> Debt tends to be hard for super new companies, even with orders in hand. If you are developing a new product and don't have cash up front, there's a good chance you never deliver, and both lenders and potential customers know that. Also looks unattractive in future VC rounds, but in this case probably secondary to my first point.
There is always factoring (ie. sell the receivable for a large fraction — typically 90-95% — of the face value). It eats into your profit margin, but you get the money up front, the customer pays on net30 (or whatever) terms, and you don't have to deal with billing. It works best when you need the money to buy materials or build capacity in order to fulfill the order. The longer the lead time from spending money on materials to delivery and billing, the more attractive factoring becomes.
Factoring is common and essential to certain industries like clothing that have very long lead times & where the buyers have leverage to insist on net60 or net90 terms.
There is always factoring (ie. sell the receivable for a large fraction — typically 90-95% — of the face value). It eats into your profit margin, but you get the money up front, the customer pays on net30 (or whatever) terms, and you don't have to deal with billing. It works best when you need the money to buy materials or build capacity in order to fulfill the order. The longer the lead time from spending money on materials to delivery and billing, the more attractive factoring becomes.
Factoring is common and essential to certain industries like clothing that have very long lead times & where the buyers have leverage to insist on net60 or net90 terms.