6 Best Construction Factoring Companies 2019

Construction factoring is a financing option for businesses in the construction industry. Instead of delaying work because of slow paying clients, factoring allows your business to forge ahead, taking on more and larger projects. We examined eight construction invoice factoring companies and compiled our list of the six best for small business owners.

Top 6 Construction Factoring Companies 2019

How We Evaluated the Best Construction Invoice Factoring Companies

When evaluating the best construction invoice factoring companies, we prioritized the overall costs of factoring invoices with each lender. We also included the factoring amount, advance rate, and qualification requirements to assist businesses in determining the best provider. Finally, we considered the funding speed and application process for those construction companies needing invoice factoring quickly.

The criteria we used to evaluate the best construction factoring companies include:

• Overall costs: The overall cost of factoring depends on the discount rate charged by the lender and the amount of time the factored invoice is outstanding.
• Factoring amount: The maximum amount of working capital that each construction factoring company can provide for your business, and the smallest amount it will consider for funding.
• Advance rate: The portion of your invoice that an invoice factoring company is willing to advance.
• Qualification requirements: Whether a construction factoring company will fund businesses with pay-when-paid, clawback, and progress billing clauses, and whether it will consider business owners who have outstanding liens, tax issues, and performance bonds.
• Application process: Although some lenders offer an online application, most will require additional documentation, such as contracts and bank statements, after you apply.
• Speed of funding: How quickly an invoice factoring company can provide initial funding.

Based on these criteria, we concluded that CapitalPlus is the best overall construction invoice factoring company. It has low rates of 2% per month, with no contracts or origination fees for an unlimited amount of funding and an online application. It also advances up to 85% of invoices and will fund companies with outstanding liens, performance bonds, and restrictive clauses.

CapitalPlus: Best Overall Construction Factoring Company for Small Businesses

CapitalPlus is the best overall construction invoice factoring provider for small businesses based on our criteria. It offers unlimited funding, rates of 2% per month, and will work with construction companies with progress billing and performance bonds. It’s highly regarded by developers, construction company owners, and subcontractors, and has a quick online application with funding as soon as the next day.

CapitalPlus Construction Factoring Rates & Fees

CapitalPlus charges a discount rate of up to 2% per month for factoring construction invoices. This is the lowest rate we evaluated among construction factoring companies, and results in an estimated APR of 14% to 40%, assuming you factor invoices over the course of a year.

CapitalPlus construction invoice factoring rates and fees include:

• Discount rate: Up to 2% per month, based on an equivalent bimonthly or daily rate
• Expected APR: 14% to 40%
• Origination fees: None
• Additional fees: Wire transfer fee $25; ACH transfer is free

CapitalPlus charges no origination fees, leading to a simple, all-inclusive fee, except for a wire transfer fee that’s charged by your bank and passed on to you. Depending on your contract, you will have either a daily or 15-day rate for your invoices, with the 15-day rate typically being more expensive depending on the timing of repayment. When you factor $10,000 worth of invoices, you’ll be charged between $3.85 and $10.95 per day.

CapitalPlus Construction Factoring Terms

With CapitalPlus, you must factor at least $10,000 of invoices at a time but, according to a company representative, there is no limit to how much you can factor. You’ll receive between 65% to 85% of the invoice, depending on the creditworthiness of your debtors, the complexity of your contract, and the extent of your relationship with the company.

CapitalPlus construction factoring terms include:

• Funding amount: $10,000 or more
• Advance rate: 65% to 85%
• Contract term: None
• Type of invoice financing agreement: Recourse; however, some borrowers may qualify for non-recourse if they are well-established
• Repayment term and schedule: Automatically repaid when your invoices are paid
• Lien position: First lien position required
• Personal guarantee: Required
• Speed to funding: As soon as the next day

CapitalPlus and Factor Funding Company are the only two invoice factoring companies that offer no maximum on factored invoices. All the lenders we evaluated require a first lien position and a personal guarantee, but only CapitalPlus and BlueVine offer funding as soon as the next business day to your construction company. CapitalPlus offers both recourse and non-recourse factoring. However, the second option is rarer and reserved for long-term customers or well-established businesses.

