6 Best Invoice Factoring Companies 2018

With invoice factoring, your unpaid invoices are converted into immediate cash through an advance of 80 to 90 percent of the total amount owed. We reviewed invoice factoring companies to find the six best factoring companies. These companies are experienced at collecting payments for small businesses with some of the best advance and discount rates in the industry.

6 Best Factoring Companies 2018

How We Evaluated the Best Factoring Companies

After considering some of the newest players in the invoice factoring space and the most popular factoring companies, we chose six best factoring companies. In establishing our review criteria, we considered the pain points we’ve heard small business owners express, such as how much you can receive and how quickly you can access the needed funds.

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

• Funding amount: The minimum and maximum monthly factoring limits for each of the invoice factoring companies
• Advance rate: What percentage rate the invoice factoring companies will advance against your invoices
• Discount rate: What discount rate — similar to an interest rate — the invoice factoring companies will charge you to provide funding against your invoices
• Fees: How much in fees you can expect with the invoice factoring companies to charge
• Qualifications: What factors the factoring companies consider when evaluating your business as a potential borrower
• Ease of application: How easy it is to apply for factoring with the invoice factoring company
• Speed of funding: How quickly the factoring company will provide you with access to the funds you need
• Customer reviews: What other businesses are saying about the factoring companies

After considering these criteria, we chose Paragon Financial Group as the best small business factoring company. This is because you can select the invoices you want to advance against from $25,000 to $10 million monthly. Because of this wide limit range and its ability to help companies in almost any situation, even tax problems, Paragon Financial Group is good for most small businesses.

Paragon Financial Group: Best Overall Invoice Factoring Company for Small Businesses

Paragon Financial Group is a great option for most small businesses as it can help businesses in almost any situation, including payroll or legal troubles. It offers a wide range of factoring limits, from $25,000 to $10 million monthly. Only TCI Business Capital has a higher limit at $20 million. If you need to factor less than $25,000 monthly, BlueVine or Payability are better options.

Paragon Financial Group Factoring Rates & Fees

With Paragon Financial Group’s Invoice Factoring Calculator, you can estimate the cost of factoring given different rates and variables easily. Its rates typically range from 1.25 percent to 2 percent per 30 days. Assuming you’re charged a discount rate of 1.25 percent, if an invoice is paid in 90 days, then you would pay 3.75 percent for that invoice. The only other cost is a small, one-time origination fee.

The typical rates, costs, and fees you can expect from Paragon Financial Group are:

• Discount rate: 1.25% – 2% per 30 days
• Origination fee: Small, one-time fee when you accept its factoring offer
• Additional fees: No additional fees are typically charged; all fees will be disclosed in your factoring agreement

Paragon Financial Group’s discount rate includes credit protection and accounts receivable management services. This service isn’t provided by some of other best factoring companies, such as BlueVine. So, while you’ll pay a little more — 30-day starting rate of 1.25 percent at Paragon compared to 1 percent with BlueVine — some businesses might find this value-added service beneficial.

Paragon Financial Group Invoice Factoring Terms

Paragon Financial Group offers advance rates ranging between 80 percent and 90 percent. Only TCI Business Capital offers a larger maximum advance rate at 95 percent. Paragon Financial Group’s monthly funding limit of $25,000 to $10 million represents some of the largest maximum limits — TCI Business Capital is higher at $20 million — and lowest minimum limits — BlueVine is lower at $5,000.

The typical invoice factoring terms offered by Paragon Financial Group include:

• Funding amount: $25,000 – $10 million per month
• Advance rate: 80% – 90%
• Repayment term & schedule: Repaid as your invoices are paid
• Personal guarantee: Most likely required
• Speed to funding: Generally 3 – 10 business days for initial funding and less than 24 hours once your account has been established

The minimum monthly factoring limit with Paragon Financial Group is $25,000. Paragon Financial Group has reciprocal relationships with other factoring companies, and so it will help you find a relationship with another provider if the amount you’re invoicing suddenly changes. If you don’t invoice at least $25,000 per month, BlueVine would be a better option with a $5,000 limit.

Paragon Financial Group Factoring Minimum Qualifications

When qualifying you for invoice factoring, Paragon Financial Group relies more heavily on the creditworthiness of your customers than your business. It’s OK if you have serious credit problems, such as issues with the IRS and payroll troubles. Each of your customers must be individually approved by Paragon, who will run a Dun & Bradstreet credit check on them.

