With non-recourse factoring, if a company fails to pay an invoice, the borrower is not held liable by the factoring company. It’s more challenging to qualify for non-recourse factoring solutions because businesses typically need a higher invoice volume and customers with stellar credit. While most factoring companies will offer non-recourse factoring to their top customers, we’ve selected the five best options for small business owners.
Top Non-recourse Factoring Companies
Provider | Best For |
|---|---|
Combination of cost and terms | |
Funding up to $20 million | |
Low rates on short-term invoices | |
Advance rates up to 95% | |
Low minimum qualifications |
How We Evaluated Non-recourse Factoring Companies
When evaluating factoring companies, we first selected companies that offer non-recourse factoring to their customers. We then considered the overall cost and terms that each of these companies offered. Finally, we put the least emphasis on the funding speed and minimum qualifications because, to qualify for non-recourse factoring, you need to meet a high minimum annual revenue requirement.
Paragon Financial: Best Overall
 | |||
Maximum Funding | $10 million | Advance Rate | 80% to 90% |
Discount Rate | 1.25% to 2.5% per 30 days | Minimum Annual Revenue | $360,000 |
Expected APR | 16% to 55% | Funding Speed | Up to 10 days |
Paragon Financial offers non-recourse invoice factoring to certain customers. While the minimum qualifications stated above are for regular factoring contracts, you can typically expect non-recourse factoring to require much higher invoice volumes and debtors who can demonstrate high creditworthiness.
Triumph Business Capital: Best for Big Funding Needs
| |||
Maximum Funding | Up to $20 million | Advance Rate | 90% |
Discount Rate | 1% to 4% per month | Minimum Annual Revenue | $100,000 |
Expected APR | 12% to 72% | Funding Speed | Up to 7 days |
Triumph Business Capital made our list of the top non-recourse factoring companies because it offers a substantial amount of funding. It also has a low minimum annual revenue requirement so that some small business owners may qualify for funding initially and, as the business grows, qualify to convert their contracts to a non-recourse contract.
Triumph Business Capital Review
altLINE: Favorable for Short Repayment Terms
 | |||
Maximum Funding | $5 million | Advance Rate | 90% |
Discount Rate | 0.75% to 3.0% per 30 days | Minimum Annual Revenue | $360,000 |
Expected APR | 9% to 55% | Funding Speed | Up to 7 days |
altLINE is a great provider of non-recourse invoice factoring for small business owners who want a solution with short payment terms. The way altLINE structures its fees makes it advantageous for invoices that are repaid within 30 days. For a small business that has a high-quality debtor that pays invoices quickly, altLINE would be the best solution.
Factor Funding Company: High Advance Rates
 | |||
Maximum Funding | $10 million | Advance Rate | 70% to 95% |
Discount Rate | 1% to 5% per 30 days | Minimum Annual Revenue | $120,000 |
Expected APR | 12% to 85% | Funding Speed | Up to 7 days |
The Factor Funding Company offers small business owners a higher advance rate than other invoice factoring providers on our list. Business owners seeking non-recourse invoice factoring can receive up to 95% of the value of an invoice. However, in practice, non-recourse contracts typically offer a lower advance rate to help the factoring company offset some of the risks.
1st Commercial Credit: Easy-to-Meet Qualifications
 | |||
Maximum Funding | $10 million | Advance Rate | Up to 95% |
Discount Rate | 0.69% to 1.59% + fees | Minimum Annual Revenue | Undisclosed |
Expected APR | 12% to 65% | Funding Speed | Up to 5 days |
1st Commercial Credit is an established provider that earned itself a reputation for its flexibility around providing funding to less qualified borrowers. According to recent reviews, it’s important to understand the various fees it discloses in a factoring contract. In some cases, the company reports that small business owners can receive non-recourse factoring, but you’ll need to contact the lender directly for more information.
Bottom Line
While getting non-recourse factoring can be more challenging than other forms of financing, it also protects the business owner from downside risk. The best way to qualify for non-recourse factoring is by establishing a long-term relationship with a factoring provider so that the history of payments from debtors can easily be referenced when you request a non-recourse contract.
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