CapitalPlus Construction Factoring Requirements & Qualifications

CapitalPlus is the only lender on our list that is comfortable working with you even if you have a performance bond. It will also accept progress billing, pay-when-paid clauses, and may even work with you to settle tax and legal issues to get you funded. This makes it the easiest lender to qualify for among the best construction factoring companies.

CapitalPlus construction factoring minimum qualifications include:

• Performance bonds: Accepted
• Progress billing: Accepted
• Pay-when-paid clauses: Accepted
• Clawbacks: Typically no, with some exceptions depending on the contract
• Legal and tax issues: May fund you if the legal issues are minor or your tax debt is currently on a repayment plan
• Annual revenue: No minimum requirement
• Time in business: No minimum requirement
• Business owner personal credit score: Minimal to no credit history required

Invoice factoring companies rarely require a minimum annual revenue, time in business, or personal credit score to qualify. This is because the debtor paying the invoice is the one the company is most concerned with, rather than the owner of the factoring company. However, every factoring company we evaluated will still run a credit check to evaluate any past bankruptcies or outstanding issues that may interfere with collections.

What CapitalPlus Construction Invoice Factoring Is Missing

CapitalPlus is an excellent source of funding for small business construction companies wanting to factor their outstanding invoices. However, they do have a minimum factor requirement of $10,000 that smaller construction companies and subcontractors may find difficult to meet. For a lower minimum requirement, Factor Funding Company only requires a minimum of $6,000.

CapitalPlus Construction Invoice Factoring Reviews

There are no CapitalPlus reviews online. From our conversations with industry leaders in the invoice factoring industry, everyone was confident in its services and periodically referred clients to the company. If you use CapitalPlus, drop in and leave a review of its service on our CapitalPlus reviews page.

How to Apply for CapitalPlus Construction Invoice Factoring

With CapitalPlus, you can apply online, email an application, or print one out, scan it, and email it. Once you submit an application, it will ask you to provide any additional paperwork, like contracts. You can get funds in your account as soon as the next business day at rates of 2% per month for an unlimited amount of invoices.

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Factor Funding Company: Best Factoring Company for Month-to-Month Contracts

The Factor Funding Company is a close runner-up to CapitalPlus that also considers projects with progress billings and pay-when-paid clauses. Factor Funding also has no limit on its factoring facility and its rates are fair, at 3% for the first month and 1% every 10 days after that. It also offers a downloadable PDF application and can get you funded in one week.

Factor Funding Company Construction Factoring Rates & Fees

The Factor Funding Company has a minimum charge of 3% for the first 30 days regardless of when the invoice is paid and 1% every 10 days after that. It also charges an origination fee of $400 to set up the account, payable after your application has been reviewed and pre-approved. Overall, this is more expensive than the top provider on our list, CapitalPlus.

Factor Funding Company construction factoring rates and fees include:

• Discount rate: 3% for the first 30 days, then 1% every 10 days after that
• Expected APR: 40% to 65%
• Origination fees: $400, payable after pre-approval
• Additional fees: Wire transfer fee $25; ACH transfer is free

The initial charge of 3% for the first 30 days is not unusual in the construction invoice factoring industry. However, it can inflate the overall cost of financing if an invoice is repaid in a few days because the full 3% will still be due. Based on our estimated APR of 45% to 70%, factoring $10,000 in invoices with Factor Funding Company will cost you between $11.00 and $17.80 per day in interest.

Factor Funding Company Construction Factoring Terms

Factor Funding Company has a minimum invoice factoring requirement of $6,000 and, like CapitalPlus, has no stated maximum amount. It also offers an advance rate of 70% to 80% with a month-to-month contract. This means you can cancel in any month, but in a month you factor invoices, all of them must be factored.

