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 for rates and terms
- FundThrough: Best for tailored funding needs
- SBG Funding: Best for short-term financing and low rates
- Clarify Capital: Best for personalized service
- Creditfy: Best for small funding amounts
- Lendio: Best for multiple loan options
- 1West: Best digital lending process for established businesses
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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% | 2.75% for the first 30 days | 3 months | 24 hours |
Provider | $5 million | 90% | 0.25% per week | 6 months | 2 to 5 days |
Broker | Varies | Varies | 0.5% to 5% of invoice amount | Not stated | As fast as same-day |
Broker | $2 million | Varies | 6.79% per month | 3 months | 24 hours |
Broker | $10 million | 90% | 3% per month | 24 hours | |
Broker | $10 million | Varies | 5% per month | 2 years | 2 weeks |
As we share in our guide on accounts receivable 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 for Rates and Terms
Rates and 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 and 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
With 1st Commercial Credit, you can get some of the most competitive rates and terms on our list. It also charges no upfront fees, provides the ability to qualify without the need to provide any financials for funding up to $350,000, and offers customers free invoicing software and an uploading funding app.
The lender groups its accounts receivable financing program into three categories. You can select from its invoice factoring, accounts receivable loan, and asset-based lending programs. Each is structured differently, and you can select the one that best suits your needs. If you’re unsure which to choose, you can speak with a 1st Commercial Credit representative who can guide you through the process and give you a no-obligation quote.
In addition to accounts receivable financing, it has programs for equipment financing, purchase order financing, trade payable financing, and more.
Visit the 1st Commercial Credit website to apply or learn more about its products.
FundThrough: Best for Tailored Funding Needs
Rates and Terms | |
Starting Interest Rate | 2.75% for the first 30 days |
Estimated APR | 26% and up |
Advance Rate | Up to 100% |
Funding Amount | Varies |
Repayment Terms and 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 is one of few providers that can not only advance up to 100% of the value of your accounts receivables, but it can also issue unlimited funding if your business and transaction details meet the eligibility criteria. The fee structure is also simple, as FundThrough charges just a single flat fee for funding.
Its accounts receivable program works best if you link it with your accounting software. FundThrough supports QuickBooks and OpenInvoice, but you can also upload invoices manually if you don’t use either. Once linked, you have the flexibility of choosing which invoices you’d like to get funded.
The details of your business and the invoices you’d like to get funded will determine your funding limit. FundThrough utilizes a combination of its own tech-driven platform, artificial intelligence, and your accounting software to determine your eligibility.
To learn more or to apply, head to the FundThrough website.
SBG Funding: Best for Short-term Financing and Low Rates
Rates and Terms | |
Starting Interest Rate | 0.25% per week (average fixed monthly percentage) |
Estimated APR | 18% and up |
Advance Rate | Up to 90% |
Funding Amount | Up to $5 million |
Repayment Terms and Schedule | Weekly and monthly |
Origination or Maintenance Fees | Not stated |
Prepayment Penalties | None |
Funding Speed | Typically 2 to 5 days |
Qualifications | |
Credit Score | 600 |
Time in Business | 6 months |
Annual Revenue | $350,000 annually |
Personal Guarantee | May be required |
Why We Like SBG Funding
For businesses that only need funding for several weeks at a time, SBG Funding can offer some of the lowest rates in our guide. That said, those seeking funding for months at a time may be able to get better pricing elsewhere.
SBG Funding states that it has an approval rate of 85%. However, borrowers should be aware that meeting the minimum qualification requirements does not guarantee approval. Rather, businesses that are weak in any area should be prepared to provide compensating factors to improve the odds of landing approval.
The lender offers a simple online application process that can be completed in minutes. Approvals can then be issued in as little as 24 hours. If the terms are acceptable, you can receive funds within several days. Check out the SBG Funding website to apply or learn more. Applying will not negatively impact your credit score, and there is no obligation to accept a loan offer.
Clarify Capital: Best for Personalized Service
Rates and Terms | |
Starting Interest Rate | 0.5% to 5% of the invoice amount |
Estimated APR | Varies |
Advance Rate | Varies |
Funding Amount | Varies |
Repayment Terms and Schedule | Not stated |
Origination or Maintenance Fees | Not stated |
Prepayment Penalties | Not stated |
Funding Speed | As fast as same-day |
Qualifications | |
Credit Score | None |
Time in Business | Not stated |
Annual Revenue | Not stated |
Personal Guarantee | May be required |
Why We Like Clarify Capital
Borrowers who choose to work with Clarify Capital will be assigned a dedicated funding advisor who can walk you through the lending process. This can include getting personalized guidance on the best type of financing for your company’s needs and assistance with completing loan paperwork.
Clarify Capital is a business loan broker with over 75 lenders in its network. As a borrower, you’ll benefit from this because you’ll have more opportunities to get approved at the best rates. Your funding advisor will narrow down the list of financing options and match you with lenders best suited for your circumstances.
If invoice financing is not the right fit, you can consider some of the company’s other loan programs. These include term loans, credit lines, SBA loans, equipment financing, invoice factoring, and merchant cash advances.
To apply or learn more, visit the Clarify Capital website.
Creditfy: Best for Small Funding Amounts
Rates and Terms | |
Starting Interest Rate | 6.79% per month |
Estimated APR | 7% and up |
Advance Rate | Varies |
Funding Amount | Up to $2 million |
Repayment Terms and 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 lenders 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, consider its other products, which include 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.
Lendio: Best for Multiple Loan Options
Rates and Terms | |
Starting Interest Rate | 3% per month |
Estimated APR | Varies |
Advance Rate | Typically up to 90% |
Funding Amount | Up to $10 million |
Repayment Terms and 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 providers 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. Unfortunately, the broker does not disclose minimum requirements for credit score or time in business. Those items will often be determined by the provider you’re paired with.
If you visit Lendio’s website, you can complete an online application in under 15 minutes. If any initial 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 a phone call from a Lendio funding manager within several business hours.
1West: Best Digital Lending Process for Established Businesses
Rates and Terms | |
Starting Interest Rate | 5% |
Estimated APR | Varies |
Advance Rate | Varies |
Funding Amount | $10,000 to $10 million |
Repayment Terms and 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
Although 1West has the longest time in business requirement in our guide, it allows you to get funding without the need to speak with a loan officer or lending representative. It makes this possible with its Automated Business Lending Engine (ABLE), which can be used 24/7 to match you with the best financing options in its network of over 50 lenders.
One of the downsides of 1West is that it has the slowest funding speed out of all the lenders we selected, so it’s a better option for companies that are not in a rush to get funds. Required paperwork also tends to be more comprehensive, as you’ll need to provide two years of business tax returns, year-to-date financial statements, a business debt schedule, and an accounts receivable report.
To apply, head over to the 1West website. The broker also provides other lending products such as working capital loans, real estate financing, SBA loans, equipment financing, and business credit lines.
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 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 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 be used to 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 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.