If you’re a small business owner, you’re probably all too familiar with unpaid invoices. This unfortunate reality is even more frustrating when you factor in operational costs and the salaries of your employees that you can’t afford to delay. Invoice factoring companies offer the perfect solution by enabling you to sell your unpaid invoices for upfront cash. The trick is knowing which factoring company to choose. That’s why we’ve compiled a list of the best names in the business.
BlueVine offers invoice factoring services for B2B businesses that need to fill financial gaps quickly. Thanks to its quick and straightforward application process and highly navigational dashboard, the funds can arrive in your account within 24 hours. Businesses from several different industries qualify for BlueVine's capital - from IT services to manufacturing and distribution. The company’s business factoring loans are usually 90% of the total amount of the invoice. The best part is that you don’t need to have a perfect FICO to apply at BlueVine. Read Review
- ⦿Up to 90% of the loan amount
- ⦿A+ on BBB
- ⦿Flexible invoice requirements
If you’re looking for the best invoice factoring but you aren’t sure which lender offers the best borrowing terms, Lendio is the right place for you. With dozens of online lenders offering factoring finance support, this middleman can help you find the best one. Moreover, the company offers a factor rate as low as 5%. When you fill in the questionnaire on the company’s website, your details will be distributed among dozens of online lenders that will send you their offers. Lendio’s dedicated manager will help guide you through the entire process. Read Review
- ⦿Factoring rate can be as low as 5%
- ⦿No collateral
- ⦿Simple to apply
The next name on our top-rated factoring companies list is Triumph Business Capital. This company tailors its services to specific industries, including trucking, freight brokers, staffing, government contractors, and small businesses. Triumph Business Capital offers non-recourse factoring, meaning you don’t need to worry if your customers don’t pay invoices. But since the company takes all the risk, you can expect higher rates. Read Review
- ⦿Fast funding
- ⦿Excellent for freight companies
- ⦿Low borrowing requirements
Nav is an online marketplace that offers access to numerous factoring firms. It screens your application and matches you with potential lenders for free. With its MatchFactor app, you can easily find the lender that perfectly fits your needs. In addition to different factoring receivables, the company offers a wide range of financial products. Hundreds of clients applaud its financial monitoring tool, which helps improve users’ financial health and gives them access to more affordable financial products. Read Review
- ⦿Affordable repayment terms
- ⦿Credit monitoring services
- ⦿Low factoring rates
Why Choose a Small Business Factoring Service?
Unpaid invoices can create serious cash flow problems and impede your business. That’s why many small business owners turn to invoice factoring, also known as accounts receivable factoring, to avoid difficulties with their own expenses.
– Reduce Turnaround Time
Some clients just don’t pay on time. That can result in unpaid invoices for 90 days or longer. But your utility bills, rent, and the salaries of your employees cannot be delayed. Enter invoice factoring companies. If you choose to sell your outstanding invoices at a discount to a third party or a factor, you’ll get quick access to some badly needed cash.
– Grow Your Business
Instead of wasting your time on pressuring clients to pay up, you need to focus on growing your business. The money you get from invoice factoring enables you to take advantage of all new growth opportunities.
– Flexible Requirements
Unlike traditional banks, online lenders don’t reject your application for invoice factoring because you have a poor credit score. A good credit score, however, means you can get better repayment terms. If you need quick access to funds for your small business, factoring companies are your best bet.
– More Control Over Your Finances
With small business loans or revolving lines of credit, you get a lump sum. You might not need all of the money, but you have to pay back the loan in its entirety. Invoice factoring gives you more control over your finances. Most companies allow you to choose which invoices you want to factor.
The best invoice factoring companies for small businesses will keep your invoice agreement private. Although invoice factoring is perfectly legitimate, many businesses prefer that customers never find out about it. If you aren’t sure that your customers will pay on time, you don’t need to inform them that you’ve sold their invoices to a third party.
– No Collateral
Another great thing about invoice factoring is that you don’t need to use your valuable assets as collateral. All you’re doing is selling your invoices to a factor per a factoring agreement.