Factor Funding Company construction factoring terms include:

• Funding amount: $6,000 to no stated maximum
• Advance rate: 70% to 80%
• Contract term: Month-to-month
• Type of invoice financing agreement: Recourse
• Repayment term and schedule: Automatically repaid when your invoices are paid
• Lien position: First lien position required
• Personal guarantee: Required
• Speed to funding: Within one week of submitting an application

Factor Funding Company only offers recourse financing agreements, meaning that if your debtors’ default, you will repay the financing. Like other lenders on our list, it requires a first lien position and a personal guarantee. However, its speed of funding is slower than CapitalPlus, taking up to one week to fund your first invoice.

Factor Funding Company Construction Factoring Requirements & Qualifications

To qualify for construction invoice factoring with the Factor Funding Company, you can’t have a direct performance bond. If you are a subcontractor, your general contractor may be bonded. Factor Funding Company will also work with you if you are on progress billing, have pay-when-paid clauses, and even with clawbacks if your business has a good track record.

Factor Funding Company construction factoring minimum qualifications include:

• Performance bonds: No, but if you are a subcontractor, the general contractor may be bonded
• Progress billing: Accepted
• Pay-when-paid clauses: Accepted
• Clawbacks: In some circumstances, for businesses with a strong track record
• Legal and tax issues: No
• Annual revenue: At least $72,000
• Time in business: No minimum requirement
• Business owner personal credit score: No minimum requirement

The annual revenue requirement for invoice factoring with the Factor Funding Company is based on the minimum factoring amount of $6,000 per month. Like other invoice factoring companies, it has no time in business or personal credit score requirements. However, unlike CapitalPlus, it won’t work with companies that have outstanding legal or tax issues.

What Factor Funding Company Construction Invoice Factoring Is Missing

Factor Funding Company offers borrowers no stated maximum amount of funding. However, it has a minimum annual revenue qualification of $72,000 and does not work with businesses that have performance bonds or outstanding legal or tax issues. For a provider with no minimum requirement that is willing to work around legal and tax issues, consider construction invoice factoring with CapitalPlus instead.

Factor Funding Company Construction Invoice Factoring Reviews

There are no Factor Funding Company reviews available online. However, it was recommended by some other factoring providers that we spoke to. We expect Factor Funding Company to work hard to get your construction company funding, and we were pleased with the responsiveness and knowledge of its customer service team when we contacted them.

How to Apply for Factor Funding Company Construction Invoice Factoring

Factor Funding Company can get your business any amount of financing at 3% per month once you’re approved for construction invoice factoring. There is a downloadable PDF application with additional required paperwork outlined at the bottom. The application is short and easy to fill out, with funding available for your business within one week.

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Working Capital of America: Best Factoring Company for Established Businesses

Working Capital of America (WCA) is another invoice factoring company that offers rates of 3% per month. Its factoring facility is only up to $5 million but it’s willing to consider most complex contracts, including those that have clawbacks. It has no stated minimum annual revenue requirement, but the company typically works with construction businesses with at least $100,000 in monthly revenue.

Working Capital of America Construction Factoring Rates & Fees

Construction invoice factoring with Working Capital of America has the same starting rate of 3% per month as the Factor Funding Company. They both have a set rate for the first month. However, unlike the Factor Funding Company, Working Capital of America switches to a daily rate after the first month.

Working Capital of America construction factoring rates and fees include:

• Discount rate: 3% per month, calculated daily after the first month
• Expected APR: 45% to 70%
• Origination fees: 0.5% of the funding amount
• Additional fees: Wire transfer fee $25; ACH transfer is free

You will also need to pay an additional origination fee of 0.5% of the funding amount, which can be higher than other providers, based on the invoices you factor. Based on the rates and the origination fees it charges, we estimated an APR range of 45% to 70%. This means that for every $10,000 in invoices factored, you will pay between $12.30 and $19.10 per day.

Working Capital of America Construction Factoring Terms

Working Capital of America has a similar minimum requirement to CapitalPlus, but it can only fund you up to $5 million at a time. It also has a higher starting advance rate than other construction factoring companies of 75%. You will also have to commit to a one-year contract and factor all of your approved invoices with the company during that time.

