Best Invoice Factoring Companies in January 2026
Factoring companies provide advance funds for your business by purchasing outstanding invoices.
| Lender | Best for… | Funding limits | Advance rate | Factor rate (discount rate) | Time to funding | |
|---|---|---|---|---|---|---|
 | Startups | Up to $5,000,000 | Up to 90% | 0.75% to 3.50% | Same day | |
 | Software integration | None | 100% | 2.20% to 3.00% | Next business day | |
 | In-person factoring | Up to $2,000,000 | 95% | 2.00% to 5.00% | 24 hours | |
 | Trucking businesses | None | 97% | Not specified | Within 24 hours | |
 | Fast funding | Up to $30,000,000 | Up to 90% | 1.00% to 5.00% | Same day | |
 | Large invoices | Up to $20,000,000 | Up to 95% | 0.55% to 2.00% | 24 hours | |
 | Month-to-month contracts | Up to $30,000,000 | Up to 90% | Not specified | 24 hours |
Factoring companies at a glance
Best for: Startups –altLINE
Funding limits: Up to $5,000,000
Advance rate: Up to 90%
Invoice factoring fees: 0.75% to 3.50%
Pros
- Funds established businesses and startups
- Supported by an established banking institution
- Factor rates start as low as 0.75%
Cons
- Charges an origination fee (Typically $150 to $500)
- Runs a background and credit check on all applicants
altLINE works with all business types, including startups and companies with poor or limited credit. While altLINE runs a background and credit check on all applicants, same-day funding is available for those who qualify.
If you don’t qualify for altLINE’s invoice factoring services, the company will help you find a startup factoring company that meets your needs.
Learn more about altLINE.
Best for: Software integration –FundThrough
Funding limits: None
Advance rate: 100%
Invoice factoring fees: 2.20% to 3.00% per 30 days
Pros
- Automatically syncs with QuickBooks or OpenInvoice
- Offers next-day funding
- Covers 100% of invoice value
Cons
- Doesn’t disclose factoring fees beyond 30 days
- No construction or real estate invoices
FundThrough integrates with accounting software like QuickBooks and OpenInvoice to sync invoices and create funding offers. While the company doesn’t disclose the factoring fees it charges if your invoices go unpaid for more than 30 days, you can get up to 100% advance rates on them.
Plus, there are no long-term contracts required to use FundThrough’s invoice factoring services.
Learn more about FundThrough.
Best for: In-person factoring – Riviera Finance
Funding limits: Up to $2,000,000
Advance rate: 95%
Invoice factoring fees: 2.00% to 5.00%
Pros
- Multiple offices throughout the U.S. and Canada
- Only requires a UCC filing on accounts receivable
- No origination fees
Cons
- Website lacks details about factoring fees
- Standard term of six months
- May not accept invoices with terms exceeding 60 days
For business owners who prefer in-person support, Riviera Finance offers more than 25 invoice factoring offices throughout the U.S. and Canada, in addition to online factoring services for all 50 states. Plus, if you need funds fast, Riviera Finance guarantees payment within 24 hours of verifying and approving your unpaid invoices.
Unfortunately, Rivera’s website doesn’t provide much detail on its fees, which can make budgeting difficult. Plus, the company may accept invoices with terms exceeding 60 days.
Learn more about Riviera Finance.
Best for: Trucking businesses – RTS Financial
Funding limits: None
Advance rate: 97%
Invoice factoring fees: Not specified
Pros
- Fuel discounts available
- Funding available within 24 hours
- Discounts for U.S. veterans
Cons
- Only serves trucking companies
- Must apply via contact form and phone call
- Lack of transparency about factoring fees
Factoring with RTS Financial can help your trucking business cover expenses like fuel and maintenance when you can’t afford to wait for customer payments.
With RTS Financial, you can receive up to 97% of your unpaid invoices with same-day funding. In addition, RTS Financial offers competitive pricing and fuel savings at over 3,500 locations throughout the U.S.
Learn more about RTS Financial.
Best for: Fast funding – eCapital
Funding limits: Up to Up to $30,000,000
Advance rate: Up to 90%
Invoice factoring fees: 1.00% to 5.00%
Pros
- Offers same-day funding
- Non-recourse invoice factoring
Cons
- Must apply via contact form or phone call
- Slightly higher fees with non-recourse factoring
- Website doesn’t list the criteria needed to qualify or funding limits
If you need fast funding, eCapital aims to verify and pay your unpaid invoices within the same day, as long as you submit before 10 a.m. eCapital is devoted to helping businesses grow and thrive, providing flexible finance options to suit your needs.
Additionally, eCapital offers non-recourse invoice factoring, meaning you can still get paid even if your customer never pays. However, this option comes with slightly higher fees.
Learn more about eCapital.
