Accounts receivable (A/R) financing is a credit line secured by your outstanding invoices, allowing nurse staffing firms to borrow against their receivables instead of waiting 30–60 days for client payment.
Unlike factoring, the agency retains ownership of the invoices and repays the lender over time with interest.
Why Accounts Receivable Financing Matters for Nurse Staffing
Nurse staffing agencies run payroll weekly, but healthcare facilities often pay slowly. A/R financing helps bridge this timing gap without waiting for reimbursements.
It is especially useful for agencies that:
- Have established cash flow
- Maintain good credit
- Want financing without client notification
Key Characteristics of Accounts Receivable Financing
- It is a loan, not a sale of receivables
- Credit is based on the agency’s financial strength
- Invoices are used as collateral
- Lines typically range from $50,000–$1,000,000+
- Interest ranges from 9–14% APR
How Accounts Receivable Financing Works
- Your agency submits invoices to an A/R lender.
- The lender approves a credit line based on receivables.
- You draw funds as needed for payroll or expenses.
- You repay the lender as clients pay you.
Accounts Receivable Financing vs Factoring
| Feature | A/R Financing | Invoice Factoring |
| Type | Loan | Sale of receivables |
| Debt Added | Yes | No |
| Ownership of A/R | You retain | Factor owns |
| Client Contact | None | Required |
| Speed | Medium | Fastest |
| Best For | Established agencies | Rapid-growth staffing firms |
Pros and Cons of Accounts Receivable Financing
Pros
- Retain control of collections
- Confidential funding
- Lower-cost than MCA loans
Cons
- Requires strong credit
- Adds debt to balance sheet
- Slower than factoring
Best Uses for Nurse Staffing Firms
- Expanding contracts at steady growth
- Agencies with strong credit histories
- Firms wanting private financing
Final Takeaway
A/R financing is a strong tool for established nurse staffing firms that want credit-based, confidential financing. However, for newer or rapidly growing agencies with weekly payroll needs, invoice factoring is often a better fit.
Need help choosing? PRN Funding can evaluate both options based on your revenue and growth stage.