Working Capital of America construction factoring terms include:

• Funding amount: $10,000 to $5 million
• Advance rate: 75% to 80%
• Contract term: At least one year
• Type of invoice financing agreement: Recourse
• Repayment term and schedule: Automatically repaid when your invoices are paid
• Lien position: First lien position required
• Personal guarantee: Required
• Speed to funding: Decision within 72 hours and funding in one to two weeks

WCA’s one-year contract restriction to factor construction invoices is longer than CapitalPlus and Construction Factor Company. Like the other lenders we reviewed, Working Capital of America will require a first lien position and a personal guarantee. Although the company can give you a decision within 72 hours of applying, you will still need to wait one to two weeks to get funded.

Working Capital of America Construction Factoring Requirements & Qualifications

Working Capital of America does not accept direct performance bonds. However, they will work with subcontractors performing work for general contractors who are bonded. Additionally, like CapitalPlus, it will work with progress billing, pay-when-paid clauses, and even clawbacks. However, legal and tax issues are not OK and, unlike other lenders, there is a minimum time in business requirement.

Working Capital of America construction factoring minimum qualifications include:

• Performance bonds: No, but if you are a subcontractor, the general contractor may be bonded
• Progress billing: Accepted
• Pay-when-paid clauses: Accepted
• Clawbacks: Accepted
• Legal and tax issues: No
• Time in business: At least three months
• Annual revenue: No stated minimum, but clients typically earn at least $100,000 per month
• Business owner personal credit score: No minimum requirement

WCA’s minimum time in business is at least three months, which is relatively low but still stands out in an industry that rarely has a minimum. Additionally, while there is no annual revenue requirement, when we contacted the company we were told that clients typically have at least $100,000 in monthly revenue. Like other construction factoring solutions, there is no minimum personal credit score, but your credit score will be checked when you apply.

What Working Capital of America Construction Invoice Factoring Is Missing

Working Capital of America offers borrowers up to 80% of the value of their invoices, which is substantial. However, it only provides invoice factoring up to $5 million dollars, which may be insufficient for some businesses. Two of the providers we evaluated, Factor Funding Company and CapitalPlus, both offer unlimited funding to businesses in the construction industry on invoices that they approve.

Working Capital of America Construction Invoice Factoring Reviews

Working Capital of America reviews are hard to come by. This is likely because it serves a relatively small niche within the factoring industry. Judging from the conversations we had with customer service, its team seemed responsive and knowledgeable.

How to Apply for Working Capital of America Construction Invoice Factoring

Working Capital of America can get you funded for up to $5 million in about one week. The starting rate is 3% per month, with daily rates after the first month that the invoice is outstanding. You will need to factor invoices for one year with the company and have at least three months in business to qualify.

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Construction Finance: Best Construction Factoring Alternative for Newer Businesses

Construction Finance offers construction invoice factoring that lets business owners borrow up to $500,000 at any time, which is less than other lenders. It’s an alternative for newer businesses due to its low minimum requirements and high advance rate. Construction Finance is also flexible and charges its fees on a 15-day cycle, with most rates ranging from 1.5% to 2%, and funding available within three to five days.

Construction Finance Construction Factoring Rates & Fees

Construction Finance has one of the highest rates for invoice factoring that we reviewed, at 1.5% to 2% per 15 days. This makes it a good option for invoices that will be repaid quickly, but more expensive than the other providers we reviewed for invoices that last 30 days or more.

Construction Finance rates and fees for construction factoring include:

• Discount rate: 1.5% to 2% per 15 days
• Expected APR: 45% to 80%
• Origination fees: None
• Additional fees: Wire transfer fee $25; ACH transfer is free

Similar to CapitalPlus, Construction Finance does not charge an origination fee on its invoice factoring. We estimated that small business owners can expect to pay an APR between 45% and 80%, based on Construction Finance’s advertised rates. This means that for every $10,000 in factored invoices, you will be charged between $12.30 and $22.00 in interest per day.

Construction Finance Construction Factoring Terms

Construction Finance limits the value of invoices you can factor to $500,000 outstanding at any time. This is the lowest limit among providers we evaluated, making it ideal for smaller construction companies. It also requires that you agree to a two-year contract, although it’s possible to end the contract early if there is no outstanding debt.

