Best Factoring Companies

Factoring Companies for Small Business Reviews

Factoring is a type of financing that’s different from a loan. It’s designed to help businesses get through slower periods when cash flow fluctuates or becomes unreliable. A factoring company purchases a business’s outstanding invoices for 75% to 95% of the total value, giving the business immediate cash flow. The customer then pays the total balance to the factoring company, and the company pays the business the remaining invoice amount, minus the factoring fee. To find the best factoring companies, we looked at features, customer support, brand reputation, and more. Take a look at our methodology section to learn more.

FundThrough – Best for Spot Factoring

FundThrough enables invoice factoring faster than other factoring companies, allowing you to get your invoices paid of net terms and streamline cash flow. The AI-powered platform generates custom funding offers and offers unlimited funding based on the size of your eligible invoices. FundThrough does not require any minimum funding after the first invoice, allowing you to choose which customer invoices you factor, and only factor them when needed.

Additionally, it offers a 100% advance, minus the single, agreed-upon fee. FundThrough is willing to find workarounds to make sure invoice factoring works for you. It can integrate with accounting platforms (such as QuickBooks Online, Xero, and OpenInvoice) to easily import invoices. Plus, via FundThrough’s dashboard, you can gain visibility into the status of individual invoices.

FundThrough features

• Fast Turnaround – First funding is received within days, and afterward, you can get funds deposited directly into your bank account within 24 hours.
• Flexible Funding – Choose only the invoices you want to factor (spot factoring), and choose when to factor, receiving unlimited funding for all eligible invoices.
• AR Management – Offers instant access to capital by directing funds directly into your business bank account. Control when you get paid, and increase your credit as you receive smooth, predictable cash flow.
• Credit Checks – Checks your customers’ creditworthiness and sends them a Notice of Assignment (NOA) to ensure they know where to redirect their payments.

How FundThrough pricing works

FundThrough offers 100% advance rates, minus the fee. For total outstanding invoices up to $999,999, FundThrough fees start at 1.9%-2.9% per 30 days. However, for invoices above $1,000,000, FundThrough offers flexible pricing.

What markets does FundThrough serve?

FundThrough serves a wide range of B2B industries, including wholesale, small business, startups, manufacturing, waste management, government, automotive, education providers, medical, export, freight, trucking, and much more.

altLINE – Best for Low Factor Fees

altLINE, a Southern Bank Company, offers invoice factoring, freight factoring, and payroll funding solutions, providing receivable-based funding that lets you get paid faster. altLINE acts as a bank, providing direct funding without the middleman. This allows the company to reduce costs and provide you with funding faster.

altLINE offers easy approval, low rates, and is FDIC insured. Plus, it’s great for startups as its programs don’t require an established operating history. Additionally, it does not incur certain fees that other factoring companies charge, including debtor credit checks, invoice processing fees, and monthly access fees.

altLINE features

• Fast Turnaround – Funding is typically provided within 24 to 48 hours after invoice approval.
• Flexible Funding – As a bank-affiliated lender, altLINE provides more lenient qualification requirements compared to traditional banks, allowing you to get funding for all types of invoices.
• AR Management – Offers accounts receivable management services and manages the collection of invoices directly from customers.
• Credit Checks – Provides complimentary customer credit checks and vetting, as well as a dedicated account manager to assist with customer checks and invoice collections.

How altLINE pricing works

altLINE’s advance rate ranges from 80% to 90%, with an initial fee of 0.5% – 3.0%. It may also have ACH fees between $0 – $3. However, altLINE does not charge any fees for same-day funding, renewals, credit approvals, monthly access, or float days. As a direct lender, it does have an origination fee of $150 to $500.

What markets does altLINE serve?

altLINE services a broad range of industries, including staffing, distribution, consulting, wholesale, oil & gas, janitorial services, freight & trucking, manufacturing, food & beverage, professional services, textiles & apparel, and more.

Riviera Finance – Best for Non-Recourse Factoring

Riviera Finance, as experts in accounts receivable finance, provides complete credit services, invoice processing, and receivables management. It aims to provide you with all the invoice factoring resources you need to meet your business objectives.

Riviera Finance ensures fast delivery of funds within 24 hours. It offers in-person support at key locations across the U.S., but also online services where you can access and manage your account online 24/7. Applying is easy, with no set-up fees or long-term contracts. Riviera Finance promises bad debt protection, as they take on all the credit risk.