To evaluate if your business qualifies for factoring, Paragon Financial Group considers:

• Credit score: Not a factor; credit problems OK, such as slow-paying customers, IRS issues, payroll problems and legal troubles
• Time in business: Not a factor
• Annual revenue: You must factor at least $25,000 in invoices per month, which means your annual revenue likely needs to be at least $300,000 to qualify

Paragon Financial Group’s monthly factoring minimum of $25,000 is lower than some of the other providers as only BlueVine and Payability have a lower monthly minimum. Making sure you can meet the provider minimum is an important qualification step. Paragon has reciprocal arrangements with other providers, so if it can’t help you, it can refer you to someone who can.

Lastly, Paragon Financial Group will consider your industry. It works with many industries, including manufacturing, wholesaling and distribution. Choosing a provider who is familiar with and specializes in your industry can make the process easier. Plus, your customers may already be familiar with Paragon Financial Group if it’s used by other businesses in your industry.

Paragon Financial Group Invoice Factoring Additional Features

Some additional features of invoice factoring with Paragon Financial Group are:

• Customer interaction: Required
• Assignment of invoices: Required
• Type of invoice financing agreement: Nonrecourse

Paragon Financial Group offers contract and spot factoring on a nonrecourse basis. With spot factoring, you can pick and choose the invoices to factor. Since the factoring is nonrecourse, you aren’t responsible for paying back invoices or the personal guarantee if your customer becomes insolvent or files for bankruptcy.

The spot factoring option is an advantage as you have the flexibility to choose which invoices to factor, so long as you meet the $25,000 monthly minimum. Since your invoices are being purchased by the company, you can expect it to interact with your customers. Paragon Financial Group’s commitment is to treat your customers well and not act like a collection agency.

What Paragon Financial Group Is Missing

Paragon Financial Group only offers nonrecourse factoring. While nonrecourse factoring is known for being more expensive, Paragon Financial Group’s pricing remains competitive. If your invoices were outstanding for 30 days with BlueVine, your rate would start at 1 percent compared to a starting rate of 1.25 percent with Paragon. The cost differential is attributed to the additional services you’re receiving from Paragon Financial Group.

Paragon Financial Group Reviews

We compiled user reviews from around the web and determined that Paragon Financial Group generally has positive ratings. Customers who recommend Paragon Financial Group were impressed with the responsive customer support team. There were no negative reviews found at the time this article was written. Read more on our Paragon Financial Group reviews page.

How to Apply with Paragon Financial Group

Applications for factoring are submitted to Paragon Financial Group electronically. With your application, you’ll also provide your most recent accounts receivable (A/R) aging report, accounts payable aging report, a customer list and a sample invoice. A representative from Paragon with work with you to develop a custom factoring solution. The entire process typically takes 3 to 10 business days.

Visit Paragon Financial Group

BlueVine: Best Invoice Factoring Company for Quick Funding

Small businesses needing to quickly start factoring invoices from $5,000 to $5 million per month will benefit from BlueVine. This is because BlueVine is quick to approve and fund — 10 minutes to approve, 24 hours to fund — businesses for factoring. Plus, it won’t directly interact with your customers, unlike many of the others on our list, such as Paragon Financial Group.

BlueVine Factoring Rates & Fees

BlueVine’s weekly discount rate begins at 0.25 percent of the factored invoice value, which is the amount the company charges as its fee like a 0.25 percent discount rate on $10,000 of invoices equals $25. This equates to discount rates starting at 1 percent per month, which compares favorably to Paragon Financial Group’s 1.25 percent starting rate.

The typical rates, costs, and fees you can expect from BlueVine are:

• Discount rate: Starting at 0.25% per week
• Origination or maintenance fees: None
• Prepayment penalties or termination fees: None
• Additional fees: $15 wire fee; Automated Clearing House (ACH) is free

BlueVine Invoice Factoring Terms

BlueVine offers an advance rate of 85 percent to 90 percent, which is set based on its evaluation of your company and customers. You can receive advances on $5,000 to $5 million in invoices monthly. BlueVine’s minimum factoring amount is lower than every provider other than Payability, making it an excellent option for small businesses.

