Receivables Financing vs Bank Loans: Faster Cash Flow Solutions for Exporters

For many exporters, waiting 60–120 days for overseas buyers to pay can create serious cash flow pressure. Two common ways to bridge this gap are receivables financing and bank loans. While both can provide working capital, they work in very different ways — and one is often better suited for growing export businesses.

Speed of Funding

• Bank Loans: Often involve long application processes, collateral requirements, and extensive paperwork. Approval can take weeks or months.

• Receivables Financing: Funding is based on the creditworthiness of your buyer and the validity of your invoices. Once approved, you can receive up to 90% of the invoice value within days of shipment.

Repayment Structure

• Bank Loans: Require fixed monthly repayments, regardless of whether your buyer has paid you.

• Receivables Financing: There’s no need to make repayments from your own cash flow. Your buyer pays us directly when the invoice is due, and we release any remaining balance to you.

Impact on Your Financial Position

• Bank Loans: Increase liabilities on your balance sheet, which may limit future borrowing capacity.

• Receivables Financing: Off-balance sheet and non-recourse options mean no additional debt and reduced exposure to buyer default.

Scalability

• Bank Loans: Provide a fixed sum. If you need more funding, you must reapply.

• Receivables Financing: Your facility grows with your sales — the more you export, the more funding you can access.

Risk Management

• Bank Loans: You carry the risk if the buyer delays or fails to pay.

• Receivables Financing: With non-recourse structures, we take on the risk of approved buyers not paying, protecting your cash flow and giving you peace of mind.

When Bank Loans May Be Suitable

• You need a large lump sum for a long-term investment.

• You have strong collateral and a strong credit history.

• Your funding need is not tied to specific invoices.

When Receivables Financing Fits Best

• You’re an exporter with confirmed shipments to creditworthy buyers.

• You need quick access to working capital without adding debt.

• Your business is growing and requires funding that scales with your sales.

• You trade with buyers in markets where payment terms are long.

How Convergence Capital Supports Exporters

At Convergence Capital Group, we specialise in receivables-based supply chain finance for exporters in Asia selling to global buyers.

• Up to 90% funding at shipment

• Fast onboarding with minimal paperwork

• Off-balance sheet and non-recourse options

• Global coverage for cross-border trade

We help you turn unpaid invoices into cash flow so you can fulfil orders, pay suppliers, and grow without waiting for buyer payments.

Find out if you qualify. Contact us.  

Cash Flow | Export Structures | Financial Inclusion | Global Economy | Invoice Financing | Receivables Finance | Supply Chain Finance | Trade Finance