Riviera Finance features

• Fast Turnaround – Riviera’s business process is designed to offer immediate responses and fast funding, with a 24-hour funding guarantee.
• Flexible Funding – Allows businesses to choose which invoices to sell without monthly minimums.
• AR Management – Offers full-service AR management, handling invoice processing, credit checks, posting of payments, and collection services.
• Credit Checks – Checks your customers’ credit history quickly, providing you with reports to keep you up to date.

How Riviera Finance pricing works

Riviera Finance’s advance percentages range from 75% to 95%, with no minimums, no due diligence fees, application fees, or maintenance fees. Factoring rates depend on the advance, but for an 80% advance, Riviera lists a 3.98% factoring rate.

What markets does Riviera Finance serve?

Riviera Finance best services in transportation, energy, underground utilities, security guard, temporary staffing, oil & gas, and telecom industries. However, it also supports freight, manufacturing, IT consulting, construction, hospitality, wildfire support, landscaping, and more.

RTS Financial – Best Factoring for Trucking Companies

RTS Financial is a trucking factoring company that provides funding within 24 hours and has no hidden fees. Its easy-to-use mobile and web app allows you to upload your invoices and manage your account online. The RTS Pro app is designed for trucking businesses, providing quick access to fuel discounts, factoring services, broker credit ratings, and trucking software.

RTS Financial’s Fuel Card Program offers substantial savings at over 3,500 locations nationwide, helping you and your truckers save an average of 25¢ per gallon. Similarly, RTS Financial provides point-of-sale fuel discounts at more than 850 Pilot Flying J stations nationwide, allowing you to combine fuel and factoring services at competitive rates. Finally, RTS Financial also provides a line of credit service, up to $3,200 per truck, per week.

RTS Financial features

• Fast Turnaround – RTS Financial lists funding deposits within 24 hours of invoice factoring.
• Flexible Funding – Online app allows you to upload eligible invoices on the go, offering flexibility and no ACH fees for uploading.
• AR Management – Provide cash advances on invoices, handle collections, and offer digital tools to help with accounts receivable management.
• Credit Checks – Provides free credit checks and reports on over 90,000 brokers and shippers to help you find reliable partners.

How RTS Financial pricing works

Offers competitive factoring rates customized to your business needs as well as scalable funding options. While the website does not directly list the advance rates, sources report advances up to 95%.

What markets does RTS Financial serve?

RTS Financial offers factoring specifically for trucking companies, but it can also support oilfield services, staffing, medical, manufacturing, and distribution industries.

eCapital – Best for Reverse Factoring Solutions

eCapital offers flexible invoice factoring solutions, turning unpaid invoices into working capital, helping business owners cover expenses, invest in growth, and maintain operations. eCapital ensures clients have 24/7 control of fund management, improving cash flow and liquidity. It offers limitless capital expansion, instant access to funds, scalable financing, and AR financing. Plus, with reverse factoring services, customers can extend payment terms without earning more debt, and enjoy simple, automated payments.

eCapital also provides freight factoring services for trucking companies, allowing you to boost your fleet’s potential with fast, tailored funding and expert support. Its fuel program lets you spend less on fuel locations across North America with $2.5K in pre-approved credit. eCapital also offers resources to help you save on tires, maintenance, and everyday fleet expenses.

eCapital features

• Fast Turnaround – After invoice approval, funds can be deposited as soon as the same day in most cases.
• Flexible Funding – eCapital offers many funding solutions through non-dilutive financing and customizable services like invoice factoring, payroll funding, and lines of credit.
• AR Management – eCapital provides tailored A/R financing, getting you faster access to cash, improved liquidity, and scalable financing.
• Credit Checks – Offers free, unlimited credit checks through its online portal and mobile app.

How eCapital pricing works

eCapital offers advances between 70% to 95% with factor fees between 1% and 5%. However, some sources say eCapital can advance up to 100%, minus a fee.

What markets does eCapital serve?

eCapital factor services are best for industries in the healthcare, staffing, consumer goods, and transportation sectors.

Scale Funding – Best for Month-to-Month Factoring

Scale Funding supports small to midsize companies in various industries through its invoice factoring services, offering comprehensive credit services, streamlined invoice processing, and accounts receivable management. Scale Funding makes funding a simple process, sending you money in as little as 24 hours.