Construction Finance terms for construction factoring include:

• Funding amount: Under $500,000 outstanding at any time
• Advance rate: Up to 80%
• Contract term: Two years; however, you can end the contract early if there is no outstanding balance
• Type of invoice financing agreement: Recourse, unless the debtor declares bankruptcy
• Repayment term and schedule: Automatically repaid when your invoices are paid
• Lien position: First lien position required
• Personal guarantee: Required
• Speed to funding: Typically three to five days

Construction Finance offers an advance rate of 80%, and all of its construction invoice factoring agreements are recourse. However, if the debtor declares bankruptcy, Construction Finance told us you won’t be liable for the debt. Like other lenders on our list, it requires a first lien position and a personal guarantee to receive funding. It also offers an online application, with funding three to five days after applying.

Construction Finance Construction Factoring Requirements & Qualifications

Construction Finance requires that you have no performance bonds, but will work with you even if your general contractor has one. It also works with progress billing, pay-when-paid clauses, and clawbacks, which can make it an accessible lender if your contract is complex.

Construction Finance minimum qualifications for construction factoring include:

• Performance bonds: No, but if you are a subcontractor, the general contractor may be bonded
• Progress billing: Accepted
• Pay-when-paid clauses: Accepted
• Clawbacks: Accepted
• Legal and tax issues: No
• Annual revenue: No stated minimum, but typically at least $120,000
• Time in business: No minimum requirement
• Business owner personal credit score: No minimum requirement

Construction Finance does not provide invoice factoring to companies that have legal and tax issues. Although it doesn’t state a minimum requirement, it works mostly with companies that have $120,000 in annual revenue or more. There is no minimum time in business or personal credit score requirement. Instead, like other construction factoring companies, Construction Finance relies on the credit score of your debtors to make a funding decision.

What Construction Finance Construction Invoice Factoring Is Missing

Construction Finance has low minimum qualifications and allows your business to back out of its contract at any time if all your debts are paid. However, it only offers construction invoice factoring up to $500,000 outstanding at any point. This makes it a better fit for newer businesses. If you need more funding, then consider applying with CapitalPlus or Factor Funding Company, which have no maximum funding limit.

Construction Finance Construction Invoice Factoring Reviews

There are no reviews available online for Construction Finance. While researching this provider, we found its customer service team to be responsive and quick to provide all the information we needed. We expect this level of service to carry over to its customers as well.

How to Apply for Construction Finance Construction Invoice Factoring

Construction Finance offers to factor construction invoices up to $500,000 outstanding at a time. Its rates are 1.5% to 2% per 15 days, making it a great option for short-term invoices and newer businesses. You can apply entirely online and receive an approval decision in one day, with funding in two to five days.

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Paragon Financial: Best Factoring Company for Construction Supply Businesses

Paragon Financial is one of the best invoice factoring providers in the industry. Although it doesn’t factor construction invoices, you can get factoring up to $10 million for a construction supply company. You must factor at least $30,000 per month, with rates typically ranging from 1.25% to 2.5% per 30 days, which is lower than other lenders.

Paragon Financial Construction Factoring Rates & Fees

Paragon Financial is one of the most established leaders in the invoice factoring industry. However, because of the complexity of factoring in construction, it focuses on factoring for construction supply companies. Rates range from 1.25% to 2.5% per 30 days, and there is a small one-time fee if you accept the factoring offer.

Paragon Financial construction factoring rates and fees include:

• Discount rate: 1.25% to 2.5% per 30 days
• Expected APR: 16% to 55% or more depending on individual fees
• Origination fees: Small, one-time fee when you accept its factoring offer
• Additional fees: Wire transfer fee $25; ACH transfer is free

Based on the rates that Paragon Financial provided, we calculated an APR that ranges from 16% to 55%. This results in a daily cost of capital of $4.38 to $15.07 for every $10,000 in invoices you factor with Paragon Financial. This makes it an inexpensive way to factor any construction supply invoices you are owed to restock inventory or pay your own suppliers.

