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Who are they?
A cash flow solution for small businesses that invoice commercial or government customers and have to wait for payment.
How popular are they?
NOWaccount has hundreds of customers and has purchased over $100 million in invoices.
Who will qualify?
Businesses that bill commercial or government customers by invoice and that have a good business credit rating.
Who are they right for?
Businesses that routinely invoice commercial and/or government customers and need a long-term solution that allows them to get paid right away for invoices that are due in 30-90 days.
None, but no contingency sales and no consumer transactions.
Personal Guarantee Required?
Apply in under 5 minutes, and receive funding within 5 business days. Initial enrollment takes about 2 weeks, but once you are enrolled and begin submitting invoices, they are paid within a few days.
Where do they lend / operate?
All 50 states. You can even sell your invoices to international customers.
How much capital can you get?
You can get up to a $1 million credit line, and there’s no minimum.
Cost / Interest rate?
Flat 1-time fee of 2.5 % for NET 30 invoices, 2.75 % for NET 60 invoices, or 3.00 % for NET 90 invoices. There is also a $50 setup fee, $35 monthly processing fee, and 1 % surcharge for invoices to international customers.
How do payments work?
NOWaccount pays you 90 % of the invoice up front within 5 business days and the remaining 10 % minus fees 30 days after the invoice due date, regardless of whether your customer has paid the invoice or not. NOWaccount remains invisible throughout the process. You will receive a bank account number and mailing address in your business’ name, and your customer can continue to make payment under your business’ name.
None. There’s a simple 1-page application form. Once you’re approved, NOWaccount will give you a bank form where you specify where you want your funds to be deposited and a merchant agreement.
NOWaccount is a payment solution for businesses that invoice commercial and government customers. Instead of waiting weeks or months to receive your money, you can use NOWaccount to get paid right away. NOWaccount was established 5 years ago, and reputable companies, such as Coca Cola and the Metro Atlanta Rapid Transit Authority, recommend NOWaccount to their suppliers.
NOWaccount is different from traditional invoice factors in three main ways:
- Lower cost. Instead of weekly or monthly interest charges, NOWaccount charges a flat fee equal to 2.5 – 3 % of the invoice based on its due date. This is the same or less than you would pay in merchant card processing fees if your customer paid you by credit card. Also, NOWaccount is not tied to your customer paying the invoice. You get paid 90 % of the invoice up front, and regardless of whether your customer has paid, you get the remaining minus fees 30 days after the invoice is due.
- No client contact. You continue to send your invoice to your customer, but with a new remittance address. NOWaccount will provide you with a new bank account number and P.O. Box. Your customers can continue to make the payment out to you and pay you by check or electronically (since NOWaccount has already paid you, they will take and retain the customer’s payment).
- Non-recourse. NOWaccount is a non-recourse payment solution. You will receive payment on your invoice regardless of whether or when your customer pays. If your customer doesn’t pay the invoice by the due date, NOWaccount may call your customer with a reminder and identify themselves as “accounts receivable.” They may also send a monthly statement in your business’ name. In essence, this saves you the money of hiring a bill collection staff. There are no late fees or interest penalties for your customer. If your customer eventually fails to pay the invoice for some reason, you are not responsible.
One downside to NOWaccount is that you have less control over which individual invoices you can sell. While you can choose which customers you want to put on your NOWaccount, all invoices from a particular customer are subject to the fee. In other words, you can’t choose to sell only some of a particular customer’s invoices but not others. You can remove a customer at any time, but then you cannot add them back for 12 months. While this lack of flexibility may be a problem for businesses that want to factor the occasional invoice, NOWaccount is designed for businesses that need a longer-term, more comprehensive solution.
The enrollment timeline is also longer for NOWaccount compared to BlueVine and Fundbox. Outside of the state of Georgia, where NOWaccount is based, it takes approximately 2 weeks to enroll. However, once enollment is complete, you receive payment on the invoices you submit within 5 business days.
Personal Credit Score: N/A. NOWaccount only checks your business credit score in determining whether you can qualify. Although the company would not tell us the minimum required score, they did say that about 65 % of businesses nationwide get approved. Most small businesses have a business credit score even if they are unaware of it. If you’re a new business and don’t have a business credit score, you can build up your score by opening a business bank account with a reporting financial institution or using a business credit card from a reporting financial institution for a few months.
Note: NOWaccount only checks your Equifax Business Failure Score. They do not check D&B scores or other business credit scores. The Equifax Business Failure Score is a score that is given to a business based on its payment history with lenders that report to the Small Business Financial Exchance (SBFE). Not all lenders report to SBFE. If you’d like to improve your Equifax Business Failure Score, you can get a business credit card or business line of credit from a bank that reports to the SBFE and pay the balance on time each month. Examples include Bank of America, Wells Fargo, Chase, Capital One, and American Express.
Years in Business: No minimum, though brand new businesses usually don’t have a business credit score.
Revenues: NOWaccount doesn’t require any financial data about your business. You obviously need to be making sales in order to use NOWaccount.
Industry Exclusions: No contingency sales, no consumer transactions (e.g. billing health insurance companies for medical services), and invoices must be for a completed product or service.
- B2B or B2Government company.
- Invoices must be due in 90 days or less.
- No recent bankruptcies, liens, or outstanding judgments.
- You must have a registered business (sole proprietorships and partnerships are ok, but they must have an EIN number)
Collateral Required? No.
Personal Guarantee Required? No. This is one of the stand-out benefits of NOWaccount. NOWaccount is a non-recourse payment solution, so if your customer doesn’t pay the invoice for some reason, you’re not on the hook and will still receive payment. BlueVine is a recourse factor — if your client does not pay the invoice, you are responsible for payment. Fundbox gives a loan (up to $25K) that you must pay back within 12 weeks. However, Fundbox doesn’t require a personal guarantee, so if you can’t pay back the loan, your personal assets aren’t at stake.
