When it comes to funding a small business using their Accounts Receivable as collateral, the credit strengths of the customers are more important than the borrower’s credit. The key to any asset-based funding is the strength of the assets; specifically the value and collectability of the collateral used to support the funding. The perceived quality of the accounts receivable are based on three major components: the credit scores of the client’s customers, the irrevocable quality of the invoices, and how quickly the customers pay the invoices that the small business is sending out. If a lender is very comfortable with these issues, then it is extremely likely that the lender will provide financing to that small business using their Accounts Receivable as collateral. Even if the business owner has bad credit.