The best invoice factoring companies will have competitive rates and the ability to advance at least 90% of the amount of invoices owed to you from your customers. These companies should also be able to fund in less than three days. Since the best invoice factoring company will vary depending on your unique business circumstances, we’ve selected factoring providers with a wide variety of terms and qualification requirements.
Here are our eight picks for the best factoring companies:
Best Invoice Factoring Companies At a Glance
FundThrough: Best Overall for Terms and Financing Costs
Why We Like FundThrough
FundThrough is our pick as the best overall factoring company because of the competitive combination of its fees and terms. It has no requirement for how long you must factor invoices, can provide advances for up to 100% of your invoice amounts, and can get you funding approval as soon as the next business day.
A standout feature with FundThrough is that it places a large emphasis on ensuring your customers have a good experience when it comes to repayment. It states it already has strong relationships with many large buyers, allowing for a streamlined process in instructing them on redirecting payments to FundThrough. You can also provide additional transparency to your customers with the ability to use customized email templates to inform them of your decision to partner with FundThrough.
Invoice factoring with FundThrough is best done by linking your accounting software, such as QuickBooks or OpenInvoice. You can then choose which invoices you’d like to get funded, after which you can receive a deposit to your bank account in a matter of days if approved. Approval eligibility is largely based on your customer’s creditworthiness.
To be eligible, invoices must be less than 90 days old. You must also have at least one outstanding invoice of $100,000 or more to one customer that is a business or government entity.
FundThrough typically works with businesses invoicing large companies, such as big-box stores, located in Canada or the United States. It does not issue funding for construction or real estate, but you can review our guide to the best construction factoring companies for these options.
To learn more or to apply, you can visit the FundThrough website.
Universal Funding Corporation: Best for Long-term Factoring Needs
Why We Like Universal Funding Corporation
Universal Funding Corporation offers one of the lowest rates available. However, because of its requirement for a 12-month minimum commitment to factor invoices, this may not be a good fit for businesses that only need short-term or intermittent factoring needs.
altLINE is the other provider in our guide that has more competitive pricing. Comparing these two companies, Universal Funding may be a better option for you if your factoring amounts vary greatly each month. By comparison, altLINE’s clients have more consistent needs at anywhere from $15,000 to $20,000 monthly.
Universal Funding Corporation retains an in-house underwriting team, so you can get quick responses to any questions you have. You’ll also have a dedicated account representative with minimal fees, which include the following:
- Credit approvals: $35
- Lockbox fee: $50
- Outgoing wire fees: $30
There are no costs for same-day funding, overadvances, or monthly access fees.
If Universal Funding Corporation sounds like it may be a good fit for your business needs, you can visit its website for more information. There, you can find a toll-free number you can call to learn more about its programs. You can also complete an online application to begin the process.
Riviera Finance: Best for Startups and Smaller Funding Amounts
Why We Like Riviera Finance
Riviera Finance offers some of the lowest funding amounts in our guide. However, it is still an excellent option because of its competitive rates.
It serves clients in a wide range of industries. Most businesses are eligible as long as the terms for payment do not exceed 60 days. Some examples of industries served include trucking, personnel agencies, printing companies, manufacturers, wholesalers, and armed guard services. Riviera Finance typically works with clients that are newer businesses and those that earn up to $2 million in monthly revenue.
The company can also offer financing throughout the United States and Canada. Other products offered include small business financing, payroll factoring, and financing for working capital.
Head over to the Riviera Finance website to learn more or to apply.
Scale Funding: Best for High-revenue Businesses Seeking Flexible Financing
Why We Like Scale Funding
Scale Funding, formerly known as TCI Business Capital, recently underwent a rebrand. This does not reflect a change in ownership, but rather a shift in focus on providing excellent service to its customers to help them continue growing their companies. Scale Funding is a division of Scale Bank, formerly Fidelity Bank.
With that said, the rebrand has had minimal impact on the company’s previous fees and qualification requirements. It continues to require no factoring contracts, making it an excellent option for businesses that want the flexibility of factoring as infrequently as a month-to-month basis.
Like most other factoring companies, your ability to qualify will be dependent on the creditworthiness of your customers. You’ll also need to have a sufficient amount of sales, and we recommend $600,000 annually to increase your approval odds. Eligible invoices include business-to-business (B2B) and business-to-government (B2G). Business-to-consumer (B2C) invoices do not qualify for funding.
Scale Funding also offers complimentary services to companies that utilize its factoring product. You can get assistance with a credit analysis and risk assessment of customers to help you determine the likelihood of repayment. This includes access to credit histories and payment trends.
Treasury services are another complimentary service that you can use to help complete wire transactions and ACH transfers. Fuel cards and other discounts are also offered to help minimize the effective cost of running your business, and accounts receivable management can help with the collection of payment on your accounts.
To learn more, visit the Scale Funding website. There, you can get a quote in under 15 minutes and funding as fast as 24 hours.
altLINE: Best for Businesses With Large Amounts of Recurring Factoring Needs
Why We Like altLINE
altLINE works mostly with clients who can commit to factoring a large amount of receivables regularly. It also offers a high advance rate and low fees, making it our pick as the best provider for businesses seeking large recurring factoring products.
If you expect to factor at least $15,000 monthly, altLINE could be a good fit for you. Many of its clients factor a significantly larger amount each month, and you’ll be required to commit to a minimum of 12 months for factoring. Otherwise, it’s relatively easy to qualify as there’s no time in business requirement.