Paragon Financial Construction Factoring Terms

Paragon Financial can provide up to $10 million in funding but has a minimum requirement of at least $30,000. It also advances from 80% to 90%, which is higher than the other providers we reviewed for our guide. There is no contract, and since this isn’t direct construction factoring, there are both recourse and non-recourse options available.

Paragon Financial construction factoring terms include:

• Funding amount: $30,000 to $10 million
• Advance rate: 80% to 90%
• Contract term: None
• Type of invoice financing agreement: Recourse and non-recourse available
• Repayment term and schedule: Automatically repaid when your invoices are paid
• Lien position: First lien position required
• Personal guarantee: Required
• Speed to funding: Typically three to 10 days for initial funding

With Paragon Financial, getting funding for your construction supply company will typically take three to 10 days after completing its application, which is available online. Like other construction factoring companies, it requires a personal guarantee and the first lien position to provide funding.

Paragon Financial Construction Factoring Requirements & Qualifications

Since Paragon Financial does not provide direct factoring for construction companies, the issues of performance bonds, progress billing, pay-when-paid clauses, and clawbacks are not applicable. You will, however, need to have at least $360,000 in invoices annually to qualify for funding with Paragon Financial.

Paragon Financial construction factoring minimum qualifications include:

• Performance bonds: Not applicable
• Progress billing: Not applicable
• Pay-when-paid clauses: Not applicable
• Clawbacks: Not applicable
• Legal and tax issues: May be able to fund you in some cases
• Annual revenue: At least $360,000, based on a $30,000 per month factoring minimum
• Time in business: No minimum requirement
• Business owner personal credit score: No minimum requirement

Paragon Financial will work with businesses that have outstanding legal and tax issues, similar to CapitalPlus. It also has no minimum time in business and personal credit score requirement, making it a great option if your construction supply company is struggling to get financing due to poor personal credit.

What Paragon Financial Construction Invoice Factoring Is Missing

Paragon Financial is consistently one of the top-rated factoring companies we evaluate. However, it does not provide factoring for construction companies directly; instead, it works with construction supply companies and other industries. You’ll also need substantial minimum revenue to qualify for factoring, which can make it difficult for small businesses to qualify.

Paragon Financial Construction Invoice Factoring Reviews

Paragon Financial gets positive reviews from its customers on our site and around the web. Positive reviews noted the speed of its funding and the hard work put in by the company to deliver results. Negative reviews noted that some fees were charged that were unexpected, although Paragon seems to disclose all of its fees upfront. For more reviews, visit our Paragon Financial reviews page.

How to Apply for Paragon Financial Construction Invoice Factoring

You can complete an online application and factor invoices up to $10 million with Paragon Financial for your construction supply company. Rates start at 1.25% per month with a small one-time origination fee when you accept a factoring offer. Paragon Financial can get your business approved and funded within three to 10 business days so you can focus on running your business.

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BlueVine: Best Construction Factoring Company for Completed Projects

BlueVine is one of the newer online lenders on our list, with a quick application and funding speed. It offers up to $5 million but only approves completed construction projects, making it ideal for small business owners who have already finished large construction projects. Rates are charged weekly from 0.25% to 1.35% but, unlike other providers, you’ll need a credit score of at least 530 to qualify.

BlueVine Construction Factoring Rates & Fees

BlueVine offers construction invoice factoring to businesses that have already completed a job and are waiting to get paid. It charges rates between 0.25% and 1.35% per week and has an expected APR of 13% to 70%. This makes it one of the least expensive options on our list of factoring companies.

BlueVine construction factoring rates and fees include:

• Discount rate: 0.25% to 1.35% per week
• Expected APR: 13% to 70%
• Origination fees: None
• Additional fees: Wire transfer fee $15; ACH transfer is free

With an APR of 13% to 70%, BlueVine is ideal for factoring invoices that have short repayment terms. Based on this APR range, you could pay as little as $3.50 or as much as $19.20 in daily interest for every $10,000 you factor. However, BlueVine does not charge an origination fee, which means there is no harm in applying and seeing what rate you are offered.

