The best accounts receivable financing companies will have a combination of low rates, high advance rates, and funding speeds as fast as three days or less. These companies should also have excellent customer service, be able to provide a large enough funding amount for your company’s needs, and allow for flexible repayment terms.
Here are our picks for the best accounts receivable financing companies:
- 1st Commercial Credit: Best overall combination of rates and terms
- FundThrough: Best for custom funding needs
- SBG Funding: Best for short-term financing and low rates
- Lendio: Best for multiple loan options
- Creditfy: Best for small funding amounts
- 1West: Best for businesses with bad credit
Best Accounts Receivable Companies At a Glance
Maximum Funding | Maximum Advance Rate | Starting Interest Rate | Times in Business Required | Funding Speed | |
---|---|---|---|---|---|
Provider | $10 million | 97% | 0.69% to 1.59% per month | None | 3 to 5 days |
Provider | Varies | 100% | 0.5% per week | 3 months | 24 hours |
Provider | $5 million | 90% | 0.25% per week | 6 months | 2 to 5 days |
Broker | $10 million | 90% | 3% per month | Not stated | 24 hours |
Broker | $2 million | Varies | 6.79% per month | 3 months | 24 hours |
Broker | $10 million | Varies | 5% per month | 2 years | 2 weeks |
As we share in our guide on accounts receivable (A/R) financing, you’ll find that an A/R loan is easier to get compared to traditional loans. This is because lenders will focus on your customer’s ability to pay its outstanding invoices, placing a much smaller emphasis on your own company’s qualifications or ability to pay debt.
1st Commercial Credit: Best Overall Combination of Rates and Terms
Rates & Terms | |
Starting Interest Rate | 0.69% to 1.59% per month |
Estimated APR | 8% to 20% |
Advance Rate | Up to 97% |
Funding Amount | $10,000 to $10 million |
Repayment Terms & Schedule | Repaid as customer pays invoices |
Origination or Maintenance Fees | None |
Prepayment Penalties | None |
Funding Speed | 3 to 5 business days |
Qualifications | |
Credit Score | Varies, but 600 is recommended |
Time in Business | None |
Annual Revenue | Varies |
Personal Guarantee | Required |
Why We Like 1st Commercial Credit
1st Commercial Credit offers an A/R financing product with low rates, low fees, and competitive terms to include large funding amounts and high advance rates. For these reasons, we selected it as the best overall provider.
It commonly works with staffing agencies, trucking companies, construction contractors, distributors, medical providers, and security guard companies. For businesses seeking less than $350,000 in funding, it offers a streamlined process requiring no financials as part of the approval process. Companies needing more than $350,000 will need to provide more financial information about their business, such as tax returns and bank statements.
Qualification requirements are flexible and are largely based on the number and type of your accounts receivable invoices. This provider states that it places little emphasis on your credit score during the approval process and can also work with startups and even those that have outstanding tax liens.
1st Commercial Credit has been in business for more than 20 years and has serviced more than 3,600 clients during that period. When you work with this provider, you’ll also get free invoicing software and a free uploading funding app. There are no upfront fees, and the initial setup of your accounts can be done in three to five days.
You can visit the 1st Commercial Credit website to learn more. There, you can also find the company’s phone number and submit an online request for a quote.
FundThrough: Best for Custom Funding Needs
Rates & Terms | |
Starting Interest Rate | 0.5% per week |
Estimated APR | 26% and up |
Advance Rate | Up to 100% |
Funding Amount | Varies |
Repayment Terms & Schedule | 12 weeks |
Origination or Maintenance Fees | None |
Prepayment Penalties | None |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | None |
Time in Business | 3 months recommended |
Annual Revenue | $15,000 monthly |
Personal Guarantee | Varies, but not typically required |
Why We Like FundThrough
FundThrough offers A/R financing under its FundThrough Express program. With it, the amount of funding you can get will vary depending on your specific invoices. However, it’s typically a more ideal fit for businesses that regularly invoice less than $15,000 to customers.
It’s possible to get approved for up to $100,000 with no customer verification through FundThrough Express, although additional documentation can be provided if you need more funding. To be eligible, you just need to be in business for at least three months and have at least $100,000 in outstanding invoices to a customer.