Our Methodology for Evaluating the Best Factoring Companies
Invoice factoring is a wise move if you want to avoid financial difficulties or accelerate your business growth. Whether you need to pay salaries or rent a new place for your business, having access to cash is crucial. Numerous online lenders buy unpaid invoices and make payments within 24 hours.
Factoring services are available online, which simplifies the whole process. In addition, there are websites that function like middlemen. Based on your credit score and other business details, the sites recommend lenders that suit your needs.
We’ve reviewed numerous commercial factoring companies and compiled a list of the top names in the business. Here are our criteria for finding the best companies.
Factoring online is designed to make it easier and faster for you to get your money. That’s why you need to choose a company with an easily accessible online dashboard where you can submit all your details. This way you don’t need to waste time by going to lenders with copies of your documents.
You begin the application process by providing basic information about yourself and your business. There are questions related to your credit score, monthly revenue, and how long you’ve been in business. Some public factoring companies may ask for additional details like your Social Security number and driver’s license. It shouldn’t take longer than one business day for your application to be reviewed.
It’s entirely up to you whether you accept any of the offers. If you’re satisfied with the terms and conditions, you can start creating an account to receive the funds. You can also use your existing bank account.
The companies we’ve evaluated make quick payments. Although it depends on how long it takes your bank to complete the transaction, in most cases you’ll get the money between 24 and 48 hours.
The best invoice factoring companies of 2021 allow clients to choose which invoices they want to factor. Clients appreciate this service because they can control which accounts and invoices they want to sell. Some companies aren’t as accommodating and require all invoices from a particular client or a certain period of time.
Recourse and Non-Recourse Invoice Factoring
You have two options if your customer doesn’t pay. The first is non-recourse invoice factoring. That means the factor takes full responsibility if your client doesn’t pay the invoices. Due to the considerable amount of risk involved, even the best non-recourse factoring companies charge higher rates. The second option is recourse factoring, which is more common. In this case, you’ll be responsible for your customer’s debts, but you’ll pay a lower rate.
Payment and Discount Rate
When it comes to invoice factoring, you should know that you’ll never get the full invoice amount. Most companies offer between 75% and 90% of the total amount on the invoice. The rest is used by the company to protect itself from risk. From this amount, the company charges fees for its services, called the discount rate. Cheap factoring companies have a discount rate that ranges between 1% and 6% per month. Each lender calculates the rate based on several factors, including your credit score, the repayment term, and the invoice amount.
Besides invoice factoring, the companies we’ve evaluated facilitate small business loans and offer a variety of other financial services.
The Best Factoring Companies for Small Businesses
- Triumph Business Capital
Invoice Factoring Companies Reviews
- ⦿ Compatibility with QuickBooks, Xero, and FreshBooks
- ⦿ Fast payment processing
- ⦿ Low rates
Founded in 2013, BlueVine is one of the best invoice factoring companies on the market. Countless online reviews applaud the simple application process, the 24-hour processing time, and the company’s short contract terms. The BBB gives this company an A+ rating, which underscores the provider’s trustworthiness.
Bluevine invoice factoring services are tailored to business owners who need quick cash. Once you get approval for your invoices, you can expect the funds in your account within a couple of hours, and there are no restrictions on what you can use the money for.
Unlike some other invoice funding companies, BlueVine doesn’t set any conditions on the invoices that you can factor. For example, the company won’t ask for invoices from specific customers or from certain time periods. Also, there is no limit on the number of invoices you can sell. This gives you greater control over your finances.
BlueVine has a simple and straightforward application process that you can complete online. The company will check your personal information (name, address, date of birth, etc.), but you’ll also need to provide details about your company (monthly revenue and years in business). This online invoice factoring service also pulls your credit report. But even if you have a poor credit score, you’re still eligible for BlueVine factoring.
After you create your account at BlueVine, you can use the interface to send invoices, or you can connect your existing invoice software. QuickBooks, Xero, and FreshBooks are all compatible with BlueVine. But before you send your invoices, make sure you have confirmation from your customers; otherwise the company will not accept them. BlueVine reviews the submitted invoices and then sends you between 85% and 90% of the total amount.
