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.
SMB Compass is a New York-based invoice financing company that offers financial services to small and medium businesses. The application process is straightforward, and the company has an excellent reputation. SMB Compass also offers other services such as business lines of credit, business term loans, and inventory financing. If you’re looking for invoice financing and don’t wish to wait for a bank loan, SMB Compass is an excellent option to consider. Read Review
- ⦿Up to 90% of the loan amount
- ⦿A+ on BBB
- ⦿Factoring rate starts at 1%
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
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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.
– Privacy
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.
Application Process
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.
Funding
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.
Flexibility
The best invoice factoring companies of 2022 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.
Other Services
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
SMB Compass
- Lendio
- Triumph Business Capital
- Nav

Invoice Factoring Companies Reviews
SMB Compass Review
EXCELLENT
EXCELLENT
EXCELLENT
- ⦿ Fast application process
- ⦿ No minimum monthly volume commitments
- ⦿ No long-term contracts
Lendio Review
EXCELLENT
AVERAGE
FAIR
- ⦿ Dedicated agent to help you choose the right lender
- ⦿ Loan calculator
- ⦿ Rich FAQ section
Triumph Business Capital Review
EXCELLENT
FAIR
FAIR
- ⦿ Invoice factoring calculator
- ⦿ Simple online application
- ⦿ Non-recourse factoring
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.