Best for: Large invoices – Universal Funding Corporation
Funding limits: Up to $20,000,000
Advance rate: Up to 95%
Invoice factoring fees: 0.55% to 2.00% (first 30 days)
Pros
- High invoice credit limits
- Funding within 24 hours
- A+ rating on Better Business Bureau
Cons
- Doesn’t list specific eligibility criteria
- Doesn’t list factor rates beyond 30 days
- You have to buy back or swap invoices if the customer fails to repay
Universal Funding Corporation provides up to $20,000,000 a month toward your unpaid invoices, allowing you to cover payroll, vendors and other critical expenses. With no hidden fees, fast funding times and positive online reviews, you can rest assured that you’re getting high-quality service with Universal Funding Corporation.
At the same time, though, the company is not very open about its eligibility criteria, which can make it hard to tell if you qualify. Plus, it requires you to buy back your old invoices if they remain unpaid past 90 days.
Learn more about Universal Funding Corporation.
Best for: Month-to-month contracts – Scale Funding:
Funding limits: Up to $30,000,000
Advance rate: Up to 90%
Invoice factoring fees: Not disclosed
Pros
- Offers month-to-month financing and longer-term contracts
- Same-day funding available
- Provides support from dedicated specialists
Cons
- Doesn’t disclose qualification requirements or fee amounts
- Fee structure may be confusing
- $50,000 funding minimum
If your invoice amounts and funding needs fluctuate often, consider Scale Funding. They offer the option to choose month-to-month financing, as well as longer-term contracts. In addition, same-day funding is available, allowing you to access fast funding when you need it most.
While the company isn’t very forthcoming about its rates and fees on its website, you can work with a dedicated specialist to create a custom quote that suits your needs.
Learn more about Scale Funding.
What is a factoring company?
Invoice factoring helps businesses convert unpaid invoices into cash. You sell outstanding business invoices to a factoring company and get a percentage of the invoice’s value upfront.
The factoring company is responsible for collecting the invoice payment on your behalf, allowing you to focus on your immediate business needs.
You will receive the rest of the money once your client pays their invoice directly to the factoring company, minus the factoring fee (also known as the discount rate).
How invoice factoring works
Invoice factoring works by selling your business’s outstanding accounts receivable (typically unpaid invoices) to a factoring company. Here’s an overview of how the process works:
-
Find the right company
You must first find a factoring finance company to work with, meet their eligibility requirements and then submit any unpaid invoices for review. -
Receive your advance rate
Once the invoices have been accepted, the factoring company pays you an initial percentage of the invoices’ total value, known as an “advance rate.” The advance rate typically falls somewhere between 80% to 95% of the invoice’s face value. -
Wait for the factoring company to collect payment
After paying out the advance rate, the factoring company will then send out a notice of assignment to your customers, which is a document that explains that they are managing your invoices and lets your customers know to pay them directly going forward. -
Pay the factoring fee
Once an invoice has been paid, you’ll receive the remaining balance minus the factoring company’s service fee. This fee is commonly called a “factor rate,” but it can also be called a “discount rate.” Rates can vary, but this fee typically ranges between 1% to 5% of the invoice’s value.
Invoice factoring example
Finn is a freelancer who has decided to sell $10,000 worth of unpaid invoices to a factoring company. The company pays a 90% advance rate and charges a 3% factoring fee.
Since the company pays a 90% advance rate, Finn receives a $9,000 payment upfront after his invoices have been accepted.
After the 30-day invoice term is up, all his customers have paid the factoring company in full, so Finn receives the remainder of his payment. He receives $700, which is the remaining $1,000 due minus the $300 (3% of $10,000) factoring fee.
Invoice factoring and invoice financing sound alike, but they leverage your accounts receivable in different ways.
With invoice factoring, you sell your outstanding invoices to a third-party company for a portion of the face value. The company then handles collecting customer payments on your behalf. Since the factoring company deals directly with your customers, you typically don’t need a good credit score to qualify.
In contrast, invoice financing (also called accounts receivable financing) is when a lender uses your invoices as collateral for a secured business loan. Payment still needs to be collected for your outstanding invoices, with the funds used to repay the business loan. Like other types of small business loans, you must meet the lender’s credit score, time in business and annual revenue requirements.
Common invoice factoring qualification requirements
Qualifying for invoice factoring is typically easier than other types of small business loans. Here are the main factors invoice factoring companies consider when reviewing your application:
-
Invoice history
You could be a good candidate for invoice financing if some of your customers consistently pay their invoices on time. -
Customers’ credit scores
While invoice factoring companies might look at your credit score, they are more interested in your customer’s creditworthiness since that is how they will get paid. -
Monthly revenue
Some factoring companies might require a minimum volume of invoices each month. -
Concentration limits
Some companies limit the amount of factored invoices that can come from one specific customer or receivable. This is known as a concentration limit. -
Accounts receivable (A/R) aging report
This financial statement lists all your unpaid invoices, along with how long they’ve been outstanding. You can typically download this from your accounting software.
How to choose a factoring company
When selecting the best invoice factoring for your small business, you’ll want to compare the following details.