Cost & Fees
Upfront Fees: $50 one-time setup fee.
Servicing Fees: $35 monthly processing fee.
Is cost/interest rates variable? The fee varies based on whether you have a 30-day, 60-day, or 90-day invoice.
How Costs Work With NOWaccount
When you sell an unpaid invoice to NOWaccount, there are three main costs:
- A one-time enrollment fee of $50.
- A $35 monthly processing fee.
- A flat service fee based on the due date of the invoice:
- 2.5 % of the invoice amount for 30-day invoices
- 2.75 % of the invoice amount for 60-day invoices
- 3.00 % of the invoice amount for 90-day invoices
- There is a 1.00 % surcharge for invoices to international customers.
Compared to invoice factors such as BlueVine and Fundbox, NOWaccount is significantly less expensive. Even when you account for the enrollment fee and monthly processing fee along with the service fee, the cost of using NOWaccount costs about the same as accepting a credit card.
The money comes to you in two parts. For example, if you have a $100,000 NET 30 invoice, NOWaccount will send 90 % of that, or $90K, to your bank account within 5 business days. 30 days after the invoice due date, they will send you the remaining 10 % minus the 2.5 % service fee. NOWaccount remains invisible throughout the process. They assign your business a bank account number and PO box mailing address to use as the remittance address on invoices to your selected customers. Your customers can maintain their normal payment schedule and can continue to make payments in your business’ name.
If, for some reason, your customer doesn’t pay the invoice, that doesn’t affect you in any way. NOWaccount insures all their invoices against nonpayment by the customer, so you are not responsible.
The only downside to NOWaccount is that all incoming invoices from a selected customer go through your NOWaccount. In other words, if you send invoices every month to Bob’s Widgets, you can’t pick and choose which of those invoices to sell to NOWaccount. You have to pay the fee for the invoice total. However, you can remove a customer at any time, but then you cannot add the customer back for 12 months. The advantage of a service like BlueVine or Fundbox is that you can select which invoices to factor. This works well for businesses with an occasional need for working capital. NOWaccount is a better choice for businesses that want a long-term payment solution.
There is a simple one-page online application to get started with NOWaccount. It asks very basic information, such as your business name and address. They don’t ask you to provide any paperwork. You simply have to fill out a bank deposit form telling NOWaccount where to send you your money and a merchant agreement provided by NOWaccount.
Unfortunately, after filling out the paperwork and receiving approval, it can take awhile to complete enrollment before you receive initial funding. Currently, outside the state of Georgia, it takes about 2 weeks to enroll. While the enrollment process is ongoing, you can submit customers for pre-approval. However, you must wait to complete enrollment before you can begin submitting invoices for funding. Once your enrollment is complete, you can begin to receive invoice payments within 5 business days.
What documents need to be provided? None.
Do they need online access to any systems – Quickbooks, PayPal, bank accounts? No.
Is there a credit report pull? If so, at what point in the process? When you apply for NOWaccount, only your business credit score will be checked. NOWaccount checks only the Business Failure Score from Equifax, not D&B scores or other business credit scores. Your personal credit score is not checked.
Do they report to the credit bureaus? Yes, they report activity to Equifax. They will appear as a merchant service on your credit report, not as a lender. This can help improve your business credit, making it easier to get loans and credit from other sources in the future.
What is the minimum / maximum length of invoice? You can submit invoices with payment terms of up to NET 90.
What is the minimum / maximum size of the credit line? There is no minimum, and the maximum credit limit is $1 million.
Payment Methods & Schedule
Schedule of Payments: You don’t pay anything directly to NOWaccount. Once you submit an invoice, NOWaccount sends 90 % of the invoice to your account within 5 business days. 30 days after the invoice due date, they will send you the remaining 10 % after subtracting their service fee. You will be paid even if your customer doesn’t pay.
Payment Initiation: Not applicable.
Method of Payment: Your customer can continue to pay you electronically or through a paper check and continue to make payment out to your business. NOWaccount will give you a bank account/routing number or PO Box address to provide as the remittance address on your invoices.
Penalties for Missing Payments: NOWaccount is a non-recourse payment service, which means you are not responsible if your customer fails to pay the invoice.
What Happens on Pre-Payment? There is no cost savings if your client pays the invoice before the due date because the fee is flat rate and is not calculated on a weekly or monthly basis.
NOWaccount has phone and email support for borrowers and applicants.
US-based or International? US-based. NOWaccount is located in Atlanta, GA.
Support Hours: 9-5 Monday – Friday EST. The company said that emails are often responded to outside those hours.
Other Lending Products
Need some money for your business? Click here to get our FREE Guide:
How to Get a Small Business Loan.
The Bottom Line
NOWaccount is an excellent payment solution for businesses that invoice commercial and government customers. Using NOWaccount, you can get paid right away instead of waiting weeks or months to receive your money.
The flat fee makes NOWaccount a relatively affordable option. The cost is the same or less than you would pay in merchant card processing fees if you allowed your customer to pay you by credit card.
NOWaccount is largely invisible to your customers, and the best part is that it is non-recourse. This means that if your customer doesn’t pay the invoice for any reason, you’re not responsible.
On the downside, NOWaccount offers less flexibility and is slower to provide funding than Fundbox or BlueVine. All invoices to your selected customers are subject to the fee; you can’t choose to sell some of a particular customer’s invoices but not others. You can remove a customer at any time, but then you cannot add them back for 12 months. Despite this drawback, we think NOWaccount is still a great long-term solution for businesses that invoice their customers and need to fill in the gaps in cash flow.