6 Best Accounts Receivable Financing Companies for 2023
This article is part of a larger series on Business Financing.
The best accounts receivable (A/R) financing companies can issue funding of at least 90% of your unpaid invoices. They will have a combination of low rates, fast funding speeds, and large funding amounts. Some may also have flexibility to vary the maximum funding amount based on the number of eligible invoices you have.
Here are our six picks for the best accounts receivable financing companies for 2023:
Best Providers for Accounts Receivable Financing
- 1st Commercial Credit: Best overall for terms and rates
- Universal Funding: Best for startups and large funding amounts
- FundThrough: Best for smaller funding needs
Best Brokers for Accounts Receivable Financing
- SBG Funding: Best broker for quick repayments and low rates
- Creditfy: Best for long repayment terms
- Lendio: Best loan broker for multiple options
Best Accounts Receivable Companies At a Glance
Maximum Funding | Maximum Advance Rate | Starting Interest Rate | Estimated Annual Percentage Rate (APR) | Funding Speed | |
|---|---|---|---|---|---|
 Provider | $10 million | 97% | 0.69% per month | 8% | 3 to 5 days |
 Provider | $20 million | 95% | 0.55% per month | 8% | 24 hours |
 Provider | $2 million | 100% | 0.5% per week | 26% | 24 hours |
 Broker | $5 million | 90% | 0.25% per week | 18% | 2 to 5 days |
 Broker | $2 million | Varies | 6.79% | 8% | 24 to 48 hours |
 Broker | Varies | 90% | 3% | 6% | 24 hours |
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: Overall Best Provider for Terms & Rates
| |
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 pay invoices |
Origination or Maintenance Fees | None |
Prepayment Penalties | None |
Funding Speed | 3 to 5 business days |
Type of Factoring | Recourse |
Qualifications | |
Credit Score | Varies but 600 is recommended |
Time in Business | 3 months |
Annual Revenue | Varies |
Personal Guarantee | Required |
Why We Like 1st Commercial Credit
1st Commercial Credit is our pick as the best overall A/R financing company because it has the most competitive combination of rates and loan terms. While other companies may be better in certain categories, 1st Commercial Credit can offer attractive terms across the board.
You can get as much as $10 million in funding on up to 97% of eligible invoices, and rates start as low as 0.69% per month for well-qualified borrowers. Requirements for credit score and revenue can vary depending on other details of your loan application, such as the type and creditworthiness of your customers, and amount of the outstanding invoices.
If you need less than $350,000 in funding, it’s possible for you to qualify for a streamlined application process requiring little to no financial documentation. Otherwise, the provider will typically need to see financial statements, such as copies of outstanding invoices, purchase orders, or an A/R aging report.
One potential downside is that 1st Commercial Credit states that account setup can typically be done in 3 to 5 business days, which is one of the slowest funding speeds in our guide. To apply or to learn more, you can visit the provider’s website.
Universal Funding: Best for Startups & Large Funding Amounts
| |
Rates & Terms | |
Starting Interest Rate | 0.55% to 2% per month |
Estimated APR | 8% and up |
Advance Rate | Up to 95% |
Funding Amount | $25,000 to $20 million |
Repayment Terms & Schedule | Up to 90 days |
Origination or Maintenance Fees |
|
Prepayment Penalties | None |
Funding Speed | As fast as 24 hours |
Type of Factoring | Recourse |
Qualifications | |
Credit Score | None |
Time in Business | None |
Annual Revenue | None |
Personal Guarantee | May be required |
Why We Like Universal Funding
Universal Funding offers up to $20 million in funding and is the only company on our list with no minimum requirement for time in business. This makes it a good option if you’re a newer business needing large amounts of funding. It also has no minimums for credit score or annual revenue.
In addition to being startup-friendly, Universal Funding offers competitive rates, terms, and fast funding speeds. Loans must typically be repaid within 90 days, which is consistent with most other providers of A/R financing.
Like the other providers in our guide, Universal Funding offers recourse financing. This means that you are responsible for the balance even if your customer is unable to pay you. However, Universal Funding does offer A/R insurance, which can help protect you in the event your customer defaults on the invoice.