If you decide to use FundThrough, it’s recommended that you link your account with one of its preferred account software providers. These providers include QuickBooks Online, OpenInvoice, and Workbench.
Linking accounts will allow FundThrough to more accurately assess a funding limit based on your specific invoices and transactions. If you decide not to link accounts, or if you do not use one of the preferred accounting software providers, you still can upload invoices manually. Visit the FundThrough website to apply or to learn more.
SBG Funding: Best for Short-term Financing and Low Rates
Rates & Terms | |
Starting Interest Rate | 0.25% per week |
Estimated APR | 18% and up |
Advance Rate | Up to 90% |
Funding Amount | Up to $5 million |
Repayment Terms & Schedule | Weekly and monthly |
Origination or Maintenance Fees | Not stated |
Prepayment Penalties | None |
Funding Speed | Typically 2 to 5 days |
Qualifications | |
Credit Score | 500 |
Time in Business | 6 months |
Annual Revenue | $250,000 annually |
Personal Guarantee | May be required |
Why We Like SBG Funding
SBG Funding charges rates as low as 0.25% per week, which is based on an average fixed monthly figure. While this may make it more expensive compared to other companies over the long term, businesses that expect to pay off the balance in under one month may end up saving money, as other companies may charge a minimum of 0.55% per month or more.
This provider has easy qualification requirements and backs it up with a high loan approval rate. You can get approved with a credit score as low as 500, and as little as six months’ time in business. SBG Funding states that it approves 85% of its applicants.
It does not perform a hard credit pull at any point during the loan process, so you can apply to view your funding options without negatively impacting your credit score. There is also no obligation to accept a loan offer.
To apply, you can visit the SBG Funding website. Online applications can be completed in under 10 minutes and require just a few items. You’ll need four months of business bank statements, a copy of the invoices you’re looking to finance, a copy of your driver’s license, and a voided check showing your business bank account information.
Lendio: Best for Multiple Loan Options
Rates & Terms | |
Starting Interest Rate | 3% |
Estimated APR | Varies |
Advance Rate | Up to 90% |
Funding Amount | Up to $10 million |
Repayment Terms & Schedule | Up to 12 months |
Origination or Maintenance Fees | None |
Prepayment Penalties | None |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | Not stated, but 620 is recommended |
Time in Business | Not stated, but 12 months is recommended |
Annual Revenue | $120,000 annually |
Personal Guarantee | Not stated |
Why We Like Lendio
Lendio is a loan broker with over 75 lenders in its network, and you’ll be paired with a loan specialist who will match you with a lender best suited for your needs. This can save you time and money from having to apply separately to multiple lenders while also giving you the best chances of getting approved at the best rates and terms.
One of the downsides of working with a loan broker, however, is that you may not know the exact qualification requirements or loan terms until after you apply. You may also have less flexibility in getting approved if you happen to be outside a lender’s standard approval guidelines.
Lendio’s maximum funding amount is tied to your receivables. You can get up to 90% advanced to you, with rates as low as 3%. Unfortunately, it does not disclose minimum requirements for credit score or time in business. Those items will often be determined by the lender you’re paired with.
If you visit Lendio’s website, you can complete an online application in under 15 minutes. If any initial requested documentation is requested, be sure to provide it as quickly as possible, as your application will not be considered complete until that is done. After receiving a completed application, you can expect to receive a phone call from a Lendio funding manager within several business hours.
Creditfy: Best for Small Funding Amounts
Rates & Terms | |
Starting Interest Rate | 6.79% |
Estimated APR | 7% and up |
Advance Rate | Varies |
Funding Amount | Up to $2 million |
Repayment Terms & Schedule | 1 to 2 years |
Origination or Maintenance Fees | Not stated |
Prepayment Penalties | None |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | 530 |
Time in Business | 3 months |
Annual Revenue | $120,000 annually |
Personal Guarantee | Not stated |
Why We Like Creditfy
With a maximum funding amount of $2 million, Creditfy is a good option for businesses that don’t need large amounts of funding. While its rates are higher than the other providers in our guide, you should have an easier time getting approved as Creditfy boasts an approval rate of 90%.
Like Lendio, Creditfy is a business loan broker. However, it has exclusive partnerships with certain lenders, something that can improve your approval odds and potentially give you more favorable rates and terms. Working with Creditfy means you’ll be paired with a loan specialist to match you with a loan and lender best suited for your needs. Loan specialists are required to have a minimum of two years of industry experience to give you the best level of service.