The typical receivables financing terms offered by BlueVine include:

• Funding amount: $5,000 – $5 million per month
• Advance rate: 85% – 90% on invoices with face values of $500+ to business-to-business (B2B) customers
• Repayment term & schedule: Advances are repaid as customers pay their invoices
• Personal guarantee: Required
• 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) or same day is $15 (via a wire)

The BlueVine approval process begins with a 10+ minute online application, with a decision in 24+ hours. This is much quicker than most of the others on our list. As with the others on our list, once approved you can expect to receive advances within 24 hours. You’ll have the option of receiving your funds via ACH transfers (next day) or bank wires (same day for a small fee).

BlueVine Factoring Minimum Qualifications

While the other providers on this list are primarily relying on the creditworthiness of your customers, BlueVine is looking for its borrowers to meet minimum credit qualifications. In addition, it wants your customers to be creditworthy. Unlike most of the other providers on this list, it doesn’t have any specific industry specializations.

To evaluate if your business qualifies for invoice factoring, BlueVine considers:

• Credit score: 530+ (check your score here for free)
• Time in business: 3+ months
• Annual revenue: $100,000+

The process of qualifying with BlueVine begins with its 10-minute online application. If you connect BlueVine to your QuickBooks, Xero or FreshBooks accounts, that’s all the additional information it typically needs to get you qualified and approved.

BlueVine Invoice Factoring Additional Features

Some additional features of invoice factoring with BlueVine are:

• Customer interaction: None
• Type of invoice financing agreement: Recourse

BlueVine offers invoice factoring on a recourse basis. While it still requires your customers to pay invoices directly to a bank account it establishes in your business’s name, BlueVine will not communicate with your customers directly. This is different from most of the other invoice factoring providers we reviewed.

Similar to some of the other providers, the contract type is spot factoring, meaning you pick and choose the invoices to factor. Since BlueVine is providing you with recourse factoring, you’re responsible for any invoices your customers don’t pay. BlueVine gives you the option of self-paying the invoice, or it will enroll you in an installment repayment plan.

What BlueVine Is Missing

One drawback to BlueVine is that to qualify, you need a 530+ credit score; this is not a requirement for any of the other best factoring companies. However, BlueVine can approve you for funding amounts as low as $5,000. This limit is lower than most of the best factoring companies. Plus, BlueVine allows you to maintain control of your A/R process, which is a plus.

BlueVine Reviews

We compiled user reviews from around the web. In so doing, we determined BlueVine has mostly positive ratings. Positive BlueVine reviews focused on BlueVine’s responsive customer support team and transparent pricing. Critical BlueVine reviews were from users unhappy at being denied funding or about BlueVine’s fees. Read more on our BlueVine reviews page.

How to Apply with BlueVine

With BlueVine, you can get started on invoice factoring from $5,000 to $5 million by completing an online application. Preparing the application takes about 10 minutes. You can potentially get approved and funded in as soon as 24 hours.

Visit BlueVine

TCI Business Capital: Great Invoice Factoring Option for Those Who Want Future Rate Adjustments

TCI Business Capital is best because it offers a month-to-month contract and automatically re-evaluates your discount rate every month to see if it can be reduced. If your factoring volume goes up or your customers pay their invoices quicker, your rate could decrease. This is great compared to altLINE, who locks in a yearly rate unless you request a re-evaluation.

TCI Business Capital Factoring Rates & Fees

The discount rate from TCI Business Capital is re-evaluated month-to-month based on your previous 30-day experience. Many factors go into determining your rate, but the two most important factors are the amount of time it takes your customers to pay outstanding invoices and the amount you factor during the month.

The typical rates, costs and fees you can expect from TCI Business Capital are:

• Discount rate: 1% – 4% per invoice monthly
• Origination fee: None
• Additional fees: $12.95 ACH fee; $19.99 wire fee

TCI charges an additional fee when you receive payments and advances via ACH or bank wires. These fees should be specified in your factoring agreement. It’s also possible that you could be charged a fee if you don’t meet TCI’s $50,000 factoring minimum. We always recommend reading your factoring agreement closely to make sure you understand all the possible charges.

