The best construction factoring companies should offer large funding amounts, competitive rates and fees, and quick access to funds. They should also have a combination of flexible qualification requirements and favorable financing terms, such as long repayment periods and no long-term contracts.
Here are my top picks for the six best invoice factoring for construction companies:
- Clarify Capital: Best overall for rates, terms, and multiple financing options
- FundThrough: Best for tailored funding options
- Capital Plus: Best for startups and flexible qualification requirements
- 1st Commercial Credit: Best for easy documentation requirements for small funding needs
- Factor Funding Company: Best for low revenue businesses
- Scale Funding Formerly TCI Business Capital : Best direct lender for fast funding or short-term funding needs
Comparison of the best construction factoring companies
Lender | Max. funding amount | Est. fees per 30 days | Est. starting APR | Max. advance rate | Application to funding speed |
|---|---|---|---|---|---|
 | Varies | 0.5% | 15% | 100% | 24 hours |
 | Varies | 2.75% | 33% | 100% | 24 hours |
 | $10 million | 2% | 25% | 90% | 48 hours |
 | $10 million+ | 0.69%-1.59% | 18% | 97% | 3-5 days |
 | Varies | 1%-3% | 20% | 95% | 1-7 days |
 | $10 million | 2% | 24% | 90% | 24 hours |
Clarify Capital: Best overall for rates, terms & multiple financing options
 | |
Rates and terms | |
Estimated fees per 30 days | As low as 0.5% |
Estimated APR | 15% and up |
Funding amount | Varies |
Repayment term | Up to 120 days but can vary |
Advance rate | 100% |
Funding speed | As fast as 24 hours |
Qualifications | |
Revenue | $120,000 ($10,000 per month) |
Time in business | 6 months |
Why I like Clarify Capital
Clarify Capital is the best overall factoring company for construction because of its low rates and flexible financing terms. Of the lenders in this guide, it offers the lowest starting rate and is one of two companies that extends up to 100% financing.
An advantage of working with Clarify Capital is the fact that it’s a broker with over 75 lenders in its network. Having this many financing options means you’re more likely to be paired with a factoring company that has a low rate and offers financing as soon as the next day.
Besides that, the number of providers the broker has partnered with can also improve your chances of getting approved. If you’re unsure which provider to choose, you can work with a specialist to walk you through the pros and cons of each option. Notably, the broker can work with early-stage businesses and only needs a three to four-month history of recent bank statements to verify income.
To learn more or to submit an application, you can visit the Clarify Capital website. There, you can complete an application in under two minutes.
FundThrough: Best for tailored funding options
| |
Rates and terms | |
Estimated fees per 30 days |
|
Estimated APR | 33% and up |
Funding amount | Varies |
Repayment term | Up to 90 days |
Advance rate | Up to 100% |
Funding speed | As fast as 24 hours |
Qualifications | |
Revenue | Varies |
Time in business | 3 months recommended |
Why I like FundThrough
FundThrough offers invoice factoring that can be utilized for finished construction projects. It’s known for providing an excellent customer experience in that it tailors funding solutions to meet the specific needs of your business. It also provides a simple application process that can give you quick access to funding at competitive rates and terms.
That said, a perk of working with FundThrough is that you can link accounting software such as QuickBooks and OpenInvoice, which can be used to facilitate the application process easily. This is because the company uses AI to review and determine your offered funding amount and terms. Another benefit is that it is one of only two companies on this list with an advance rate of up to 100% (Clarify Capital is the other).
To learn more about the process and whether or not it may suit your construction factoring needs, you can check out the FundThrough website. There, you can submit an application, and if approved, you will receive funding in as little as 24 hours.
Capital Plus: Best for startups & flexible qualification requirements
| |
Rates and terms | |
Estimated fees per 30 days | 2%, but may vary |
Estimated APR | 25% and up |
Funding amount | $50,000 to $10 million |
Repayment term | Up to 90 days |
Advance rate | Up to 90%, but may vary |
Funding speed | As fast as 48 hours after approval |
Qualifications | |
Revenue | None |
Time in business | None |
Why I like Capital Plus
Capital Plus is the only provider listed in this guide with no requirements for revenue and time in business. For this reason, it can be a great option for startups with limited resources that may not yet have a history of earnings.
It is a direct lender with in-house underwriters. While this may not give you multiple options as you could get with a broker like Clarify Capital, one advantage is that loan decisions can be made fast and with more flexibility. As a result, Capital Plus can issue funding for less common and difficult scenarios. Some examples include funding bonded jobs, progress billing, and other distressed situations.
Funds obtained from this provider can be used for any business purpose. This includes hiring new employees, paying contractors or suppliers, and funding new projects. Construction factoring with Capital Plus requires no long-term contracts, and there are also no monthly minimums.
To apply or get a quote, you’ll need to complete an online form requesting a callback. You can also call the company’s toll-free number for any questions.
1st Commercial Credit: Best for easy documentation requirements for small funding needs
 | |
Rates and terms | |
Estimated fees per 30 days | 0.69% to 1.59% |
Estimated APR | 18% and up |
Funding amount | $10,000 to $10 million+ |
Repayment term | Typically up to 60 days |
Advance rate | 97% |
Funding speed | 3 to 5 days |
Qualifications | |
Revenue | $120,000 annually recommended but can vary |
Time in business | None |
Why I like 1st Commercial Credit
With 1st Commercial Credit, funding requests for less than $350,000 can be approved with no requirement for financial documents. It also provides competitive rates and loan terms, making it a good option if you’re looking for an easy approval and funding process. What’s more, it offers one of the highest advance rates on our list after Clarify Capital and FundThrough, as you can get up to 97%.