If A/R financing is not right for you, also consider its other products, which include Small Business Administration (SBA) loans, bridge loans, term loans, and equipment financing. To learn more or to apply, visit the Creditfy website. Applications can be completed in under five minutes, with no negative impact on your credit score.
1West: Best for Businesses With Bad Credit
Rates & Terms | |
Starting Interest Rate | 5% |
Estimated APR | Varies |
Advance Rate | Varies |
Funding Amount | $10,000 to $10 million |
Repayment Terms & Schedule | Varies |
Origination or Maintenance Fees | Not stated |
Prepayment Penalties | Not stated |
Funding Speed | 2 weeks |
Qualifications | |
Credit Score | None |
Time in Business | 2 years |
Annual Revenue | Varies |
Personal Guarantee | Not stated |
Why We Like 1West
With no minimum credit score requirement, 1West is an excellent option if you have blemishes on your credit report. Annual revenue requirements vary, but 1West does require your business to be stable or demonstrate a growth in income.
Its unique aspect is that its A/R financing product can be structured as a line of credit. It allows for payment terms of net 30 to 120 days. Businesses well-suited for this provider’s A/R financing typically include those who have high payroll needs, have experienced fast growth, and have supplier payments and are in need of funding to help with cash flow.
One downside, however, is that getting funding from 1West can take up to two weeks, which is among the longest in our list of A/R financing companies. As a result, it’s not a good fit if you need funding quickly. Most other lenders on our list can provide funding as soon as 24 hours. To speed up the length of time it takes to get funded, you can have the following items ready to send:
- Business debt schedule
- Two years of business tax returns
- Accounts receivable list
- Year-to-date (YTD) profit and loss (P&L) statement
- YTD balance sheet
To apply, head over to the 1West website.
How We Chose the Best Accounts Receivable Financing Companies
We considered the following characteristics in selecting the best accounts receivable financing companies:
- Rates, fees, and estimated annual percentage rates (APRs)
- Maximum advance rates
- Qualification requirements such as credit score, time in business, and revenue
- Approval and funding speeds
- Funding amounts
- Customer reviews and ratings
Alternatives to Accounts Receivable Financing
A/R financing may not be the best option for everyone. If you’re having trouble getting approved, check out our guide on how to get a small business loan for tips on improving your approval odds. There are also other financing options available that charge fewer fees. Here are some alternatives you can consider:
- Invoice factoring: With invoice factoring, it’s possible to get larger funding amounts at lower rates. Factoring shares some similarities to A/R financing, but a key difference is that customers pay a factoring company rather than your own business. Check out our top-recommended invoice factoring companies for options.
- Working capital loans: Working capital loans allow funds to be used to cover almost any daily business expense. Common examples include rent, payroll, and other operational costs. Working capital loans tend to have longer repayment terms than A/R financing, so you can borrow more with lower minimum payments. See our picks for the leading working capital loans to find a lender suited to your business needs.
- Small business line of credit: A credit line allows you to draw funds on an as-needed basis to cover costs associated with recurring or unexpected expenses. As you pay down your balance, you can draw additional funds up to your credit limit. We’ve compiled a list of the best small business lines of credit to help you find a provider or broker that fits the bill.
Frequently Asked Questions (FAQs)
Accounts receivable allows you to borrow against the invoices you have sent to clients but have not yet received payment for. Invoices commonly allow for 30 to 90 days before being considered delinquent, so this type of financing can help with short-term cash flow issues.
With A/R financing, a lender will issue you a percentage of your outstanding invoice amount. You will then pay a weekly or monthly fee in exchange for receiving funds. Once your customer issues your payment in full for the outstanding invoice, you can then pay the A/R financing company to satisfy the loan balance.
No. With A/R financing, your business collects payment directly from your customer. With invoice factoring, the collection of payments is handled directly by the factoring company.
Bottom Line
If you have issued invoices to customers but have not yet received payment, A/R financing can get you the funding you need. The best accounts receivable financing companies we’ve selected offer a combination of large loan amounts with low rates and flexible repayment terms. If you’re unable to find a suitable choice, consider some of the alternatives we’ve mentioned.