To get the process started, you can head over to the Universal Funding website to request a call back with more information on next steps.
FundThrough: Best for Smaller Funding Needs
| |
Rates & Terms | |
Starting Interest Rate | 0.5% per week |
Estimated APR | 26% and up |
Advance Rate | Up to 100% |
Funding Amount | $500 to over $2 million |
Repayment Terms & Schedule | 12 weeks |
Origination or Maintenance Fees | None |
Prepayment Penalties | None |
Funding Speed | Within 24 hours of application |
Type of Factoring | Recourse |
Qualifications | |
Credit Score | None |
Time in Business | 3 months recommended |
Annual Revenue | Varies |
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, 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 Broker for Quick Repayments & Low Rates
| |
Rates & Terms | |
Starting Interest Rate | 0.25% per week |
Estimated APR | 18% and up |
Advance Rate | Up to 90% of eligible receivables |
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 |
Type of Factoring | Recourse |
Qualifications | |
Credit Score | 500 |
Time in Business | 6 months |
Annual Revenue | $250,000 |
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 broker 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 the company can work with startups with 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.
Creditfy: Best for Long Repayment Terms
| |
Rates & Terms | |
Starting Interest Rate | 6.79% |
Estimated APR | 8% |
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 | 24 to 48 hours |
Type of Factoring | Recourse |
Qualifications | |
Credit Score | 530 |
Time in Business | 3 months |
Annual Revenue | $120,000 |
Personal Guarantee | May be required |
Why We Like Creditfy
Creditfy’s A/R financing product, which is found under the invoice financing section on its website, offers repayment terms of up to two years. That’s the longest period on our list, making it an excellent choice if you’re looking for as much time as possible to pay the balance in full.
Creditfy also offers easy qualification requirements and competitive rates. It has a 90% loan approval rate, so you should have good odds of approval if you meet the minimum eligibility criteria listed above.
To apply, you can head over to the Creditfy website, where an online application can be completed in under 5 minutes. After submitting an application, you can expect to hear back from a loan advisor within several business hours to review your loan options and better understand your business needs. If loan terms are acceptable to you, funds can be disbursed as quickly as 24 to 48 hours.
Lendio: Best Loan Broker for Multiple Options
| |
Rates & Terms | |
Starting Interest Rate | 3% |
Estimated APR | 6% and up |
Advance Rate | Up to 90% |
Funding Amount | Varies |
Repayment Terms & Schedule | Up to 1 year |
Origination or Maintenance Fees | None |
Prepayment Penalties | None |
Funding Speed | As fast as 24 hours from application |
Type of Factoring | Recourse |
Qualifications | |
Credit Score | Varies but 620 is recommended |
Time in Business | Varies but 6 months is recommended |
Annual Revenue | Varies but $96,000 annually is recommended |
Personal Guarantee | Varies but may be required |
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, time in business, or revenue. 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.
How We Chose the Best Accounts Receivable Financing Companies
We used the following criteria in selecting the best A/R financing companies:
- Interest rates and estimated APRs
- Maximum advance rates
- Amount of funding offered
- Application, approval, and funding speeds
- Qualification requirements such as credit score, time in business, and revenue
- Loan fees, including origination or prepayment expenses
- 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 for 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)
How do accounts receivable loans work?
Accounts receivable loans allow businesses to address short-term cash flow gaps by borrowing against their unpaid invoices. The lender typically collects the invoice on behalf of the business and uses the proceeds to repay the loan. Unlike invoice factoring, customers are largely unaware of the third-party financing company.
What is an account receivable loan?
Accounts receivable loans are lending products where providers will advance up to 100% of the unpaid invoice amount to a business to help them with short-term cash flow. When the invoice is paid, the loan is paid off.
How do you borrow against accounts receivable?
Unpaid invoices are leveraged as collateral to a financing company, which will advance up to 100% of the invoice to allow the company to cover short-term costs. The loan is paid off once the invoice is paid.
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.