TCI Business Capital Invoice Factoring Terms

The typical invoice factoring terms offered by TCI Business Capital include:

• Funding amount: $50,000 to $20 million per month
• Advance rate: About 90% on B2B or business-to-government (B2G) customers due in 30 – 90 days
• Repayment term & schedule: Paid automatically as your customers pay their invoices
• Personal guarantee: Possible, depending on the strength and age of your business
• Speed to funding: 3 to 4 days for approval and initial funding; ongoing funding with 24 hours of request

The minimum monthly factoring limit with TCI Business Capital is $50,000. If you can’t meet this monthly minimum, then you should consider a different provider, such as BlueVine. With BlueVine, you can factor as little as $5,000 per month.

TCI Business Capital Factoring Minimum Qualifications

To evaluate if your business qualifies for factoring, TCI Business Capital considers:

• Credit score: Not a factor
• Time in business: Not a factor
• Annual revenue: You must factor at least $50,000 in invoices per month; this means your annual revenue likely needs to be at least $600,000 to qualify

The key to you qualifying is the creditworthiness of your customers and not your financial condition. TCI might check your customers’ credit history but may not have to if your records show they pay on time, or if TCI is familiar with your customer through other dealings. Lastly, your customers need to be B2B or B2G businesses with invoices due in 30 to 90 days.

As with several of the other providers, TCI Business Capital will consider your industry when qualifying you for factoring. While TCI works with a number of different industries, several of its top industries include trucking and freight, oil and gas and telecommunications. Choosing a provider who specializes in your industry can make the process easier.

TCI Business Capital Invoice Factoring Additional Features

Some additional features of invoice factoring with TCI Business Capital are:

• Customer interaction: Required
• Assignment of invoices: Required
• Type of invoice financing agreement: Recourse

TCI Business Capital offers recourse factoring. TCI also lets you pick and choose which of your customer invoices you would like to factor every month, with a mix of spot and contract factoring. For those invoices you choose to factor, TCI Business Capital requires an assignment of invoices.

Once you choose a customer, then you must factor all of their invoices for that month. You can avoid factoring invoices for specific customers that may not like a third-party collecting their payments. Similarly, altLINE allows you to pick and choose, but all of your customer invoices must be paid directly to them regardless of whether or not the invoices are factored.

TCI also takes over direct communications with your customers in regards to payment of factored invoices. TCI claims it won’t contact your customers unless it needs to, but reserves the right to communicate with them about paying off their invoices as needed. Each customer must sign a notice of assignment to acknowledge they’ll pay TCI going forward.

What TCI Business Capital Is Missing

The main downside we found with TCI Business Capital is that it has a higher minimum monthly factor amount that you must hit than the others we reviewed. This puts TCI out of reach for those with less than $50,000 per month in invoices. A month-to-month contract can also be bad for some customers, particularly if you want the security of knowing you have a long-term contract.

TCI Business Capital Reviews

We compiled user reviews from our website and around the web and determined that TCI Business Capital generally has positive ratings. Customers who gave TCI Business Capital positive feedback said that the company’s customer service team is professional and reliable. Customers who gave TCI Business Capital critical feedback said that trying to adjust the original terms can be extremely difficult. Read more on our TCI Business Capital reviews page.

How to Apply with TCI Business Capital

To apply with TCI Business Capital, you’ll fill out an application online or by phone. You’ll most likely need to provide tax returns, an A/R aging report, and an accounts payable (A/P) aging report. The approval process takes 3 to 4 days before you’re initially funded, and then you can fund any invoice within 24 hours.

Visit TCI Business Capital

altLINE: Best Invoice Factoring Company for Net Terms Under 30 Days

altLINE is good for businesses with net terms less than 30 days needing up to $5 million, as it’s the most affordable solution we reviewed. If your invoices are paid in less than 30 days — usually 15 — you may receive a discount rate as low as 0.75%. Other than BlueVine, that is the lowest discount rate offered by the factoring companies we reviewed.

altLINE Factoring Rates

altLINE uses a tiered discount rate system. The quicker the invoices are paid, combined with the larger the amount you factor on a monthly basis, the cheaper your fee will be. The best rates are reserved for those factoring $300,000+ per month, with clients paying in 15 to 30 days or less.