If you meet altLINE’S requirements, you could get $4 million in funding up to 90% of the outstanding invoice. Customers have up to 90 days to pay the invoice, and rates start as low as around 0.5% for the first 30 days.
You can visit altLINE’s website to learn more or to start your application. There are no application fees, and you can get a free online quote. If you decide to move forward with your application, you can prepare certain documents to expedite your funding. Commonly requested documents include copies of invoices you want to have funded, an accounts receivable aging report, and business bank statements.
eCapital: Best for Transportation Industry Expertise and Fast Funding Speeds
Why We Like eCapital
eCapital can work with businesses in a wide variety of industries but can offer its best terms to those in the transportation industry. Funding speeds, for instance, can be offered in as little as 48 hours for transportation businesses. Nontransportation companies, on the other hand, may need to wait up to several weeks for approval and funding.
Like many other companies, eCapital determines specific pricing and terms on a case-by-case basis. Loan amounts and credit limits are based on a review of your company’s customers. Similarly, rates are determined by things like invoice volume, the creditworthiness of your customers, and whether you want to get recourse or nonrecourse factoring.
You can head over to the eCapital website to learn more or to submit an application online.
RTS Financial: Best for Trucking Companies That Need Large Financing
Why We Like RTS Financial
If you need large funding amounts, RTS Financial can be a good option. It has no stated maximum funding amount as it determines it based on the amount of your outstanding invoices and the creditworthiness of customers. While trucking companies may be a more ideal fit, the company also works with those in oilfield services, textiles, staffing, distribution, and manufacturing.
By working with RTS Financial, you’ll also gain access to additional benefits that can save your business money. The company offers a fuel card program that can provide gas savings at over 2,400 locations across the nation. You’ll also get a weekly line of credit of up to $2,500 per truck that can be used for various vehicle expenses. Veterans may also qualify for additional discounts.
Other perks you’ll gain by using RTS Financial include the use of its account management software, which allows you to check the credit rating of companies to help you assess the risk level. You can also manage your invoices and other aspects of your trucking business, including dispatch, accounting, reporting, and driver communications.
Head to the RTS Financial website to learn more or to request a callback to begin the application process.
Triumph Business Capital: Best for Nonrecourse Transportation Factoring
Why We Like Triumph Business Capital
If your trucking business is looking specifically for nonrecourse factoring, Triumph Business Capital is an excellent option. It made our list of the best nonrecourse factoring companies thanks to its competitive rates, high advance rates, and fast funding speeds.
With nonrecourse funding, your company is not responsible for payment if your customer fails to pay the factoring company the amounts owed. This is different from recourse factoring, where your business would be liable for paying the factoring company in the event your customer defaults on its invoice. However, while nonrecourse factoring may be less risky for your business, it typically comes at a higher cost.
Triumph Business Capital also offers a fuel card discount program similar to RTS Financial. You can use the company’s online portal to run credit checks on new clients and select invoices to fund. Additional services include insurance and equipment financing.
If you’re interested in applying or learning more, visit the Triumph Business Capital website. There, you can complete an online form requesting a callback.
How We Chose the Best Factoring Companies
We took the following factors into consideration when selecting the best factoring companies:
- Rates and fees charged
- Contract requirement and minimum factoring period
- Qualification requirements
- Application, approval, and funding speeds
- Estimated APRs
- Advance rates
- Customer reviews and ratings
Alternatives to Invoice Factoring
Unlike getting other types of small business loans, it can be easier to qualify for invoice factoring since it doesn’t rely as heavily on your own credit or income profile. However, fees for this type of financing can add up, and it may not be the most economical way to solve cash flow issues. Here are some alternatives you can consider:
- Small business line of credit: This is a revolving line of credit that allows you to draw funds on an as-needed basis. Bluevine is an excellent provider to consider, as it can approve your loan and fund within 24 hours. Visit Bluevine to see its competitive rates.
- Small business term loan: Term loans can be a good choice if you know how much funding you need and don’t anticipate recurring needs for more funds. Term loans can include many different types of loans, including working capital loans and SBA loans. If you need a place to start, then see our guides to the best working capital loans and the leading SBA lenders.
- Rollover for business startups (ROBS): If you don’t need funds quickly, you can consider a ROBS. This gives you tax- and penalty-free access to your retirement accounts. A ROBS isn’t a loan, so you won’t pay any interest charges. Visit Guidant Financial, an excellent provider that can walk you through the process.
Frequently Asked Questions (FAQs)
In addition to finding a company that has qualification requirements you can meet, you should consider the fees and terms offered. Think about how often you may need to factor, as some companies require a minimum time commitment. If you don’t have frequent factoring needs, choosing a provider with a lower rate could end up costing you more if it also requires a contract to factor for longer than you need.
If you’re waiting for payment from customers, invoice factoring advances you a percentage of the amount you’re owed. This is a way to get funding more quickly before your customers have issued payment to you. You can read more about this in our guide on how invoice factoring works.
With invoice factoring, you could be liable for payment if your customer does not pay the factoring company. This risk can be mitigated if you opt for non-recourse factoring. Non-recourse factoring, however, tends to carry higher fees.
Bottom Line
If you’ve issued invoices to customers but need the money more quickly, invoice factoring can help you get an advance on those funds. Factoring companies can typically provide anywhere from 80% to 100% of the outstanding amount of your invoices in just a few days. Factoring can be more expensive than other financing options though, so you should consider other types of loans if you’re not in a hurry to get funding.