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Invoice Factoring

Invoice Factoring Companies: The Best Options [And How to Choose]

If you enter the phrase “invoice factoring companies” into a search engine, you’ll get results for ads, review sites, and links to multiple invoice factoring companies as well as several best factoring company lists. These can all be helpful resources for making a decision. However, while these articles stack up different factoring companies in an easy-to-digest format, they don’t tell you which aspects that they compare really matter most.

That is why we’re giving some context ahead of our own short list of factoring companies we’re comparing. For example, what matters more when choosing a factoring company, the funding limits or the advance rate? The answer is that it depends on your situation, and we’ll explain how different aspects of your situation influence what characteristics matter most. 

But before we dive into the deeper topics, let’s review what this form of financing is and the general factoring process.

What is an invoice factoring company?

An invoice factoring company is an organization that specializes in funding outstanding invoices as a form of alternative finance. They give you funding in days for an invoice that’s due in 30, 60, or 90 days, less a fee speeding up your cash flow. The invoice factoring company then collects the money from customers, making it easier for businesses to access short-term working capital without relying on traditional bank loans.

Advance rates between 80% to 100% of the invoice, minus the discount rate, which can range from 1% to 6%. (This is the amount the factoring company keeps from your invoice and is different from fees like service fees or application fees.)  Furthermore, factoring transactions can be as short as same-day funding or can take several days. It’s also important to note that invoice factoring is sometimes referred to as accounts receivable factoring.

Since invoice factoring companies are not offering business loans but advance payments on unpaid invoices, businesses using this solution won’t add to their debt. Factoring doesn’t affect your credit score, either, since it doesn’t require you to pass credit checks.

This type of financing is often used when a business is experiencing cash flow issues or is looking to grow.

How do I choose an invoice factoring company?

No matter what business service you want to evaluate, you need standardized categories to judge solutions effectively. Reviewing factoring companies by looking at common features, such as the funding limits, costs, and required commitment, can help you find which solution makes sense for your business.

Since factoring company operations vary, what works for your business may not work for someone else.

To make things easier, we’ve listed the main features you should evaluate below along with how important they are based on your situation:

  • Funding limit. If you either have a large invoice, are in an industry where the invoices are large, want the flexibility to fund multiple invoices a month, or you’re not sure how much funding you’ll need in the future for growth projects or other needs, you’ll want to pay attention to funding limits. And this can be a wide range. Funding amounts can be as little as $500 to unlimited funding. 
  • Advance rate. How much of the invoice does the company give you upfront? Many factoring companies advance 80% to 95% and pay you the remaining balance minus the fees when your client pays their invoice. If you need a certain amount of funding to meet financial obligations, you’ll need to ensure you’ll actually get that dollar amount with a high enough advance rate. 
  • Factoring fees. Of course, we all care about how much a service will cost and finding competitive rates. When you’re evaluating the cost of factoring, make sure you check for hidden fees on top of the discount rate (the percent that the factoring company keeps for their fee.) A low discount rate could mean there are hidden fees, like service fees or application fees. You’ll also want to scan the factoring terms and conditions for potential termination fees and transaction fees. It’s also important to assess the value you’re getting for the total invoice factoring cost: Will you get dedicated account management? An online portal where you can manage your funding and get reports? How fast is the customer service response time? Do the reviews suggest its a reliable factoring company?
  • Level of commitment. Some factoring providers require you to sign a factoring contract that says you have to get all invoices for a certain client funded. Others will let you factor only the invoices you choose. In some cases, you may be allowed to select the unpaid invoices for factoring, but you’ll have to sign a 6-month or annual contract. If you need funding regularly, long-term contracts could save you time. If you need flexibility, looking for a company that lets you choose which invoices get funded is the way to go. 
  • Experience. This refers to how long the factor has been in business and their experience with your particular industry. Working with an invoice factoring provider that knows about invoicing and payment terms in your industry can save you the work of explaining nuances and increases the odds that they can work with you. For example, trucking companies have different needs than staffing companies – and factoring providers who have worked companies like yours understand the nuances. However, factoring companies that are new or haven’t worked in your industry can do a fine job, too. This depends on how complex invoicing and payments are in your industry.  
  • Approach. Some factoring companies were based on a manual application and payment process. As a result, they have added technology into their funding experience bit by bit. For example, they may have an online application for quotes but no online portal to manage factored invoices. Others have technology as the basis of their approach. The important point here is to look at how efficient the factoring process appears. The last thing you want is to go back and forth forever on paperwork. This is also important for evaluating how quickly they can actually get capital to you. After all, speed is one of the main benefits of business factoring. If a factoring company can’t get funding to you in days upon approval, you might want to consider faster options.
  • Recourse vs non-recourse. Recourse factoring is almost the default setup in North America. Essentially, if the factoring company can’t collect payment from your customer, then the company has the right to request payment from you. With non-recourse factoring, you’re not responsible if your customer doesn’t pay. The difference between these two business funding solutions is that non-recourse factoring is usually more expensive than recourse factoring. If you are concerned that your client won’t pay their invoice, non-recourse is worth considering. But if your client has a strong history of paying every time, on time, you might benefit from the lower cost of recourse factoring. 


