Invoice Financing Works — Step by Step

1. Apply: Submit a financing application along with basic company financials and accounts receivable aging details.
2. Set up facility: Cathay Bank assesses receivables, determines advance rate and establishes a committed facility limit.
3. Upload invoices: Deliver or electronically upload eligible invoices for funding consideration.
4. Receive funds: Upon approval, receive a percentage of the invoice value into your operating account—often within 24–72 hours.
5. Customer pays: The customer pays the invoice to a designated account or remits directly per agreed process.
6. Settlement: Once invoice payment is received, the outstanding advance is repaid and any remaining balance, minus fees, is released to you.

Eligibility and Underwriting

Eligibility is assessed on several factors including the credit quality of your customers, overall receivable concentration, your company’s financial performance and industry risk profile. Businesses with recurring invoices to creditworthy buyers, clear invoicing procedures and a manageable level of receivable concentration typically achieve the most favorable terms. Start-ups with limited receivables or companies with high customer concentration may face additional underwriting requirements or lower advance rates.

Required Documentation

• Business formation documents and ownership information
• Recent financial statements and bank statements
• Accounts receivable aging reports and sample invoices
• Customer contracts or purchase orders where applicable
• Accounts receivable ledger and collections policy

Costs, Fees and Terms

Pricing for invoice financing typically comprises an advance fee or discount rate applied to funded invoices, along with service or administration fees and any facility or renewal fees. Borrowing costs reflect factors such as invoice aging, customer creditworthiness, facility size and recourse vs. non-recourse treatment. Cathay Bank works to deliver competitive, transparent pricing and will outline all applicable fees during the proposal and documentation stages.

Timing and Turnaround

Once a facility is in place, individual invoice funding is designed to be rapid—many clients receive funds within 24 to 72 hours of invoice submission. Initial facility onboarding timing depends on diligence, legal documentation and the complexity of the receivable portfolio, and may take several business days to a few weeks.

Risk Management and Protections

Invoice financing reduces working capital strain but introduces considerations such as customer credit risk and operational controls. Cathay Bank performs credit assessments, offers optional credit protection options, and implements monitoring and reporting to manage concentration and fraud risk. Clear invoicing practices and timely remittance tracking help maximize benefit and minimize exposure.

Why Choose Cathay Bank for Invoice Financing

Cathay Bank combines relationship banking with industry knowledge to structure receivables financing that aligns with business cycles and growth plans. Clients benefit from experienced underwriting, responsive account teams and integrated treasury tools that simplify receivables funding and reporting. The bank focuses on clarity, customized solutions and ongoing partnership to support long-term financial health.

Frequently Asked Questions

Q: Can any invoice be financed? A: Eligible invoices typically must be valid, undisputed, to creditworthy customers and free of liens; each invoice is subject to approval. Q: Is financing recourse or non-recourse? A: Both options may be available; non-recourse often has higher fees and stricter underwriting. Q: How is pricing determined? A: Based on customer credit risk, invoice age, facility size and whether protection is purchased. Q: Will customer relationships change? A: Processes can be structured to minimize visibility; however, some arrangements require customer notification.

Cathay Bank's Invoice Financing is designed to be a practical tool for improving liquidity, reducing days sales outstanding and enabling businesses to operate with greater financial flexibility. Speak with a relationship manager to explore a tailored approach that fits your receivables profile and growth objectives.

Address Bank: Los Angeles, California, US, USA
Bank: Cathay Bank
Headquarters: Los Angeles
Products: Business Financing
Type: Invoice Financing