Invoice Factoring Companies: Our Top Picks for 2024

SMB Compass is a company that offers invoice financing to small and medium businesses. This service can be helpful for businesses that need quick access to capital to grow their business.

SMB Compass has been in business since 2017 and is headquartered in New York, NY. Since its launch, the company has provided over $250,000,000 to more than 1,250 US businesses, and those numbers keep rising.

SMB Compass has an A+ rating with the BBB, which is the highest rating a company can have, and it shows that the business is trustworthy and has a good track record. It’s one of the best invoice financing companies as it offers fast funding and has an excellent reputation. To qualify for invoice financing, your lender will first check your customers’ credit standing and the invoices’ net terms. They will also check your business’s financial stability and creditworthiness.

After that, you will be offered a loan based on a percentage of the total value of your invoices. Like most invoice financing companies, SMB Compass provides funding in as little as 24 hours, which is much faster than getting a bank loan.

The application process with SMB Compass is straightforward and consists of only a few steps: filling out an online form and providing basic information about your business.

You would need to enter the amount required, provide the name of your business, and confirm how long it’s been operational. Next, you should choose the industry you’re in and give some details about your customers, as well as phone number and zip code.

Lastly, you’ll be asked to provide your email address and full name, after which you can submit your application. After you submit the form, a funding specialist will review your request and reach out to you. The funds will be deposited into your account within 24 hours if everything is approved.

Unlike invoice factoring services, SMB Compass does not buy your invoices outright. Instead, they offer you a loan based on the value of your outstanding invoices, also called invoice financing.

These two terms are similar and often confused. Still, invoice financing would serve you just fine when you’re looking for a solution to your financial situation and decide on invoice factoring. It provides quick access to cash without making you give up control of your receivables.

At SMB Compass, factoring rates start at 1% and go up to 3%. Advance rates range from 80% to 95% of the total value of the invoices you wish to submit for financing.

The payment terms with SMB Compass are flexible, and you can choose to make weekly or monthly payments. The company also offers discounts on your invoices, saving you money.

Unlike some invoice funding companies, SMB Compass does not have hidden fees or charges. You will only be charged for the amount of money you borrow, and there are no origination fees or prepayment penalties.

SMB Compass also offers other services such as business lines of credit, business term loans, and inventory financing. So, if you’re looking for a company that can provide quick access to capital, then SMB Compass is a good option to consider.

The next name on our list of factoring companies is Triumph Business Capital. The Triumph factoring company was founded in 2004 and is an ideal solution for freight brokers, government contractors, and trucking companies. If you work in any of these industries and you’re looking for factoring services for your small business, look no further. Triumph factoring services are already being used by more than 7,000 small and midsize businesses.

According to the BBB, it’s one of the best–rated factoring companies around, having been accredited by the site since 2013.

To apply, simply select the factoring service for your relevant industry. Click on the “Get Started” button and fill in the necessary information. The other option is to click on the Triumph business capital login button, which is in the upper-right corner of the screen. You need to provide basic information, including your full name, address, and company name. You also need to provide information about your monthly sales. The company usually processes your application within 24 hours, then you get the funds in your account.

Factoring or selling receivables to companies might put your own business under the microscope. Triumph doesn’t evaluate your business based on how long it’s been in operation. Instead, the company checks your credit history. This might be the main downside when it comes to the Triumph application process. After you submit the documents, the company makes a hard credit inquiry and charges you $300. Even if your credit score is lower than 500 and you aren’t eligible for the company’s services, you’ll still need to pay this fee.

Another notable downside is the lack of transparency when it comes to rates. The company provides non-recourse factoring, meaning it takes the risk of collecting debts. For any business interested in accounts receivable factoring, this may sound like a good deal. But since the company buying the receivables is taking all the risk, clients have to pay higher rates. There are discounts available, but these depend on many factors, including your credit score and the number of invoices being sold. You can turn to the invoice factoring calculator to calculate the rates.

Triumph Business Capital is not the best option for companies that are looking for flexible invoice factoring. If you factor one invoice, you need to sell all the receivables from that particular client.