Receivables financing is often the first thing ruled out when a business already has a bank loan. "We already have a loan with our bank." It's one of the most common reasons owners assume they can't get more funding. For a lot of receivables financing companies, that assumption is correct. Most of them need a clean claim on your invoices before they'll advance anything. The reason has less to do with your creditworthiness than with a piece of paperwork. It's the UCC filing your bank put in place when it approved that loan.
Why an Existing Bank Loan Usually Blocks Receivables Financing
When a bank extends a loan or line of credit, it typically files a UCC-1 financing statement. That's often a blanket lien covering all of your business assets, including accounts receivable. Finance experts explain it clearly: a UCC filing gives a lender first rights to collateral if a business defaults. Once that filing is in place, other lenders are generally unwilling to extend credit against the same assets, since they'd only be paid after the first lender is made whole. This is standard practice, not a judgment call by any lender. Blanket liens are common for bank loans, SBA loans, and most secured lines of credit, which means a large share of established businesses have one without necessarily thinking of it that way.
Many business owners don't realize a UCC filing exists until they apply for additional financing and receive an unexpected rejection. The filing is a public notice that establishes a lender's interest in certain business assets, but it doesn't prevent a company from operating or collecting payments from customers. The issue usually surfaces only when another financing provider reviews the business and sees that the receivables have already been pledged as collateral. At that point, the discussion shifts from whether the business qualifies for funding to which lender has the legal right to those assets.
A few reasons a second lender usually declines:
- The bank's UCC filing already claims your receivables as collateral.
- A second lender would only get paid after the bank is made whole.
- Negotiating a subordinate position takes legal work most lenders skip.
What Makes Unsecured Receivables Financing Different
AeroPay Express doesn't run into this conflict. We're not filing a UCC or taking a security interest in your assets in the first place. Our process is built around exactly that. Your customer confirms the invoice, and we advance up to 98% of its value, with non-recourse funding. Since there's no competing claim being filed, an existing bank loan doesn't create the same roadblock.
SoFi's overview of blanket liens explains the usual problem well. Lenders hesitate to accept a subordinate position, since it puts them at greater risk if the borrower defaults. That's exactly the risk we avoid by not taking a secured position at all. It's also why an existing bank loan doesn't disqualify you the way it would with most other lenders.
Who Receivables Financing Like This Works Best For
This tends to fit companies with a term loan or line of credit already in place. They simply need more cash flow than that facility provides, without renegotiating the bank relationship or asking permission to add a second lender. It also fits businesses mid-way through paying down a loan. They don't want to risk their terms by opening a new secured facility elsewhere. A manufacturer with an equipment loan is a good example. It might have plenty of receivables sitting unpaid while its bank facility stays committed to that equipment. In both cases, the receivables themselves become a source of funding, not a battleground between two lenders.
A Practical Path Forward
If you're in this position, here's a simple way to start the conversation:
- Pull together your outstanding invoices and a list of your customers.
- Note what your existing bank facility already covers.
- Give us a call; no sign-off from your bank required.
Nothing about our funding is designed to compete with the loan you already have. We'll also tell you plainly if your situation looks like a better fit for our sister company, AeroFund Financial, which handles more traditional secured factoring for businesses without that same lien conflict to work around.
If existing bank debt has made you assume there's nowhere else to turn, that assumption is worth testing. Reach out to AeroPay Express, and let's see what your unpaid invoices can do for you on top of what your bank already provides.