Like most invoice financing companies, BlueVine offers recourse factoring services. This means that you are fully responsible if your client doesn’t pay the debt. On the other hand, if you have clients who pay their invoices regularly, recourse factoring is actually a good solution because the company charges lower invoice factoring rates. At BlueVine, the rate can be as low as 0.25%. If your client doesn’t pay, you can either cover the invoice yourself or enroll in the company’s installment plan.
Although there are no rules about how many invoices you can factor, the face value must be higher than $500. The face value or face amount is the total amount of an invoice that your client must pay to the factor.
Much like other financial factoring companies, BlueVine follows certain guidelines when deciding which businesses are eligible for its funds. Companies in the IT sector, manufacturing, and the distribution industry are all welcome at BlueVine. Although its factoring loans have short repayment terms, BlueVine is still the best option for many B2B businesses that need a large sum of money (up to $5 million).
- ⦿ Dedicated agent to help you choose the right lender
- ⦿ Loan calculator
- ⦿ Rich FAQ section
Lendio is one of the most popular marketplaces for connecting prospective borrowers with reliable online lenders. The company has been in business for almost 10 years, offering a broad range of financial services, including small business loans. But it also serves as an account receivable factoring company, with up to 75 lenders that offer factoring services. BlueVine, Fundbox, and Reliant Funding are just some of the names on that list.
The application process for invoice factoring couldn’t be simpler. It takes a mere 15 minutes to complete, and you don’t need to install any invoice factoring software on your computer because everything can be completed through Lendio’s site. Simply click on factoring services and start the online application.
There is no minimum credit score requirement, but you still need to provide your current credit score. The company also asks about your revenue, the number of years you’ve been in business, your Social Security number, and a few other details. After submitting the documentation, the company’s system identifies factoring financial services that are suited to your needs. If you’re not sure which lender is the best fit for you, Lendio agents are trained to help you make the right decision.
In addition to the speedy application process, payments are also relatively quick. When you accept an offer from a lender, you’ll need to wait up to 72 hours before you get the money in your account.
Lendio provides 80% of the invoice amount upfront and charges a factor rate as low as 5%. Just like with other top factoring companies on our list, you don’t need to provide any collateral to get the money. Your outstanding invoices act as collateral. Also, when you fill in the questionnaire on the Lendio website, you’ll need to say why you want to factor your invoices. Reasons vary from inventory factoring to opening a new business.
Another great thing about this site is that you don’t need to pay any additional fees. For example, even the largest factoring companies sometimes charge a diligence fee, whereas this factoring company charges only factoring fees.
We applaud Lendio for its level of transparency when it comes to costs and services. Also, the company’s website has a rich and well-organized FAQ section that can be very useful when you’re searching for additional information about factoring services and other financial products.
- ⦿ Invoice factoring calculator
- ⦿ Simple online application
- ⦿ Non-recourse factoring
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.
Factoring is a financial transaction involving the sale of unpaid invoices at a discount to a third party or a factor. The factor charges a small fee for its services, converting your accounts receivables into instant cash. This is a type of funding that many small business owners prefer because it enables them to cover all their costs and invest in growth opportunities.
It depends on what you’re looking for. If you want to get funds on your account as soon as possible, you should try BlueVine. Not only does the company have a fast and simple application process, but it also funds your account immediately after you sign the contract. If you aren’t sure about your eligibility for these services, we suggest you try Lendio. This is a popular marketplace that can easily connect you with online lenders that offer invoice factoring with no credit check.
If you have customers who pay regularly, invoice factoring is a smart move. A reliable invoice factoring company will give you affordable discount rates and since your clients pay on time so, you don’t need to worry about late fees.
Companies use factoring to pay bills, give salaries to employees, buy new inventory, or pay debts. Instead of waiting for clients to pay invoices, companies get instant access to money they can invest to grow their business.
BlueVine is one of the most popular invoice factoring companies in the US. The company has already supplied more 25,000 businesses with financial products, which means that it’s a proven and secure lender. To get more detailed information on its factoring services, read our BlueVine review.