Scale Funding provides same-day cash on receivables, low factoring fees, month-to-month contracts, a no-fee Visa, and dedicated AR specialists. The Scale Funding team has over 30 years of factoring experience, and staff work with you to create a customized factoring program that supports your business’s needs and cash flow. Additionally, with month-to-month contracts, you’re never locked in for more than 30 days, providing flexibility. Plus, pricing automatically drops as your invoice volume increases.

Scale Funding features

• Fast Turnaround – Same-day funding is possible, especially after the first round of factoring.
• Flexible Funding – ChoScale Funding lets you choose which customer invoices you factor.
• AR Management – A/R management services work with the right individuals to help them stay on top of their obligations, ensuring both parties are paid on time.
• Credit Checks – Offers credit and payment history analysis on all debits and helps you pre-approve new customers.

How Scale Funding pricing works

Scale Funding does not list its fees online, but it has an average advance rate of 80% to 90%, according to available sources. The factoring company offers both monthly contracts and long-term contracts, which include flexible rates.

What markets does Scale Funding serve?

Scale Funding services are ideal for small and large trucking companies and industries in staffing, telecom, oil & gas, horizontal directional drilling, commercial cleaning, and more

Compare the Best Factoring Companies Side-by-Side

What is a Factoring Company?

A factoring company is a financial partner or intermediary that purchases a business’s accounts receivable (like outstanding invoices) at a discounted rate. Simply put, the factoring company advances a percentage of the invoice value, typically 70%-90%, providing a business with immediate cash. The factoring company then assumes responsibility for collecting full payments from customers, and once customers pay, it provides the business with the remaining balance, minus a fee.

Key roles of a factory company:

• Purchasing Receivables—Buy outstanding invoices in exchange for immediate cash.
• Advance Payment—Businesses typically receive 70% to 90% of the invoice value upfront, with the remainder paid after the customer pays.
• Collections—Factoring companies become responsible for collecting the customer payments; they also handle any issues that may arise.
• Risk Management—In non-recourse factoring, the factoring company takes on the credit risk, so if the customer fails to pay, the business is protected from bad debts.

Factoring companies are commonly used by businesses that need to manage cash flow and improve liquidity, reducing the strain of long payment terms.

Different Types of Factoring

There are several types of factoring services available. Below, we provide brief explanations for each type; however, not every factoring company offers every type of service, so when you’re exploring factoring companies, be sure to identify the type of factoring needed so you can find the best partner.

Recourse Factoring

In recourse factoring, the company provides cash advances, but the business remains responsible for whether the customer pays. In the event the customer defaults on a payment, then the business must reimburse the factoring company for the unpaid invoices.

Because the risk remains with the business, this type of factoring typically has lower fees.

Non-Recourse Factoring

With non-recourse factoring, the factoring company assumes the risk of non-payment, not the business. This means that if the customer defaults, the company absorbs the loss, protecting your business from bad debts. However, because of this risk, non-recourse factoring usually carries higher fees.

Domestic Factoring

Domestic factoring is when all parties (the business, the customer, and the factor) are all in the same country. This type of factoring often makes the process more straightforward as legal, cultural, and financial practices are similar and easier to navigate.

Export Factoring

Export factoring is for when businesses are involved in international trade. The factoring company must deal with international receivables and additional risks and complexities of cross-border transactions. Additionally, there may be another party member, known as the import factor, located in the customer’s country, adding another layer of complexity. Export factoring requires knowledge of global networks and international factors like currency fluctuations and differing legal systems.

Full-Service Factoring

Full-service factoring is when the factor manages the sales ledger, sends account statements, collects payments, assesses customer credit, sets credit limits, and arranges credit insurance to protect the business from any risk. However, due to the range of services offered, this type of factoring tends to have high interest rates and administrative fees, often ranging from 0.5% to 2.5% of the total receivables.

Reverse Factoring

Also known as supply chain finance, reverse factoring is a process in which a buyer (customer) establishes a relationship with a factoring company. This allows the supplier to get paid immediately while extending the buyer’s payment terms. This type of factoring is often done when the buyer is a larger company and the supplier is a small- to medium-sized business.

