Accounts receivable (A/R) financing companies can provide fast, affordable funding to smooth out a small business’s cash flow or provide access to short-term working capital. A/R financing is based on the value of outstanding receivables. We reviewed more than 20 invoice financing companies and selected the six best.
Best A/R Financing Companies
Loan Amount | Advance Rate | Starting Discount Rate | |
---|---|---|---|
$5 million | 90% | 0.25% per week | |
$250,000 | 85% | 1% per month | |
$10 million | 90% | 1.25% per 30 days | |
$5 million | 90% | 1% per month | |
$7.5 million | 90% | Customized |
*Last Updated: January 2021
How We Evaluated A/R Financing Companies
We considered a broad range of A/R financing companies to identify the six best providers of working capital. In establishing our review criteria, we considered the pain points we’ve heard small businesses express. This includes such things as how much business owners can borrow, how quickly they can access the needed funds, and how difficult it is to qualify for receivables financing.
BlueVine: Best Overall A/R Financing Company
BlueVine is a great option for businesses needing to borrow up to $5 million in receivables financing. Advance rates range from 85% to 90% with a discount rate starting as low as 0.25% and, unlike some of the other invoice financing companies, BlueVine won’t communicate with a borrower’s customers. BlueVine also offers a small business line of credit and short-term business loans.
BlueVine A/R Financing Costs
- Discount rate: Starting at 0.25% per week
- Expected APR: 15% to 70%
- Origination or maintenance fees: None
- Prepayment penalties or termination fees: None
- Additional fees: $15 wire fee; automated clearing house (ACH) is free
At 0.25% per week, BlueVine’s lowest available discount rate makes it potentially more affordable than accounts receivable financing through a fixed fee provider.
BlueVine A/R Financing Terms
- Funding amount: $5,000 to $5 million
- Advance rate: Typically up to 85% to 90%
- Repayment terms & schedule: Advances are repaid as customers pay their invoices
- Personal guarantee: Required from all business owners
- Speed to funding: 10 minutes to apply with a decision and funding as soon as the next day; ongoing funding the next day is free via an ACH; same day is $15 via a wire
BlueVine offers a fully electronic application system. It’s quick for business owners to approved and usually takes less than 10 minutes. Businesses that don’t use QuickBooks, Xero, or FreshBooks, may need to wait longer to receive approval.
BlueVine Receivables Financing Additional Features
- Customer interaction: None
- Type of invoice financing agreement: Recourse
While BlueVine requires customers to pay the invoice directly to a bank account set up in the business name, it will not communicate with a borrower’s customers directly. With BlueVine, business owners will be given the option of self-paying the invoice or be enrolled in an installment repayment plan.
BlueVine Accounts Receivable Financing Minimum Qualifications
- Credit score: At least 530
- Time in business: At least three months
- Annual revenue: At least $100,000
BlueVine is looking for its borrowers to meet its credit criteria and have creditworthy business-to-business (B2B) or business-to-government (B2G) customers. BlueVine also has a line of credit option available for small businesses with B2C customers.
What BlueVine Invoice Financing Is Missing
One drawback to BlueVine is that the business owner needs to have a 530 or higher credit score, which is not a requirement for most of the other providers on our list. The minimum score BlueVine requires is still low, meaning this drawback will impact only a few A/R financing borrowers.
What Users Think About BlueVine Accounts Receivable Loan
Customers who recommended BlueVine were impressed with its responsive customer support team. Customers also liked that BlueVine discloses all of its rates and fees. Some users weren’t happy that they were denied funding.
How to Apply for A/R Financing With BlueVine
Business owners can apply for A/R financing with BlueVine via its online application in 10 minutes or less. Funding is as soon as the next day. The total time from the start of the application to funding is one to three business days. BlueVine’s application process is one of the simplest we reviewed.Business owners connect BlueVine to accounting or invoicing software for review. Once approved, applicants can select the invoices they wish to finance and receive funding the next business day.
Payability: Best A/R Financing Company for Ecommerce & Amazon Sellers
With APRs ranging from 12% to 40%, Payability is a good option for ecommerce businesses who sell on marketplaces like Amazon and Walmart. With Payability, ecommerce businesses can borrow against future or daily marketplace A/R. The number of marketplaces Payability can serve continues to increase, meaning more businesses can use this service.