List of Invoice Factoring Companies: Our Top Picks


Factoring Fee: 2.75% per 30 days

Advance Rates: 100% of the invoice amount

Funding Limits: Unlimited

Because this list includes companies that can help you fund your business (a.k.a. the best invoice factoring companies), we’d be remiss if we didn’t mention how we can help, too. You can fund invoices up to any amount with no limit. (We’ve funded invoices in the millions of dollars plenty of times – true story!)

We offer:

  • 100% advance rates
  • No limit to how much you can fund
  • No monthly minimums
  • Selective factoring – you choose what invoices to fund
  • An AI-powered platform that integrates into QuickBooks
  • Support for a range of industries
  • No hidden fees

And while we believe in being a partner for the long haul, we don’t require a long-term commitment after your customer pays their invoice. Just a fast, flexible, easy source of working capital whenever you need it.

Take a look at our invoice funding solution and see if you qualify. We work with businesses based in both Canada and the U.S.


Factoring Fee: 4.66% – 8.99% + Potential penalties for late payments and a $6 non-sufficient funds fee

Advance Rates: Up to 100% of the invoice amount or up to $150,000 with their line of credit.

Funding Limits: $150,000

Founded in 2013, Fundbox factoring and lines of credit uses analytics, engineering, and predictive modeling to increase cash flow for small businesses. They boast 500,000+ small business customers with $3 billion funded to small businesses since their launch. If your cash flow needs typically run less than $150,000, their funding options might make sense for your needs.

They offer a few different funding options including a revolving line of credit up to $150,000, a Flex Pay product, and Fundbox Plus membership. Benefits include 20% lower fees, more time to pay, and more.

The fees on their revolving line of credit run about 4.66%-8.99% over the repayment term – which is either 12 or 24 weeks. To qualify, your business will need to:

  • Be based in the U.S.
  • Have $100,000+ in annual revenue
  • Have a business checking account
  • Be in business 6+ months
  • Personal credit score 600+

The Flex Pay product allows business to pay for important business expenses they do not want to (or cannot) put on a credit card. Flex Pay can be used for payroll, insurance, taxes, raw materials, inventory, leases, and more. There is a processing fee if you want to repay the balance with a credit card. To qualify, you must:

  • Have a Fundbox line of credit
  • Connect your business checking account
  • Repay within 3 days or your line or bank account will be debited

TCI Business Capital

Factoring Fee: Not disclosed

Advance Rates: Up to 90%

Funding Limits: $50,000 to $20,000,000

Founded in 1994, TCI Business Capital is one of the largest invoice factoring companies in the United States. Their services are tailored to small businesses that need quick access to cash. In some cases, it may be possible to get same-day funding.