How to Choose a Factoring Company

To find the best factoring company for your small business, look for factors that are industry experts, prioritize transparency, and offer flexible terms.

Consider these aspects when choosing a factoring company:

• Funding Qualifications: Factoring companies typically assess the creditworthiness of your customers, not your business. Look for factors that offer more favorable terms for your type of customer.
• Advance Rates: Advance rates typically range from 70% to 90% of the total invoice value, but some providers may offer up to 95%, so compare rates across different companies.
• Factor Fees: Factoring fees can be high, especially for businesses with less creditworthy customers, so keep that in mind when researching factors.
• Recourse vs. Non-Recourse Agreements: The type of factoring influences whether your business or the factoring company assumes the risk of defaulted payments.
• Customer Relationships: Because the factoring company takes over collections, how it handles customer interactions is vital, and unprofessional interactions could strain your business’s relationship with your customers, so seek out providers with good reputations.

Benefits of Invoice Factoring

Invoice factoring is highly advantageous for businesses, enabling immediate working capital and the ability to fund growth without incurring debt. The key benefits of invoice factoring include:

• Improved Cash Flow: Invoice factoring companies provide immediate cash, allowing businesses to invest in growth and cover operational expenses without waiting for customer payments.
• Growth Support: With immediate access to cash, businesses can confidently take on larger projects, enter new markets, or purchase inventory.
• Outsourced Collections: Factoring companies take over the collection process, freeing up time for the businesses and allowing them to focus on core business activities.
• Scalable Funding: With faster access to cash, invoice factoring helps businesses increase their sales volume, allowing more funding for business growth.
• No Additional Debt: Since factoring is not a traditional business loan, it doesn’t add debt to your balance sheet.
• Credit Risk Management: In non-recourse factoring, the factor provides protection against customer defaults, helping you manage credit risk more effectively.

Overall, factoring is particularly beneficial for B2B companies with slow-paying customers. Even with included fees, the speed at which businesses receive funds and with non-recourse options make invoice factoring a secure and effective solution for improving cash flow and managing credit risks.

How Much Do Factoring Companies Cost?

The way factoring pricing works is a little different than other B2B services. The main costs are the factoring fees or the rate. Factoring companies charge a fee for their services, ranging from 1% to 5% on average. These fees are a percentage of the invoice value and often depend on the creditworthiness of the customers, the volume of receivables, and the length of the payment term. The factoring cost is the total sum of money spent to acquire funding.

Some factoring companies may have extra charges for additional services like credit checks, currency conversion, or managing the collections process.

Factoring Companies FAQs

What is a typical factoring fee?

The average typical factoring fee ranges between 1% and 5% of the invoice value per 30 days. However, rates depend on the industry, invoice volume, and customer creditworthiness, and rates for high-volume, low-risk businesses often fall between 1.5% and 3%.

What are the downsides of factoring?

While factoring has many advantages, there are some downsides to consider. The biggest ones are high fees and loss of or reduced control over customer relationships. Because the factor handles collections, they are the ones interacting with customers, and if the factoring company does not manage the relationship professionally, it risks damaging your business’s reputation and customer relationships.

How do I choose the best factoring company for my business needs?

Choosing the best factoring company for your business involves considering the type of factoring offered, advance rates, any additional fees, the type of agreement, and contract flexibility. Overall, you want a factoring company that has experience in your industry and provides the support you need.

How We Chose the Best Factoring Companies

We compiled a list of 17 factoring companies on the market and narrowed our focus to 10 reputable providers with significant online search volume. From there, we chose 6 lenders that stood out for their features, customer support, brand reputation, and more.

We collected and verified information from multiple sources, including:

We scored each company on a scale of 1 (poor) to 5 (excellent) across the following criteria, each worth 25% of our total score:

• Variety of features: We looked for companies that offered fast cash turnarounds, flexible funding terms, debt protection, accounts receivable management, and credit check reports. Companies that offered additional industry-specific services, such as fuel cards and lines of credit, earned more points.
• Pricing and transparency: We looked for factoring companies with clear fees and decent advance rates; those with transparent rate information scored higher.
• Onboarding and support: We selected companies that offered multiple types of ongoing customer support, and whether onboarding was included or only available as an add-on service.
• Brand reputation: We gathered data about customer reviews and ratings published on trustworthy third-party review sites to get a sense of each vendor’s reputation.