Payability Accounts Receivable Loan Costs
- Discount rate:
- Daily invoices: Flat monthly rate starting at 1% to 2% of gross sales
- Future invoices: Flat weekly fee starting as low as 0.75% of future receivables
- Expected APR: 12% to 40%
- Prepayment penalties or termination fees: None
- Additional fees: None
If Payability advances against future receivables and collects sooner than expected, it will provide business owners with a rebate equal to the number of weeks early the collection occurred. As an example, if a $100,000 invoice is repaid four weeks early, then the rebate would equal $3,000 or $750 for each week times four.
Payability A/R Financing Terms:
- Funding amount:
- Daily invoices: No maximum; minimum advance is $100
- Future invoices: Typically from $3,000 to $250,000; larger limits may be considered with additional approval
- Advance rate:
- Daily invoices: Up to 80%
- Future invoices: ~ 80% or 85%
- Repayment terms & schedule: Repaid as marketplace invoices are paid
- Personal guarantee: Likely required
- Speed to funding: Minutes to apply with a decision and funding within 24 hours
Payability offers the lowest minimum advance amount of $100. Most other providers require business owners to finance a greater amount than this.
Payability Receivables Financing Additional Features
- Customer interaction: Collection of receivables from an ecommerce marketplace
- Assignment of invoices: Required
Payability helps business owners with the collection of ecommerce marketplace A/R, daily or future. Depending on the A/R financing product business owners select, they’ll either borrow against daily receivables or future marketplace receivables. Unlike other A/R financing options where customers make payments to the provider, the customer payments will still process through an ecommerce account with Payability.
Payability Accounts Receivable Loan Minimum Qualifications
- Credit score: Not a factor
- Time in business:
- Daily invoices: At least 90 days of sales history
- Future invoices: At least six months of consistent sales history
- Annual revenue:
- Daily invoices: $2,000 per month in sales
- Future invoices: $5,000 per month in sales on multiple items
When qualifying applicants for A/R financing, Payability cares most about the performance of an ecommerce marketplace like Amazon, Walmart, or Etsy. Payability’s qualifications are focused on the marketplace sales volume and history. Besides sales history and volume, business owners must have good account health.
What Payability Invoice Financing Is Missing
The downside to Payability is that it’s only available to ecommerce marketplace sellers. However, given the growth in the ecommerce business, it’s a great niche product if the business fits the target profile. Plus, Payability keeps adding additional marketplaces where its financing is available.
What Users Think About Receivables Financing With Payability
Users who gave Payability a positive review like that they can get their marketplace funds immediately. There weren’t many negative reviews for Payability, but some users experienced some miscommunication regarding how much it charges for its services.
How to Apply for Receivables Lending With Payability
Business owners can apply for A/R financing with Payability online in minutes. The primary step they must complete is connecting Payability with a marketplace account like Walmart or Amazon. If approved, funding is available as soon as the next business day.
eCapital: Best Nonrecourse A/R Financing Company
eCapital is great for businesses that want nonrecourse A/R financing. It’s also good for businesses with credit issues and can even help businesses with tax or legal issues. eCapital lets business owners select specific invoices to advance against, and rates are competitive, ranging from 16% to 30% APR. As a bonus, it also offers purchase order (PO) financing to business owners that need cash to fill orders.
eCapital Accounts Receivable Financing Costs
- Discount rate: 1.25% to 2% per 30 days
- Expected APR: 16% to 30%
- Origination fee: Small, one-time due diligence fee when accepting a financing offer
- Additional fees: Any additional fees will be disclosed in the A/R financing agreement
Unlike BlueVine, the discount rate charged by eCapital includes credit protection and A/R management services. This is a value-added service that may be beneficial for small companies.
eCapital A/R Financing Terms
- Funding amount: $25,000 to $10 million
- Advance rate: ~ 80% to 90%
- Repayment terms & schedule: Repaid as invoices are paid
- Personal guarantee: Most likely not required
- Speed to funding: Three to 10 business days
eCapitaloffers accounts receivable financing of up to $10 million, which is the highest amount provided by any of the providers we have reviewed here. The next highest amount available is $7.5 million offered by Crestmark.
eCapital Receivables Financing Additional Features
- Customer interaction: Required
- Assignment of invoices: Required
- Type of invoice financing agreement: Recourse and nonrecourse
Unlike providers like BlueVine and Payability, eCapital is purchasing invoices, so business owners can expect them to interact with customers. It doesn’t, however, act like a collection agency, so it cares about making sure customers are treated well. As the company is well-established, many customers are accustomed to making payments to eCapital.
eCapital A/R Financing Minimum Qualifications
- Credit score: Not a factor; credit problems OK, including slow-paying customers, IRS issues, and payroll problems
- Time in business: Not a factor
- Annual revenue: At least $30,000 in invoices per month
Paragon does not have a defined minimum credit score requirement. However, unlike most of the providers we have reviewed, Paragon will work with businesses that have more serious credit problems like IRS issues.
