Maintaining healthy cash flow is a challenge for businesses of all sizes. Late payments, long invoice cycles, and seasonal fluctuations can leave even thriving companies short on working capital. Invoice financing and factoring companies have emerged as essential partners, providing immediate access to funds tied up in unpaid invoices. By turning outstanding receivables into cash, these firms help businesses bridge gaps, seize growth opportunities, and operate with confidence.
What Is Invoice Financing and Factoring?
Invoice financing and factoring are financial services that allow businesses to sell or borrow against their unpaid invoices. In invoice factoring, a company sells its accounts receivable to a third party (the factor) at a discount. The factor advances a significant portion of the invoice’s value—often up to 90%—and handles collection from the customer. Once the invoice is paid, the business receives the remaining balance, minus a fee.
Invoice financing, sometimes called invoice discounting, is slightly different. Here, businesses use their invoices as collateral to secure a loan or line of credit, retaining responsibility for collecting payment from customers.
Why Use Invoice Financing or Factoring?
Improved Cash Flow: Immediate access to funds helps cover payroll, inventory, and operating expenses.
Flexible Funding: Advance rates and contract terms can be tailored to business needs.
No New Debt: Factoring is not a loan, so it doesn’t add to your balance sheet liabilities.
Growth Enablement: Quick funding can support expansion, new projects, or bulk purchasing.
Top Invoice Financing & Factoring Companies
The market for invoice financing and factoring is competitive, with several standout providers offering unique benefits and flexible terms:
altLINE
Backed by The Southern Bank, altLINE is known for low factoring fees (as low as 0.5%), same-day funding, and advances up to 90% of invoice value. With transparent terms and a reputation for reliability, altLINE is ideal for businesses seeking large advances and bank-backed stability.
BlueVine
BlueVine offers fast approvals and low rates, making it a favorite for small to medium-sized businesses. Funds can be available in as little as 24 hours. BlueVine requires at least three months of business history and a minimum monthly revenue, but its streamlined process is a major draw.
FundThrough
FundThrough integrates with popularaccounting software, allowing businesses to manage and factor invoices online. It offers advance rates up to 100% (minus fees) and provides funding recommendations within one business day. This platform is especially useful for businesses looking to automate their invoice management.
eCapital Commercial Finance
eCapital provides non-recourse factoring, which means businesses are not liable if their customers don’t pay. With no minimum credit score requirements and same-day funding, eCapital is a flexible solution for companies concerned about risk or credit issues.
Riviera Finance
Riviera Finance is known for its guaranteed credit, non-recourse factoring, and quick payments—up to 95% of invoice value. Its online receivable management system offers real-time alerts and easy account monitoring, making it a solid choice for companies that value transparency and fast access to funds.
Scale Funding (formerly TCI Business Capital)
Scale Funding stands out for its flexible contracts, including month-to-month and annual options. Advance rates reach up to 90%, and businesses can benefit from discounted rates when factoring higher volumes. The company works with a variety of industries, including those with less-than-perfect credit.
Resolve
Resolve offers a unique blend of invoice factoring and net terms management. It pays invoices directly to your bank account within a day, approves credit limits quickly, and provides a branded payment platform that integrates with accounting software. This is ideal for B2B businesses seeking a seamless, customer-friendly solution.
What to Consider When Choosing a Provider
Advance Rates and Fees: Compare how much you’ll receive upfront and the total cost.
Funding Speed: Some companies offer same-day funding; others may take longer.
Contract Flexibility: Look for providers with month-to-month options or no long-term commitments.
Recourse vs. Non-Recourse: Decide if you want to retain liability for unpaid invoices.
Customer Service: Access to real representatives and online tools can make a big difference.
Integration: Some platforms sync with accounting software for easier management.
Conclusion
Invoice financing and factoring companies are invaluable partners for businesses seeking to unlock cash flow and drive growth. By choosing the right provider, companies can access fast, flexible funding without taking on new debt or waiting for slow-paying customers. With a range of options available, from bank-backed firms to tech-driven platforms, there’s a solution for every business need.