BlueVine Construction Factoring Terms

With BlueVine, you can factor up to $5 million per month at an advance rate of 85% to 90%. This is the highest overall advance rate that we reviewed, but the smaller amount of monthly funding can be difficult for larger construction companies. There is no contract term with BlueVine, so you can factor invoices only when it’s needed.

BlueVine construction factoring terms include:

• Funding amount: $5,000 to $5 million per month
• Advance rate: 85% to 90%
• Contract term: None
• Type of invoice financing agreement: Recourse
• Repayment term and schedule: Automatically repaid when your invoices are paid
• Lien position: First lien position required
• Personal guarantee: Required
• Speed to funding: One to three business days

Like other construction invoice factoring companies, BlueVine requires a first lien position and a personal guarantee. It also only offers recourse financing agreements, unlike Paragon Financial and CapitalPlus. What stands out with BlueVine is its quick online application and the fact that it can get you funded as soon as the next day.

BlueVine Construction Factoring Requirements & Qualifications

Unlike most of the other providers that we covered in this article, BlueVine does not fund businesses that have not completed a project. This means that performance bonds, progress billing, clawbacks, and pay-when-paid clauses will prevent you from qualifying for funding. Also, unlike the other providers, BlueVine has a minimum time in business and personal credit score requirement.

BlueVine construction factoring minimum qualifications include:

• Performance bonds: No
• Progress billing: No
• Pay-when-paid clauses: No
• Clawbacks: No
• Legal and tax issues: No
• Annual revenue: At least $100,000
• Time in business: At least three months
• Business owner personal credit score: At least 530 (check your score for free)

To qualify for construction factoring with BlueVine, you need to be in business for at least three months and have at least $100,000 in annual business revenue. Additionally, the owners of the construction company must have personal credit scores of at least 530 with no outstanding tax or legal issues. This makes it one of the more difficult factoring companies to qualify for.

What BlueVine Construction Invoice Factoring Is Missing

BlueVine is the only factoring company with a simple online application and offers approval decisions the same day. However, it does not offer construction invoice factoring on projects that are still in progress. For an alternative that will fund in-progress projects, consider CapitalPlus or Factor Funding Company for invoice factoring.

BlueVine Construction Invoice Factoring Reviews

BlueVine has generally positive reviews from its customers on our site and around the web. Customers that left positive BlueVine reviews showed that the funding process was quick and simple to apply for. Some negative reviews showed dissatisfaction with being turned down for funding. To read more reviews, visit our BlueVine reviews page.

How to Apply for BlueVine Construction Invoice Factoring

You can apply online and get funded in one to three days for construction invoice factoring up to $5 million per month with BlueVine. You will need to have an annual revenue of at least $100,000, be in business for at least three months, and have a personal credit score of 530 or higher to qualify. BlueVine only provides factoring for invoices on completed construction projects.

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Advantages & Disadvantages of Construction Factoring

Construction invoice factoring offers businesses the opportunity to borrow against money that they’re already owed. This allows them to bid aggressively on projects and provides needed working capital. However, factoring is also expensive, requires your business to assign relationships to the lender, and it can take a long time to get funded.

The advantages of construction factoring are:

• Your business gets access to needed working capital: Getting access to timely working capital can allow your business to maintain a larger workforce to finish projects on schedule. You can also use the increased working capital to pay suppliers early and receive better terms, which can save you money.
• You can bid on larger projects: Knowing you can get access to capital for operations throughout a project, rather than after its completion, can help you bid more aggressively for projects. It can also enable you to expand into more projects when your business is ready.
• It’s easy to qualify: Unlike most forms of financing, most construction factoring companies rely on the creditworthiness of your debtors to determine whether to fund you. This means that business owners with low personal credit scores or those who own smaller and newer businesses can get funding.

The disadvantages of construction factoring are:

• It’s an expensive form of financing: With typical APRs ranging from 30% to 50%, construction invoice factoring can be an expensive form of financing, especially compared with traditional lenders. However, if used to grow your business, pay off suppliers early, and support growth, they can be a wise investment.
• You need to assign customer relationships: Assigning the collection of invoices to a factoring company can often feel like a big hurdle for businesses. However, in some industries, including construction, factoring is common practice and is not looked down upon by debtors.
• It can take a long time to get funded for complex contracts: The more clauses your contract has that increase the complexity of the transaction, the longer it will typically take to get funded. Working with an experienced construction factoring company can often shorten the time, but it can often take up to a week to review paperwork.