The typical rates, costs, and fees you can expect from altLINE are:

• Discount rate: 0.75% – 3.5% per invoice, with discount rate increases every 15 days
• Origination fee: $500 one-time fee
• Additional fees: $30 wire fee; $500 fee if you don’t meet the $30,000 monthly minimum

If you don’t meet altLINE’s $30,000 factoring minimum, you’ll be charged a $500 fee. As with all the providers, it’s very important for you to read your invoice factoring agreement thoroughly before you begin factoring. Understanding what you’ll be charged, including any charges if you don’t meet the factoring minimums, will make it so you don’t have any billing surprises.

altLINE Invoice Factoring Terms

The typical invoice factoring terms offered by altLINE include:

• Funding amount: $30,000 to $5,000,000 per month
• Advance rate: About 90%
• Repayment term & schedule: Paid automatically as your customers pay their invoices
• Personal guarantee: Required
• Speed to funding: 5 to 7 days for initial approval; ongoing funding within 24 hours of you requesting an advance

The minimum monthly factoring with altLINE is $30,000. If you can’t meet this monthly minimum, then you should consider a different provider, such as BlueVine. With BlueVine, you can factor as little as $5,000 per month.

altLINE Factoring Minimum Qualifications

To evaluate if your business qualifies for factoring, atlLINE considers:

• Credit score: Not a factor
• Time in business: Not a factor
• Annual revenue: You must factor at least $30,000 in invoices per month (this means your annual revenue likely needs to be at least $360,000 to qualify)

The key to you qualifying is the creditworthiness of your customers, as with many of the other providers. To qualify for factoring with altLINE, you need to have creditworthy B2B or B2G customers with invoices due within 90 days. altLINE may pull your customers’ credit unless altLINE already knows them from another relationship or based on your experience with them.

As with many of the other factoring companies, altLINE will consider your industry. While altLINE works with a number of different industries, several of its top industries include staffing (payroll) companies, manufacturing and wholesaling, and distribution. Choosing a provider who specializes in your industry can make the process easier.

altLINE Invoice Factoring Additional Features

Some additional features of invoice factoring with altLINE are:

• Customer interaction: Required, but you can also contact your customers
• Assignment of invoices: Required
• Type of invoice financing agreement: Recourse

Nontraditional contract factoring is used by altLINE. While its preference is for you factor all of your invoices with altLINE, it isn’t a requirement. You can pick and choose which invoices you factor. However, all of your customer’s invoice payments, whether you factor them or not, must be made to altLINE’s lockbox or payment account. You will be directly reimbursed within 1 to 3 days for any payments made on nonfactored invoices.

While altLINE requires an assignment of all invoices, its flexibility in communicating with your customers is one of its bright spots. You are allowed to communicate with your customers and let them know where to send their future payments. They won’t contact your customers at all unless they are past due, and you will be kept in the loop on all customer communications.

What altLINE Is Missing

altLINE requires its clients to factor at least $30,000 per month. If your business isn’t large enough to meet this requirement, then you should consider an alternative, such as BlueVine, who offers a lower minimum threshold. If you go below the $30,000 minimum, you’ll be charged a fee of $500.

altLINE Reviews

We searched for reviews around the web about altLINE’s invoice factoring product. As of when this article was written, there aren’t many, if any, reviews available. If you have experience with altLINE you would like to share, we would love to hear from you, as would your fellow readers, so feel free to check out our altLINE reviews page.

How to Apply with altLINE

To get approved for invoice factoring with altLINE you’ll begin by speaking with a representative of the company about your needs. You can get the process started by submitting a request for a free quote on altLINE’s website. You’ll most likely need to provide tax returns as well as A/R and A/P aging reports. The entire application and approval process typically takes 5 to 7 days.

Visit altLINE

Harper Partners: Good Invoice Factoring Option for Recourse or Nonrecourse Flexibility

With Harper Partners you can choose between recourse or nonrecourse factoring. Similar to most of the best factoring companies on our list, Harper Partners is able to work with businesses that have experienced credit issues. Harper Partners offers advance rates up to 90 percent, limits from $25,000 to $5 million and monthly discount rates as low as 1 percent to 3 percent.

Harper Partners Factoring Rates

Harper Partners’ discount rates terms assume you’re using recourse factoring. However, some companies will find nonrecourse factoring beneficial as the provider takes most of the credit risk. Harper Partners may be able to provide you with nonrecourse factoring on a case-by-case basis, but you can expect your rates to be higher.

