Benefits of Securitizing Trade Receivables

Benefits of Securitizing Trade Receivables

Benefits of Securitizing Trade Receivables

If you carry a large AR book and you can prove collections discipline, securitization can drop your all in funding cost, raise advance rates, and create a repeatable capital channel that grows with sales. Here is what you gain compared to ABL lines or factoring.

Outcome: a bankruptcy remote SPV that buys your receivables and funds them with senior and mezzanine notes, giving you cheaper capital, more headroom, and stronger cash control.

What You Get When You Securitize

Lower cost at scale
Senior paper can price inside ABL once the pool is clean and sized. Fixed setup costs are spread over a larger base.
Higher advance rates
Eligibility tests are precise. With tight data and lockbox control, seniors push higher advance on prime obligors.
Stable capacity
Warehouse to term model gives durable capacity that grows with sales, not quarterly bank appetite swings.
Off balance sheet potential
With true sale and derecognition, leverage optics improve. If not, treat it as secured borrowing and still bank the pricing win.
Better counterparty mix
Tap bank conduits, private credit, and insurers in one program. You are not hostage to a single lender memo.
Cleaner governance
Trustee, admin, and clear waterfalls remove debate over who gets paid first and when cash sweeps happen.
Custom triggers
Early amortization trips on objective tests. If performance dips, the deal pays down in a controlled way, not in a panic.
Stronger buyer discipline
Collections teams level up because data and dispute logs are watched by investors and the trustee.

Financial Impact Compared To Other Options

Feature Securitization ABL Revolver Factoring
All in cost at scale Low to mid single digit spread over base for senior, mezz behind Mid single digit spread over base, fees vary by cycle Highest, discount plus extras on disputes and recourse
Advance rate on prime obligors High with tight eligibility and lockbox Good but capped by policy and ineligibles Varies, often lower after reserves and fees
Capacity growth with sales Strong, warehouse to term ramp Moderate, credit committee cycles can drag Weak, buyer limits and fees choke growth
Balance sheet presentation Possible derecognition if true sale is achieved On balance sheet debt Off balance sheet for some programs, but costly

Who Gets The Biggest Win

AR outstanding above USD 50 million
Enough volume to make fixed legal and admin costs small as a percent of funding.
Diversified obligor base
No single buyer over set caps. Cleaner eligibility, fewer reserves, better pricing.
Strong data tape
At least 24 months of billed, paid, DPD, recoveries, and dilution trends by cohort.
Collections discipline
Lockbox or account control live, daily sweeps, and clean reconciliations to GL.

Trade Offs To Be Honest About

Topic What it means for you
Upfront legal spend Material setup cost first time out. Payback comes from larger, cheaper senior balances.
Ongoing reporting Monthly packs and data feeds. Your finance stack must deliver accurate numbers on time.
Trigger management If KPIs breach, the deal pays down early. Discipline matters.

Fast Benchmarks

Item Typical range
Recommended minimum rolling AR USD 25 to 50 million for private warehouse, USD 100 million plus for rated term
Upfront setup budget Low seven figures for rated term, mid six figures for private warehouse, plus arranger
Time to first draw 60 to 120 days once data tape and account control are ready
If you want cheaper, repeatable capital against receivables and you have the volume to support it, we will scope your data, model advance rates, and give you a costed path to warehouse or term. Send the last 24 months AR data tape and your buyer map.

Assess Your Securitization Readiness

Share your AR tape, obligor concentrations, and target capacity. We will return indicative pricing, advance rates, and a closing timeline.

Talk to the Team

Ranges and timelines are indicative. Any securitization requires due diligence, KYC and AML checks, sanctions screening, and legal opinions on true sale, tax, and accounting. Final pricing and structure depend on pool performance and investor appetite.

Get Started With Us

Submit Your Deal & Receive a Proposal Within 1-3 Working Days

Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


All submissions are promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.

Express Application Submit Your Deal
Request a Proposal
Request a Proposal / Submit a Deal

Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.

Trade Finance

Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.

Submit a Request

Project Finance

Access non-recourse funding for infrastructure, renewable energy, or other capital-intensive ventures. We mitigate capital constraints by isolating project assets and focusing on risk management. Provide your details to receive a structure that drives growth and maximizes returns.

Submit a Request

Acquisitions

Secure financing for business or real estate acquisitions. We ease transaction hurdles by reviewing cash flow, synergy opportunities, and exit plans. Complete the form for a customized proposal that supports your strategic investment objectives.

Submit a Request

For Banks

Financely assists banks facing Basel III pressures by distributing trade finance deals and providing collateral for letters of credit. We reduce capital burdens while preserving client relationships and fostering service expansion. Submit your request to optimize your trade finance offerings.

Submit a Request

Once we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.

Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.

Still Have Questions? Schedule a Consultation

If you still have questions after visiting our FAQ and Procedure pages, we invite you to book a paid consultation for personalized guidance. A $250 USD fee applies per session.