5 Best Invoice Factoring Companies in 2022
Tom has 15 years of experience helping small businesses evaluate financing and banking options. He shares this expertise in Fit Small Business’s financing and banking content.
This article is part of a larger series on Business Financing.
Businesses use invoice factoring to convert unpaid invoices into immediate cash through an advance of up to 90% of the invoice amount. We reviewed several invoice factoring companies, considering funding time, rates, terms, and customer service. Based on our research, here are our recommendations for the five best factoring companies.
FundThrough: Best for Quick Application & Funding
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Maximum Funding | $5 million | Advance Rate | Up to 90% |
Discount Rate | Starts at 2.5% per 30 days | Minimum Annual Revenue | None |
Expected APR | 30% to 60% | Funding Speed | 24 hours after approval |
Why we like FundThrough: FundThrough’s application, funding, and invoice factoring portals are quick and easy to use. Businesses don’t need to have a minimum amount of revenue or time in business to qualify. FundThrough offers up to $5 million in factored invoice financing, advancing up to 90% of your invoices, and can meet the needs of businesses of any size.
Riviera Finance: Best for Fast Funding—Great for Trucking Companies
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Maximum Funding | $2 million | Advance Rate | Up to 95% |
Discount Rate | Starts at 2% per 30 days | Minimum Annual Revenue | None |
Expected APR | 24% to 70% | Funding Speed | 24 hours after approval |
Why we like Riviera Finance: Riviera Finance offers funding within 24 hours of approval (which can take up to seven days) and will advance up to 95% of your invoices. Riviera Finance also offers nonrecourse factoring, which means you don’t have to repurchase an invoice if a customer fails to pay. While nonrecourse factoring can yield a higher discount rate, it does offer protection. Riviera also specializes in freight bill factoring, which can come in handy for trucking companies in need of some cash flow assistance.
altLINE: Best for Short-term Invoice Factoring
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Maximum Funding | $4 million | Advance Rate | Up to 90% |
Discount Rate | 0.75% to 2.5% for the first 30 days | Minimum Annual Revenue | $180,000 |
Expected APR | 6% to 55% | Funding Speed | Two days |
Time in Business | None | Minimum FICO Score | 500 |
Why we like altLINE: altLINE is good for businesses with net terms of 30 days or less that need up to $4 million. altLINE offers lower rates for shorter terms; if invoices are paid in less than 30 days, business owners may receive a discount rate as low as 0.75%. That discount rate is the lowest offered by the factoring companies we reviewed. altLINE does require a one-year commitment.
TCI Business Capital: Best for No Long-term Contracts
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Maximum Funding | $20 million | Advance Rate | Up to 90% |
Discount Rate | 1% to 4% per month | Minimum Annual Revenue | $600,000 |
Expected APR | 12% to 55% | Funding Speed | Up to three days |
Why we like TCI Business Capital: TCI Business Capital offers the flexibility of a month-to-month contract. Most invoice factoring companies will require a multimonth or longer agreement. TCI also reevaluates the discount rate it charges a business every month to see if it can be reduced. If factoring volume increases or customers pay their invoices quicker, the discount rate may decrease. The maximum advance that TCI will provide is among the highest with factoring companies; however, it also has the highest minimum annual revenue of the companies we surveyed.
Triumph Business Capital: Best for Nonrecourse Factoring
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Maximum Funding | Up to $20 million | Advance Rate | Up to 90% |
Discount Rate | 1% to 4% per month | Minimum Annual Revenue | $100,000 |
Expected APR | 13% to 55% | Funding Speed | Up to seven days |
Time in Business | 1 year | Minimum FICO Score | 500 |
Visit Triumph Business Capital
Why we like Triumph Business Capital: Triumph Business Capital offers both recourse and nonrecourse factoring. Triumph Business Capital offers advance rates up to 90%, factoring capacity of up to $20 million, and monthly discount rates as low as 1% to 4%. Unlike many other invoice factoring companies, Triumph requires that businesses have been operating for a year and that their owners have at least a FICO score of 500 to qualify.
How We Evaluated Invoice Factoring Companies
When evaluating factoring companies, we considered the overall cost and terms that each of these companies offered. Those considerations included discount rate, advance rate on each invoice, and speed in receiving funding, followed by requirements, such as credit score and the time that a business needs to be in operation. Each of these providers also has positive customer service reviews through the Better Business Bureau (BBB) and online reviews.
Bottom Line
Invoice factoring is a good option for businesses that need to cover cash flow gaps while awaiting customer payments. Businesses that haven’t been in operation for very long, as well as those with poor credit, can qualify provided their customers have a history of paying invoices on time. Many invoice factoring companies also provide valuable services, such as accounts receivable (A/R) management and collections, at no additional cost. The best factoring companies we reviewed are good options for small businesses.
