It’s common for businesses that rely on accounts receivables to run into cashflow problems. Invoices aren’t due for 30 to 90 days, potentially leaving you without the capital you need to take on a new project.
Factoring is one way to keep your company’s cash flowing, relying on your accounts receivables to qualify for an advance of what you’re owed. This short-term financing may be especially helpful if you’re not able to qualify for traditional business loans.
Compare 4 top invoice factoring companies
Thinking of factoring your business’s invoices? Get started by comparing these top four factoring companies.
- Best for a comparison: National Business Capital
- Best for keeping your customer relationships: BlueVine
- Best for nonrecourse factoring: Riviera Finance
- Best for spot factoring: TCI Business Capital
Our methodology: How did we choose these providers?
We compared more than 20 factoring companies to come up with our four top picks. We looked at costs, minimum and maximum advances and whether or not you’re responsible for customers that don’t pay on time. We also considered factors like the length of contract, how it affects your relationship with your clients and reviews on sites like Trustpilot and the Better Business Bureau (BBB).
National Business Capital
- Advance rate: Varies by company
- Credit limit: $10,000 to $5 million
- Invoice requirements: Between $40,000 and $10 million in monthly invoices
- Eligibility requirements: 6+ months in business
- Fees: Vary by company
National Business Capital isn’t a factoring company itself. Instead, it’s a connection service that can help your business find multiple types of financing — including accounts receivable financing. Its partners have flexible eligibility requirements and work with business owners of all credit types.
Like BlueVine, its partner factoring companies offer access to a line of credit that your business can use to factor invoices as the need arises. However, the minimum invoice value is higher than many factoring companies. Factor fees vary depending on the company you work with.
- Advance rate: 85% to 90%
- Credit limit: $5,000 to $5 million
- Invoice requirements: Worth at least $500 from a business contract and due in 1 to 13 weeks
- Eligibility requirements: 3+ months in business, $100,000+ annual revenue, 530+ credit score
- Factor fee: 0.2% to 1.3% each week your clients take to satisfy the invoices
- Other fees: $15 wire transfer fee — optional
BlueVine is an online business lender and factoring company that offers invoice factoring with a twist: You can stay in touch with your customers after you’ve sold your invoices. It also lets your business choose which invoices to sell, and it doesn’t require a monthly minimum.
The downside is that BlueVine imposes stricter eligibility criteria than other factoring companies. It also doesn’t offer government contract factoring and focuses on recourse factoring only.
After your business signs up with BlueVine, you get access to a line of credit to factor invoices as needed.
- Advance rate: Up to 95%
- Credit limit: None
- Invoice requirements: Up to $2 million in monthly sales
- Eligibility requirements: Verifiable accounts receivables
- Fees: Varies
Riviera Finance has been offering invoice factoring since 1969, making it one of the most established companies in the industry. It offers non-recourse factoring, meaning you aren’t responsible for covering your client’s invoices if they don’t pay. This is less risk for you, though it can cost more. There are several different pricing plans, depending on your business.
Riviera Finance works with invoices due within 15 to 60 days — on the shorter end of the spectrum. Typically, companies sign on to a six-month contract, though you can opt for longer or shorter terms.
TCI Business Capital
- Advance rate: 80% to 95%
- Invoice requirements: At least $50,000 in monthly invoices
- Eligibility requirements: Meet minimum invoice requirement
- Fees: Varies by business
Another well-established factoring company, TCI has been offering factoring to all industries for over 20 years. You can renew your contract on a monthly basis, offering more flexibility than companies that require a months-long contract. You can use the calculator on its website to learn how much your business might pay.
It typically offers advances up to 90% on invoices due in 30 to 90 days. But it’s possible to factor invoices due in 120 days and up to 95% of your invoice’s value up front in some cases. You can also sometimes factor invoices that are up to 45 days past due.
Compare more business loan providers that offer factoring services
How can I find the right factoring company for my business?
When looking for a factoring company that works best for your business, ask yourself the following questions:
- Is my business eligible? While factoring companies are relatively lenient about who they’ll take on, you often must satisfy at least one or two requirements. Don’t waste your time with a company that ultimately won’t work with you.
- Does it accept invoices from my clients? Many factoring companies work with business-to-business and business-to-government invoices, but your business might work with other types of clients.
- How much can I get up front? Make sure your advance is enough to cover your business’s overhead costs.
- How does the factor fee work? Tiered factoring and prime plus can save your business money if its invoices are due within 30 days. If you have longer due dates, you might want to look for a fixed rate.
- Are there any other fees? Look for administrative and processing fees in particular. Some companies charge extra fees for optional services like wire transfers.
- How much will it cost? After you’ve narrowed down a few companies, crunch the numbers for a rough estimate of how much working with each company might cost.
They’re not lenders, but factoring services can be helpful for businesses looking to cover overhead costs — especially if you have trouble qualifying for business loans. But the process takes time and money, given the fees involved.
Not sure factoring is right for you? Explore your other business loan options.
Frequently asked questions
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