The advantages of using construction invoice factoring outweigh the disadvantages if the financing is used to grow your business by hiring staff, paying off suppliers, and bidding on larger projects. If you can qualify for traditional financing from a bank, it can be more affordable for your business in the long run, but it will also take longer to get funded.

Alternatives to Construction Invoice Factoring

Construction factoring is not the best option for every business. Sometimes, invoice financing may be a more accessible alternative. If your business needs funding to purchase equipment, then equipment financing can have more flexible terms and lower rates. Finally, regardless of other financing, a business credit card can help supplement working capital for small purchases while earning rewards.

The best alternatives to construction invoice factoring are:

Small Business Line of Credit

Using a small business line of credit for your construction business can be a flexible way to manage expenses during a project. The best small business lines of credit offer your business repayment terms up to a year, low starting rates, and are revolving. This means that once you repay the balance, you can borrow from the line of credit again, like a credit card.

Accounts Receivable Financing

Accounts receivable financing is similar to factoring in that you can get approved based on outstanding invoices. However, there is no need to assign invoices. Although you’ll typically receive smaller amounts of funding, up to $100,000, one of the best accounts receivable financing companies, Fundbox, offers borrowers low rates and has similar minimum qualifications to construction invoice factoring providers.

Equipment Financing

When your construction company needs to buy new equipment, it’s often most advantageous to get an equipment loan. You can typically qualify for lower rates (as low as 6% APR), with flexible terms that let you pay off the loan as your equipment earns income. There are other alternative business loans for specific cash flow needs with minimal qualifications.

SBA Loans

An SBA loan is a great way to finance a major project or expansion, including working capital like payroll and materials or equipment. To apply for an SBA loan, you’ll need to complete a more thorough application than other alternatives and wait 30 to 90 days for funding. However, you can get up to $5 million with rates ranging from 8% to 11% and repayment terms up to 10 years.

Frequently Asked Questions (FAQs) About Construction Factoring

In this article, we covered the best construction invoice factoring companies. In our evaluation, we focused on certain pain points construction companies experience when trying to get funded. We’ve also gathered the most frequently asked questions from our forums and around the web and answered them below. If we have not answered your question, feel free to ask it in the Fit Small Business forum.

Is it possible to get construction factoring for subcontractors?

Construction factoring is often the only option for subcontractors. As a smaller or newer construction company owner, getting a traditional form of financing like a line of credit from a bank can be difficult. However, the simple minimum qualifications of invoice factoring allow you to get funding to grow your business.

Why should a business work with a construction factoring company?

Your business should work with a construction factoring company to get financing if you cannot qualify or receive sufficient funding from a traditional lender. The financing can be used to bid on more projects, expand your business, or simply pay off suppliers early to receive a discount.

What is construction factoring?

Construction factoring allows construction companies to access financing by effectively selling outstanding invoices for a large fraction of their value. Depending on when the invoice is paid by the debtor, the factoring company returns the difference less a fee. Although it can be an expensive financing option, it offers the largest potential amount of capital.

Who uses construction factoring?

Construction factoring is used by companies in every step in the chain of a construction project. This includes general contractors, subcontractors, and even construction supply companies. Each one uses the financing to get access to working capital sooner, often to take advantage of discounts or new growth opportunities.

Bottom Line

Construction factoring is a great financing solution for construction businesses needing working capital to grow their business. Rather than waiting up to 90 days to get paid, factoring gives businesses a hassle-free way to get the financing needed right away.

After completing a construction project, your business often has to wait three months or longer to receive payment, delaying your ability to start new projects and keep the momentum going. In this case, invoice factoring from BlueVine is a great way to unlock up to 90% of the value of your invoices. There’s an online application that can be completed in a few minutes, and your business can get up to $5 million in funding the next business day.

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