The Creative Finance Glossary

Finance terms can make funding feel more complicated than it needs to be.

This glossary explains the language of receivables-backed working capital in clear terms for agencies, media companies, talent managers, production businesses, and creator-led companies.

Accounts Receivable

Accounts receivable is money owed to a business for goods or services already delivered or earned. For creative businesses, this may include unpaid invoices from brands, agencies, platforms, sponsors, or clients.

Advance Rate

An advance rate is the percentage of an eligible receivable that a lender may fund upfront. For example, if a business has a $100,000 eligible receivable and the advance rate is 85%, the business may receive $85,000 before the client pays.

Aging Report

An aging report organizes unpaid invoices by how long they have been outstanding. It helps businesses and lenders understand which receivables are current, nearing due, or past due.

Borrowing Base

A borrowing base is the amount of financing available based on eligible receivables or other approved collateral. As receivables change, the borrowing base may also change.

Contract Advance

A contract advance is financing based on contracted revenue that may not yet have been invoiced or collected. It can help businesses access capital tied to signed work or expected payment streams.

Counterparty

A counterparty is the entity responsible for payment. In receivables financing, this is often the brand, agency, platform, or client that owes money to the borrower.

Dilution

Dilution refers to reductions in the expected value of receivables. This can happen through credits, refunds, disputes, offsets, or adjustments.

Eligible Receivable

An eligible receivable is an invoice, contract, or payment stream that meets a lender’s criteria for financing. Eligibility may depend on documentation, client quality, payment terms, and dispute risk.

Factoring

Factoring is a type of receivables financing where a business sells invoices or receivables to a financing provider at a discount in exchange for earlier access to cash.

Invoice Financing

Invoice financing allows a business to access capital based on unpaid invoices. The business receives funding before the customer pays the invoice.

Net 30 / Net 60 / Net 90

These are payment terms that describe when payment is due after an invoice date. Net 60 means payment is due 60 days after the invoice date.

Purchase Order

A purchase order is a document issued by a customer authorizing a purchase or project. It may support a receivable or contracted revenue.

Receivables Financing

Receivables financing is a form of working capital financing based on money a business expects to collect from customers.

Revolving Credit Line

A revolving credit line allows a business to borrow, repay, and borrow again up to an approved limit. In receivables-backed lending, availability may be tied to eligible receivables.

UCC Filing

A UCC filing is a public notice that a lender may have a security interest in certain business assets. It is common in secured commercial lending.

Working Capital

Working capital is the capital used to fund day-to-day business operations, including payroll, vendors, contractors, production costs, and other expenses.