What eCapital Invoice Financing Is Missing
One drawback to eCapital is that it is purchasing the A/R, unlike BlueVine. However, it can work with customers with significant credit problems, which is a benefit.
What Users Think About A/R Financing With eCapital
Users who recommend eCapital were impressed with the responsive customer support team. Customers also said that the invoice factoring company has helped them solve cash flow problems. No negative reviews were found at the time this article was written.
How to Apply for Accounts Receivable Financing With eCapital
Business owners apply to eCapital electronically. In addition, applicants must provide their most recent A/R aging report, accounts payable aging report, a customer list and a sample invoice. Once this is done, an assigned Paragon representative will work with the business to develop a receivables financing solution. The entire process typically takes three to 10 business days.
Harper Partners: Best Recourse Accounts Receivable Financing Company
The A/R financing product offered by Harper Partners is good for businesses who want recourse factoring. Harper Partners offers advance rates up to 90% on a recourse basis, meaning borrowers are responsible if customers don’t pay. Plus, Harper Partners offers up to $400,000 in working capital financing, with rates ranging from 15% to 45% APR, for borrowers with bad credit, which is a bonus.
Harper Partners A/R Financing Costs
- Discount rate: 1% to 3% per month
- Expected APR: 15% to 45%
- Origination fee: A small one-time fee is possible
- Additional fees: None
Harper Partners’ fees are in line with other providers that offer the option of nonrecourse accounts receivable financing. While their upper limit of 3% exceeds eCapital’s upper limit of 2%, Harper Partners offers borrowers the choice of recourse or nonrecourse financing. Overall, both Harper Partners and Paragon have very similar fee structures, and comparable expected APRs.
Harper Partners A/R Financing Terms
- Funding amount: $50,000 to $5 million
- Advance rate: Up to 90%
- Repayment terms & schedule: Repaid as invoices are paid
- Personal guarantee: Possible
- Speed to funding: Two to five business days
Harper Partners requires a minimum of $50,000 in accounts receivables per month be financed, which is the highest minimum requirement of any of the providers on our list. eCapital is the second highest, requiring $25,000 per month. Harper Partners works with startup businesses and those that have had recent financial troubles, making it a good option for businesses that may not qualify for traditional financing.
Harper Partners Receivables Financing Additional Features
- Customer interaction: Available upon request
- Assignment of invoices: Required
- Type of invoice financing agreement: Recourse is standard; nonrecourse possible with a higher discount rate and lower advance rate
Harper Partners will only contact customers if borrowers want them to do so. It will send invoices in the business. If customers are paying slowly, and it comes time to collect, Harper Partners is available to support business owners through polite customer service representatives. It directs all invoice payments to an account in the business name.
Harper Partners A/R Financing Minimum Qualifications
- Credit score: Not a factor, but must not have a history of serious legal or tax issues
- Time in business: Not a factor
- Annual revenue: At least $50,000 in invoices per month
Similar to BlueVine, to qualify, applicants must work with business-to-business (B2B) or business-to-government (B2G) customers. The invoices must be due and payable within 90 days and not pledged to another lender. Unlike some other providers, a credit score is not a factor for Harper Partners. However, Harper Partners does not fund businesses with serious legal issues. If a business has legal troubles, Paragon may be a good fit.
What Harper Partners Invoice Financing Is Missing
Harper Partners does not require a minimum credit score. However, unlike eCapital, it cannot work with the business if it has a history of serious tax or legal issues. If this is the situation, then a company like Paragon Financial may help.
What Users Think About Accounts Receivable Financing With Harper Partners
We considered user reviews from around the web and determined that there are too few customer reviews of Harper Partners because it is a relatively new company. We expect that businesses will like the transparency that appears to be offered by this company. A drawback might be that it doesn’t offer factoring to businesses with a history of serious tax or legal issues.
How to Apply for A/R Financing With Harper Partners
Business owners apply to Harper Partners electronically. Harper Partners takes two to five business days to provide initial funding and less than 24 hours thereafter. Business owners can complete most of the application process online.