This accounts receivable factoring solution does not disclose its fees publicly, and you would need to submit a quote request to get an estimate. They have a long track record from being in the business for nearly 30 years.

In addition, this company does highlight industry-specific knowledge, particularly in the trucking industry, oil and gas, and staffing agencies.


Factoring Fee:  Not disclosed

Advance Rates: Up to 95%

Funding Limits: $30,000,000

E-Capital is an online invoice factoring company that provides cash advances of up to 95% of the invoice amount, with flexible repayment terms as short as 30 days. We couldn’t find information on fees, so it would be important to discuss them if you request a quote.
While E-Capital offers funding for all industries, they specialize in freight factoring. This includes serving freight brokers, intermodal and container freight companies, long-haul transportation carriers, and others in the transportation industry.  Depending on your relationship with your customer, you may be eligible for non-recourse funding.
It’s important to note that E-Capital is not solely a factoring company. They also provide additional features and services, such as lines of credit, asset-based lending, credit cards, and trucking industry software.


Factoring Fee: 6.5-19% of every sale until payment is complete

Advance Rates: Up to 100% of the amount

Funding Limits: $20,000,000

ClearCo is a lending firm (founded by founders for founders) that specializes in revenue share agreements with startups that don’t require giving away equity or ownership. With more than $3 billion invested in 7,000+ businesses, they claim to be the world’s largest e-commerce investor.

To qualify, you’ll need to connect your e-commerce store about that provide ClearCo with insights into your business. They’ll use revenue from the past 6 months to generate funding offers. Within 48 hours, you’ll get your approved funding capacity. ClearCo charges a weekly fee for you to repay the invoice yourself as opposed to your customer. 

To qualify, you must:

  • Be an e-commerce or consumer SaaS company
  • Have 6+ months of revenue greater than $10K/month
  • Be incorporated in Canada, USA, Australia, United Kingdom, Ireland, Belgium, Germany, Finland, Austria, or the Netherlands


Riviera Finance

Factoring Fee: 2% and up for 30 days, plus 24% APR

Advance Rates: Up to 95%

Funding Limits: $2,000,000

Founded in 1969, Riviera Finance is another well-known factoring firm that services the United States and Canada. While you will need to apply to get a better idea of the factoring fee, Riviera does not require an application fee and offers online account management.
Unlike other factoring options, Riviera Finance doesn’t require a long business history — only that you have accounts receivable to factor. They require a 6-month minimum factoring agreement, making them more of a long-term commitment than other providers.
As with most factoring companies, Riviera Finance’s eligibility requirements depends more on having creditworthy customers than your own credit history. However, it often helps to have a business history of at least 3 months.


Factoring Fee0.5%-3%, with incremental increases to 5% + initial filing fee of $350 – $500 + origination fee of 0.25% – 2.5%.

Advance Rates: Up to 90% of the invoice amount

Funding Limits: $4,000,000 a month

A division of The Southern Bank Company, altLINE offers invoice factoring and A/R financing for a variety of industries, though their focus is mainly on staffing and consulting. Because they are owned by a bank, they are a direct source of cash, enabling them to cut out some extra borrowing fees that other factoring companies sometimes require. If you’re more comfortable working with a community-based bank, altLINE could be the partner you’re looking for.

For invoice factoring through altLINE, you’ll need to submit an application, which includes some basic information about yourself and your business. Fees through altLINE start at 0.5%, and they’ll advance up to 90% of an invoice’s value. There’s no application fee, ACH fee, or any other one-time fee outside of the initial filing fee and the origination fee.

Their A/R financing uses a similar application process. Rates start from 0.5%.

Want to get started with FundThrough?

If you think we’re one of the best invoice factoring companies for you on this list, get started by seeing if you qualify. You can connect your QuickBooks, OpenInvoice, or WorkBench account, or upload your invoices to start funding an invoice today.

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