The typical rates, costs, and fees you can expect from Harper Partners are:

• Discount rate: 1% – 3% per month
• Origination fee: A small one-time fee is possible
• Additional fees: Review your accounts receivable financing agreement to make sure you understand any potential fees

All fees should be specified in your factoring agreement. It’s possible you could be charged a fee if you don’t meet Harper Partner’s $50,000 per month factoring minimum. We always recommend reading your factoring agreement closely to make sure you understand all the possible charges.

Harper Partners Invoice Factoring Terms

You’ll get the best terms if you enter into a recourse factoring arrangement with Harper Partners, meaning you’re responsible for invoices your customers don’t pay. If nonrecourse factoring makes sense for your circumstances, Harper Partners can also help you. The trade-off is you’ll pay higher fees and receive a lower advance rate.

The typical invoice factoring terms offered by Harper Partners include:

• Funding amount: $50,000 – $5 million
• Advance rate: About 90%
• Repayment term & schedule: Repaid as your invoices are paid
• Personal guarantee: Possible
• Speed to funding: 2 – 5 business days to provide you with the initial funding, and less than 24 hours once your account has been established

The minimum monthly factoring with Harper Partners is $50,000. If you can’t meet this monthly minimum, then you should consider a different provider, such as BlueVine. With BlueVine, you can factor as little as $5,000 per month.

Harper Partners Factoring Minimum Qualifications

To evaluate if your business qualifies for factoring, Harper Partners considers:

• 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: You must factor at least $50,000 in invoices per month; this means your annual revenue likely needs to be at least $600,000

To qualify, you need to work with B2B or B2G customers. Additionally, your invoices must be due and payable within 90 days and not pledged to another lender. Similar to most of best factoring companies on our list, Harper Partners does not require a minimum credit score. However, your business cannot have a history of serious legal or tax issues, unlike Paragon.

Harper Partners Invoice Factoring Additional Features

Some additional features of invoice factoring with Harper Partners are:

• Customer interaction: Available upon your 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 only contacts your customers if you want them to do so. Harper will send invoices in your name. If your customers are paying slowly and it comes time to collect, Harper Partners is available to provide you with support through polite customer service members. Payments for your invoices are directed to an account established in your business name.

The standard invoice financing product offered by Harper Partners is recourse. This means you’re responsible if your customers don’t pay. The length of time Harper Partners will hold an unpaid invoice before requiring you to pay will be established in your factoring agreement. If you need nonrecourse factoring, then Harper may be able to assist you with a lower advance rate.

What Harper Partners Is Missing

Unlike Paragon Financial Group, Harper Partners cannot work with your business if you have a history of serious tax or legal issues. If this is your situation, you would be better off choosing Paragon Financial Group.

Harper Partners Reviews

We compiled user reviews from around the web and determined there are not yet very many customer reviews as Harper Partners is still a relatively new company. We expect businesses will like the transparency that appears to be offered by this company. A drawback is that Harper Partners is unable to work with businesses that have a history of serious tax or legal issues.

How to Apply with Harper Partners

You’ll submit your application to Harper Partners electronically. It will take Harper Partners 2 to 5 business days to provide you with initial funding, but then it’s less than 24 hours thereafter. You can receive up to $5 million in invoice financing with advances rates as high as 90 percent.

Visit Harper Partners

Payability: Best Invoice Factoring Company for eCommerce Businesses

Payability is a good option for ecommerce businesses selling directly on marketplaces such as Amazon, Walmart and Etsy. With Payability, ecommerce businesses are able to borrow against future or daily marketplace invoices. The number of marketplaces Payability serves keeps increasing, which means more and more businesses are able to benefit from this service.

Payability Factoring Rates

The typical rates, costs, and fees you can expect from Payability are:

• 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
• Prepayment penalties or termination fees: None
• Additional fees: None

In the event Payability advances against your future receivables and collects sooner than expected, you’ll get a rebate equal to the number of weeks early the collection occurred. For example, say collection happened four weeks early on $100,000 in receivables, then your rebate would equal $3,000 — $750 for each week times four.

