Invoice Financing at TD Bank, N.A.

Invoice financing from TD Bank, N.A. is designed to help businesses convert unpaid invoices into immediate working capital. Whether you are a small business managing seasonal demand, a mid-market company optimizing cash flow, or a growing enterprise funding expansion, invoice financing can unlock the value of accounts receivable so you can pay suppliers, meet payroll, and invest in growth without waiting for customers to pay.

What is Invoice Financing?

Invoice financing is a funding solution where a financial institution advances a percentage of your outstanding invoice value against invoices issued to creditworthy customers. The advance typically ranges from a portion of each invoice’s face value, and the remainder (less fees) is remitted when the customer pays. This product is sometimes called invoice factoring, receivables financing, or accounts receivable lending, and may be structured with recourse or non-recourse options depending on the arrangement.

Key Benefits

• Immediate liquidity: Access cash tied up in unpaid invoices within days instead of waiting 30–120+ days for payment.
• Flexible funding: Finance invoices as they are issued; funding grows with your sales, providing a scalable source of working capital.
• Improved cash flow predictability: Smooth seasonal fluctuations and align cash inflows with operating needs.
• Maintain supplier and employee relationships: Pay suppliers and staff on time without disrupting operations.
• Outsourced collections (optional): Some arrangements include collection services to help manage receivables and reduce administrative burden.

How It Works

1. Submit invoices: You provide copies of eligible invoices issued to approved customers.
2. Receive an advance: TD Bank evaluates the receivables and advances a percentage of the invoice value.
3. Customer payment: Your customer pays the invoice directly to the bank or to a designated account depending on the agreement.
4. Final settlement: After the customer payment is received, the bank remits the remaining balance to you, minus fees and any reserve.

Who Can Benefit

Invoice financing is well suited to businesses that:

• Sell goods or services on open account terms (net 30, net 60, etc.).
• Have creditworthy customers with predictable payment behaviors.
• Need a revolving source of working capital tied to sales volume.
• Prefer not to dilute ownership by taking equity financing.

Product Features

• Advance rates: A percentage of eligible invoice value is advanced; rates vary by industry, customer credit quality, and invoice terms.
• Facility term: Short- to medium-term facilities that may be structured as revolving lines tied to receivables.
• Fees and pricing: Fees typically include a discount or factoring fee and may include service or facility fees; pricing is customized to the credit profile and transaction size.
• Reporting and online access: Access account activity and funding reports through bank platforms for transparency and reconciliation.
• Collateral and security: Receivables are usually the primary collateral; additional collateral or guarantees may be required depending on credit assessment.

Typical Eligibility and Documentation

To evaluate an invoice financing request, TD Bank generally reviews:

• Company financial statements and cash flow history.
• List of customers and aging of accounts receivable.
• Copies of invoices, purchase orders, and any master agreements with customers.
• Business ownership documentation and references.

Specific documentation requirements vary by product and client profile. The bank works with clients to determine an efficient submission and onboarding process.

Use Cases and Examples

Invoice financing can be applied across many industries. Examples include:

• Manufacturing: Fund raw material purchases to fulfill large orders while waiting for customer payment terms to elapse.
• Wholesale and distribution: Finance inventory turns and support seasonal buying cycles without tapping into credit cards or owner capital.
• Professional services: Bridge the gap between milestone billing and final payment for project-based work.
• Transportation and logistics: Cover fuel and driver payroll costs while invoices are processed by shippers or brokers.

Considerations and Risks

While invoice financing delivers fast access to cash, businesses should consider:

• Cost: Fees and discounting reduce the amount received compared to full invoice face value.
• Customer relationships: Some factoring arrangements involve direct customer notification; choose solutions that preserve your customer communications if desired.
• Credit risk: Advances are often based on customer credit; if a customer defaults, responsibilities depend on whether the facility is recourse or non-recourse.
• Operational integration: Implementing receivables financing may require changes to billing, collections, and accounting workflows.

How to Apply

The application process is tailored to each business. Typical steps include an initial consultation to assess needs, submission of financial and receivables information for underwriting, negotiation of facility terms, and onboarding. The bank works to align the structure, fees, and operational procedures with your business model.

Frequently Asked Questions

Can I finance invoices from multiple customers?

Yes. Most invoice financing facilities support invoices from multiple approved customers and scale as sales increase.

Will customers know I am using invoice financing?

That depends on the structure. Some agreements are confidential and do not require customer notification; others require assignment notices or collections handled by the bank.

Is invoice financing the same as a loan?

Invoice financing is a form of secured lending where receivables serve as collateral; it differs from term loans in that funding is linked to specific invoices and can be more flexible.

Conclusion

Invoice financing at TD Bank, N.A. offers a practical tool to transform accounts receivable into working capital, smoothing cash flow and supporting operational needs without giving up equity. With flexible structures, tailored pricing, and industry expertise, businesses can choose an approach that fits their sales cycle and customer profile while preserving focus on growth and service delivery.

Address Bank: Cherry Hill, New Jersey, United States
Bank: TD Bank, N.A.
Headquarters: Cherry Hill, New Jersey
Products: Business Financing
Type: Invoice Financing