Receivables Financing vs. Supply Chain Finance vs. Dynamic Discounting: What B2B Businesses Need to Know

By: Charlotte Ng, Chief Product Officer
Published April 16, 2026 | Estimated read time: 2 min

For B2B businesses selling into large enterprise customers, managing cash flow is one of the biggest constraints to growth. Long payment terms—often 60, 90, or even 120 days—can leave revenue locked in invoices, limiting access to working capital.

A key advantage to using early payment solutions to finance business growth is that it’s non-dilutive working capital; it keeps the business’s balance sheet light and avoids the costs that come with incurring debt or raising equity. There are several types of early payment solutions, each with distinct benefits and tradeoffs: 

• Dynamic Discounting, 

• Supply Chain Finance, and 

• Receivables Financing

In this blog, we explain what these are and break down the pros and cons of each from the perspective of a small supplier to a large enterprise customer. 

Dynamic Discounting

Dynamic discounting is an early payment solution where a large enterprise customer pays a supplier’s invoice ahead of agreed terms (e.g., Net 90) in exchange for a discount. There are nuances to how each program may be structured, but at a high level, the sooner the customer pays, the larger the discount.  

Such programs are funded with the customer’s own balance sheet. Large corporates set them up to earn a return on their excess cash, reduce their cost of goods sold, and strengthen their supply chain by paying suppliers early. 

The cost of these programs for suppliers can run the gamut. For most businesses, the discounts they can get from a corporate program are lower than any external cost of funds. However, depending on the customer and their treasury management objectives, some programs are priced extremely high; in these cases, the supplier would be better off getting funding from a third party.  

Supply Chain Finance

Supply chain finance (SCF; also known as Reverse Factoring) programs are a variation of customer-sponsored early pay programs where the funding comes from an external source, such as banks or private credit funds. Because there’s an external financing party involved, the legal mechanism is more complex, and typically includes an Irrevocable Payments Undertaking (IPU), a commitment from the large corporate to pay the invoices in full on a specific date, as well as the Receivables Purchase Agreement, an ownership transfer of the receivable asset to the financing party. 

Large enterprises are the typical sponsors of SCF programs; some are cash-strapped and use these programs to lengthen their Days Payable Outstanding (DPO) while paying their suppliers early with external capital. Even though legally it is not considered debt, U.S. and international accounting standards bodies require enterprise sponsors to transparently disclose details of their SCF programs. As a result, there’s a limit to how prevalent and accessible these programs are for small suppliers. An enterprise customer may limit funding to their largest, most strategic suppliers, leaving its long tail of small suppliers to find other sources of capital. 

With both dynamic discounting and supply chain finance, even if the solution is affordable for the small supplier, it only solves their problem for that one customer.  As a result, CFOs of small businesses are often trying to put together a patchwork of solutions to address their full working capital needs.  In both cases, the end customer has full control over the availability, price, and timing of financing, which can make it difficult for smaller businesses to negotiate better terms and more difficult to do business with customers who don’t offer such programs. 

Receivables Financing

Receivables financing is a form of working capital that doesn’t require an enterprise customer to fund or sponsor the program. The capital comes from an external financing party, such as a bank or factor. The primary legal mechanism is the ownership transfer of the receivable asset to the financing party through the Receivables Purchase Agreement. 

Receivables financing can be structured in different ways. Traditional factors will have more onerous requirements such as minimum financing volumes, lock-up periods, and invoice verification and collection directly from customers. Outside of select industries, such as transportation & logistics, energy, and fashion/retail, factoring remains uncommon and has a negative reputation given lengthy onboarding, manual processes, and intrusiveness of factors into the supplier’s B2B relationships. 

As an early payment solution, there are strong merits to receivables financing. The supplier is in the driver's seat when it comes to accessing capital, as opposed to being offered financing piecemeal by certain customers, if any. Financing ramps up alongside revenue in a virtuous cycle—the more revenue a business realizes, the more working capital it can unlock which in turn fuels future growth—so that the business doesn’t need to take on leverage or raise dilutive capital.  

OneAM Early Pay: The Modern Receivables Finance Solution

At OneAM, we’ve designed Early Pay to amplify the benefits of receivables financing—greater control, independence, and resilience—while eliminating the friction and intrusiveness of traditional factoring. 

From an onboarding process that takes minutes, to the ability to choose which invoices to fund and when, OneAM Early Pay gives businesses flexible access to working capital without disrupting customer relationships. 

By staying in the background and removing traditional constraints, OneAM Early Pay enables businesses to scale without the typical tradeoffs of debt, dilution, or operational complexity.