Crestmark: Another Accounts Receivable Financing Company for Growing Companies
Crestmark’s A/R financing has customized pricing making it suitable for a wide range of borrowers, from startups to those with annual revenues in the millions. With invoice financing up to $7.5 million, this means there is room for the relationship with Crestmark to grow. As a business grows, Crestmark has a wide variety of options to help it, including business lines of credit and Small Business Administration (SBA) loans.
Crestmark A/R Financing Costs
- Discount rate: Customized for each borrower
- Additional fees: Any additional fees will be disclosed in the A/R financing agreement
Similar to Harper Partners, Crestmark offers both recourse and nonrecourse invoice financing. Business owners can expect to pay a higher fee for nonrecourse financing because the invoice financing companies have to spend more time working on the account. The fee Crestmark charges is related to the service provided to the business, with recourse invoice factoring offering the lowest rates.
Crestmark A/R Financing Terms
- Funding amount: Up to $7.5 million
- Advance rate: Up to 90%
- Repayment terms & schedule: Repaid as invoices are paid
- Personal guarantee: Possible
- Speed to funding: Three to five days
The time Crestmark will hold an unpaid invoice before requiring a business to collect on it will depend on the specific A/R financing agreement. If a business needs nonrecourse A/R financing, then Crestmark may assist it, but it will require a lower advance rate and may be more expensive. Paragon and Harper Partners are also options for nonrecourse financing.
Crestmark Receivables Financing Additional Features
- Customer interaction: Depends on the receivables financing arrangement
- Assignment of invoices: Required
- Type of invoice financing agreement: Recourse or nonrecourse
Compared to other providers like BlueVine and Paragon, Crestmark offers a more customized A/R financing experience. Crestmark will work with business owners to determine the receivables financing arrangement that works best. As it offers both recourse and nonrecourse A/R financing, the level of interaction it has with customers will vary. One service it can provide includes investigating and approving a customer for credit terms and collections.
Crestmark A/R Financing Minimum Qualifications
- Credit score: Not a determining factor
- Time in business: Not a determining factor
- Annual revenue: Not a determining factor
Crestmark can provide financing to companies as small as startups in most industries, making it great for growing companies wanting to develop a relationship. As with Harper Partners and most invoice financing companies we reviewed, it relies more on the qualifications of the debtors than it does on the applicant.
What Crestmark Invoice Financing Is Missing
The most traditional of the A/R financing companies we reviewed, Crestmark isn’t as transparent about its pricing and qualifications as the others on our list. This may show that Crestmark is more focused on providing custom solutions than it is on making sure its customers fit within a specific credit box.
What Users Think About A/R Financing With Crestmark
Some pros include the fact that Crestmark has no or only limited restrictions on the industries in which it will work, and that its customer service representatives are helpful. A negative is that Crestmark offers its best discount rates with recourse financing. However, this practice is not surprising.
How to Apply for A/R Financing With Crestmark
Business owners apply to Crestmark electronically. Once submitted, Crestmark will assign a relationship manager to work with the business on a one-on-one basis to determine the best-fit financing solution. This may include developing a custom lending solution, which could take days or weeks. Once approved, business owners can get ongoing funding within 24 hours.
Bottom Line
All six of the accounts receivable financing companies reviewed are good options for filling short-term cash flow gaps. Selecting the right A/R financing provider depends on the volume of invoices a business plans to factor and the familiarity of the lender with the specific industry.
Christian Meebles
What do you think of an automated process for accounts receivable? I found another blog post that talked about it and was curious what other people thought. Here is that article if you’d like to take a look: blog.siyea.net/blog/accounts-receivable-management-tools-every-company-needs
Michael Banner
What is the purpose of the lenders having access to your accounting records? Is it read only access?
Dock David Treece
Hi Michael,
Most receivable lenders want to be able to review your business’s financials on an ongoing basis. That’s one of the ways they confirm that the numbers you represent to them are accurate and gauge your ongoing creditworthiness. They shouldn’t be making any changes to your finances or moving any money. However, they may have you set up a lockbox system to receive payments so they can be repaid automatically as invoices payments are received from clients – but they shouldn’t be going in and changing your financial records.
Best,
Dock
Daniel
Can you recommend and company’s that work with b2c
Jeff White
Hi Daniel!
Great question! Fundbox, who is featured in this article works with B2C businesses. You must also have been in business for 6 months or more to qualify. Their process is very smooth and they could potentially get you funded in as quick as 1 day. You also might want to check out a business line of credit if you have a decent credit profile. Good luck!
Best,
Jeff
Mike Justice
You can always use a factoring company 1st Commercial Credit and Paragon Finiacial Group are the ones I like the most .