It commonly works with appraisers, asphalt companies, cable companies, carpenters, and electrical contractors. Even if you don’t fall into one of those categories, it can most likely still work with you if you are a construction-related firm. It also doesn’t require a designated time in business, so it can be a good option for early-stage businesses with limited operating and financial history.
To learn more, you can visit the 1st Commercial Credit website. There, you’ll find the company’s toll-free number available 24/7. You can also submit an online request for a quote.
Factor Funding Company: Best for low revenue businesses
| |
Rates and terms | |
Estimated fees per 30 days | 1% to 3% |
Estimated APR | 20% and up |
Funding amount | Varies |
Repayment term | Up to 90 days |
Advance rate | Up to 95% |
Funding speed | 1 to 7 days |
Qualifications | |
Revenue | None |
Time in business | Varies |
Why I like Factor Funding Company
Factor Funding Company is one of two companies in this roundup with no minimum revenue requirement. While Capital Plus shares the lack of the requirement, Factor Funding Company’s rates can be more competitive. For this reason, I selected it as the best provider for low revenue businesses.
Best suited for small and midsize businesses, it offers various types of financing solutions nationwide and has customized programs specific to your business needs. It has experienced professionals to help facilitate the process, including managing invoice payments, collections, and more.
To learn more about Factor Funding Company’s factoring offerings, you can visit its website, where you can get a quote or download an application. Upon review, approval and funding are generally a part of a quick process that can take up to a week.
Scale Funding: Best direct lender for fast funding or short-term funding needs
| |
Rates and terms | |
Estimated fees per 30 days | 2% |
Estimated APR | 24% and up |
Funding amount | $50,000 to $10 million |
Repayment term | Up to 120 days |
Advance rate | Up to 90% |
Funding speed | Within 24 hours of approval |
Qualifications | |
Revenue | $600,000 ($50,000 monthly on average) |
Time in business | None |
Why I like Scale Funding
Out of the providers selected, Scale Funding is the best direct lender to choose if you’re looking to get funding quickly. While others in the roundup can also offer funding in as little as 24 hours, Scale Funding offers in-house financing, which can help streamline the process further. That said, working with a provider like Scale Funding instead of a broker is that it has a greater ability to make loan decisions, rather than needing to rely on an outside lender.
While it can work with startups similar to 1st Commercial Credit, one drawback is that it has the highest revenue requirement listed in this guide. To be considered for funding, you must invoice at least $50,000 per month on average. Notably, it offers both month-to-month and one-year financing agreements. Rates may vary per month and can fluctuate based on the value of the invoice.
With its rate flexibility options, you could actually save money in the long term because companies approved for funding do not have to sign any long-term contracts. As a result, it’s also a good option for businesses that may only have factoring needs for short periods throughout the year.
To start the process, you can submit an online application or call the company’s toll-free number.
How I chose the best construction factoring companies
The best construction factoring companies were selected using the following criteria:
- Interest rates and estimated APR
- Repayment terms
- Funding amounts
- Advance rates
- Qualification requirements such as revenue and time in business
- Ease of application
- Documentation criteria
- Funding speed
- Requirement for factoring contracts
- Customer reviews and ratings
Alternatives to invoice factoring for construction
If you think invoice factoring companies for construction aren’t the best fit for your business needs, there are a few alternatives to consider.
- Small business line of credit: A business line of credit is a revolving credit facility that allows you to request funds via a draw, where funds can be deposited into your account of choice. You can draw on the line as needed and repay the balance over time. This flexible option can be used for a variety of business purposes, including emergency expenses and cash flow shortages. Check out our recommendations for the top small business lines of credit.
- Working capital loan: A working capital loan can be used for a wide variety of business purposes, such as rent, operational costs, and payroll. It’s usually provided as a lump sum payment, which is then repaid on a fixed monthly schedule. See our list of the leading working capital loans for options.
- Equipment financing: Specific to purchasing or leasing equipment necessary to run your business, equipment financing can be obtained from a lender and includes vehicles, machinery, computers, and furniture. Our guide on the best equipment financing companies will help you find a lender that fits the bill.
- Business credit card: Similar to a line of credit, a business credit card can be used to make as-needed business purchases. The balance can be repaid over time, and there are limited restrictions as to what the funds can be used for. To learn more, check out our guide on using a credit card to fund your business. If you’re ready for options, then our roundup of the best small business credit cards is a good jumping-off point.
Frequently asked questions (FAQs)
They can be if they meet your financing needs. This may be especially true if you need quick access to funding to help free up cash flow for your business. If you have a construction project, it may be worth choosing a factoring company to help you better manage your finances.
The main disadvantage of factoring is that it may be a more expensive financing option over time. Typically, the longer it takes the customer to pay an invoice, the more expensive it is for your business since it’s paying fees to the financing company every month.
When choosing a factoring company, you should consider the various qualifications and financing terms offered by the provider. You’ll want to see to it that you meet the minimum qualification criteria to ensure better odds of approval and that the factoring company offers financing that suits your business needs with regard to funding, repayment, and fees.
Rates can vary depending on the provider, but generally, a good rate for factoring is typically anywhere from 1% to 3% for every 30-day period — but pay attention to what your long-term fees will be. This is because some providers may require a contract to factor for a minimum length of time. If you do not need recurring needs for factoring, you could end up paying more fees by agreeing to one of these contracts.
Bottom line
If you need construction invoice factoring for your business, the lenders above may offer a financing solution applicable to your specific project. They were chosen for their flexible qualification requirements, competitive rates and terms, and quick access to funds. Before proceeding, be sure to consider all alternative financing options before choosing invoice factoring.