Payability Invoice Factoring Terms

The typical invoice factoring terms offered by Payability include:

• 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: About 80%
  • Future Invoices: About 80% or 85%
• Repayment term & schedule: Repaid as your marketplace invoices are paid
• Personal guarantee: Likely required
• Speed to funding: Minutes to apply with a decision and funding within 24 hours

Payability Factoring Minimum Qualifications

To evaluate if your business qualifies for factoring, Payability considers:

• Credit score: Not a factor
• Time in business:
  • Daily Invoices: At least 90 days of sales history with your ecommerce marketplace
  • Future Invoices: At least 6 months of consistent sales history with your ecommerce marketplace
• Annual revenue:
  • Daily Invoices: About $2,000 per month in sales with your ecommerce marketplace
  • Future Invoices: About $5,000 per month in sales on multiple items with your ecommerce marketplace

When qualifying you for invoice factoring, Payability is mostly concerned with your performance on your ecommerce marketplace like Amazon, Walmart and Etsy. Because of this, Payability’s qualifications are focused on your marketplace sales volume and history. In addition to your sales history and volume, your account health needs to be good.

Payability Invoice Factoring Additional Features

Some additional features of invoice factoring with Payability are:

• Customer interaction: Collection of receivables from your ecommerce marketplace
• Assignment of Invoices: Required

Payability helps collect your ecommerce marketplace accounts receivable, daily or future. Depending on the invoice factoring product you choose, you’ll either borrow against daily receivables or future marketplace receivables.

What Payability Is Missing

The downside to Payability is that it’s only available to ecommerce marketplace sellers. So, if this isn’t you, then Payability isn’t the right provider, and you should choose one of the other best factoring companies. Given the growth in ecommerce and the number of people engaging in this type of business, it’s a great niche product if you fit the target profile.

Payability Reviews

We’ve compiled available Payability reviews and found generally positive ratings. Positive Payability reviews came from ecommerce sellers who like getting funds from their marketplace immediately instead of the usual biweekly timeline. There were very few negative Payability reviews. Those that existed dealt with miscommunication over how much Payability charges. Read more on our Payability reviews page.

Where to Find Payability

You can apply for invoice financing with Payability online in minutes. The main step is to connect Payability with your marketplace account like Walmart, Amazon, eBay and Etsy. If approved, funding can happen as soon as the next business day.

Visit Payability

Alternatives to Invoice Factoring Companies

There are several alternatives to invoice factoring if it turns out it’s not right for you. Examples of when invoice factoring might not be appropriate include if you don’t have B2B or B2G accounts receivable, your business is very creditworthy with an abundance of collateral, or your company is very small. Check out our article on invoice financing, which is similar in many regards but offers lower limits and business-to-consumer (B2C) options.

Some of the best alternatives to invoice factoring include the following:

• Business line of credit: A small business line of credit (LOC) allows you to make advances against a pre-established credit limit and only pay interest on the amount advanced; check out this article about some of the Best Small Business Lines of Credit
• Fast business loans: With a fast business loan, you can get access to short-term financing in as soon as one to three business days; as a trade-off to the speed with which you can get the funds, you’ll typically pay a high interest rate
• Working capital loans: Working capital loans can be used to buy inventory, cover payroll, or pay for other day-to-day operational expenses; there are quite a few lenders who can provide you with quick working capital funding in a matter of days
• Business credit card: A business credit card is a good option for businesses that are very small, want to manage employee expenses or earn rewards; check out our article on some of the Best Small Business Credit Cards
• SBA CAPLine: With the Small Business Administration (SBA) CAPLine program, your small businesses can get up to $5 million in short-term and cyclical working capital financing; for more information, check out our article on Six Types of SBA Loans

The Bottom Line

Invoice factoring is a good tool for businesses needing to cover cash flow gaps while waiting for customer payments. Even businesses with credit problems can typically qualify. Furthermore, many factoring companies provide valuable services such as accounts receivable management and collections at no additional cost. The best factoring companies we reviewed are good options for small businesses.

We recommend Paragon Financial Group as the overall best small business factoring company out of those reviewed. Paragon can even help if you are experiencing credit issues. Further, you can select the invoices to factor, expect competitive advance rates of 80 percent to 90 percent up to $10 million and expect monthly discount rates starting at 1.25 percent to 2 percent.

Visit Paragon Financial Group