Funding qualifications
Make sure you meet the company’s basic funding requirements, such as invoice minimums, time in business, credit history and location.
Funding process
Ask the company about their overall process in collecting funds from your customers. You want to ensure they don’t harass clients into paying past debts. Also, what is their process if clients fail to pay their invoices?
Advance rates
A higher advance rate allows you to cover more immediate expenses, helping you get your business back on track. Advance rates generally range from 80% to 95%, although some companies offer up to 100%.
Factor and other fees
Make sure you understand all associated costs before agreeing to the terms of your financing contract. The lower the factor fee, the more money you will save in the long run.
Time to funding
Ask the company how long it takes from the time you apply to when funds can hit your business bank account so you can plan accordingly.
Collateral requirements
Some factoring companies require collateral. Most often, this comes in the form of a UCC filing, or blanket lien, which is a first-position lien against all of your business’s assets. Accepting this filing won’t cost anything upfront, but it can make it difficult to qualify for additional financing in the future. Some companies also file a UCC lien against just your accounts receivable, which is less likely to affect future financing.
Industry expertise
Some factoring companies specialize in specific industries. For example, RTS Financial only offers trucking factoring. Make sure that the factoring company is a good fit for your business model.
Your invoice factoring may be considered recourse or nonrecourse factoring. This determines what happens if your customers don’t pay their invoices.
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Recourse factoring
If an invoice is left unpaid, you will have to swap it for another invoice of equal or more value or buy back the invoice. Recourse factoring is more common since it protects the lenders if they can’t collect money on your behalf. However, repaying your advance could be challenging if your business has limited funds. -
Non-recourse factoring
With this type of factoring, the factoring company assumes full risk of nonpayment. So if your customers fail to pay the invoice, you can still keep the advance you have already received. Because of this, non-recourse factoring tends to have higher fees or be reserved for low-risk industries.
Is working with a factoring company right for my business?
Ultimately, the decision to work with a factoring company is a personal one. Here are some advantages and disadvantages of invoice factoring to consider:
Pros and cons of invoicing factoring
Pros
- Access cash for your business within a few days
- Qualifications are typically less stringent than traditional business loans
- Guaranteed funds with non-recourse factoring
Cons
- High factor rates mean lower profit margins
- Doesn’t help build business credit like traditional financing
- Lack of stability with recourse factoring
Invoice factoring could be a good choice for your business if
- You run a primarily invoice-based business.
- You have customers who pay on time.
- You can afford to pay the factoring fee in exchange for an advance payment.
Invoice factoring might NOT be a good choice for your business if
- You collect other forms of payment, rather than invoicing.
- Your customers often pay late or not at all.
- Having to pay the factoring fee will disrupt your cash flow.
Alternatives to factoring companies
While invoice factoring can help you access quick cash for your business, it’s not a perfect solution for all companies. Here are some other business financing options to consider.
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Short-term business loan
Term loans provide a lump sum of cash, which you pay off over a few months to several years. You typically need a good credit score, reliable revenue and at least six months to two years in business to qualify.
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Startup business loan
Many lenders offer small business financing for startups or those with a limited credit history. You may need to provide collateral or a down payment to help secure the loan.
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Business line of credit
You can access capital as needed with a revolving line of credit, only paying interest on what you use. Many online lenders and traditional banks provide lines of credit for a range of business types.
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Equipment loan
Banks and online lenders provide equipment financing to help you purchase or upgrade new and used equipment for your company. Since the equipment acts as collateral, startups and low-credit borrowers might have a better chance of approval than traditional financing. You can also consider equipment loans for bad credit.
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Merchant cash advance (MCA)
Similar to invoice factoring, an MCA company allows you to borrow funds against future credit and debit card sales. Retail businesses can find relief from seasonal fluctuations with this financing option, although the rates tend to be expensive.
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Microloans
Microloans typically provide up to $50,000 to small business owners who can’t qualify for traditional business financing. However, if you need access to cash fast, note that SBA microloans can take longer to fund.
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Business credit cards
You can use business credit cards for everyday business expenses, often earning valuable perks and travel rewards. However, paying off your balance each month is the best strategy since credit card interest rates tend to run high.
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Small business grants
Small business grants can come from federal and state government agencies, as well as corporations and foundations. Grants are free money to help startups, women entrepreneurs, minority business owners and other industries grow and expand their companies. While such grants can be competitive, applying for them could help unlock free funds for your business.
Frequently asked questions
Invoice factoring services are typically used by business-to-business (B2B) companies with a significant amount of unpaid invoices. Some common industries using invoice factoring include trucking and freight companies, wholesalers, government suppliers, courier and delivery services, commercial food service and more.
Yes, there are factoring companies that specialize in working with startups. For example, altLINE provides factoring funds for startup staffing agencies, offshoot startups, new distributors and wholesalers and nonprofit startups. To qualify for startup factoring, you will likely need to provide a list of your existing and potential customers so the factoring company can review their credit profiles.
Factoring companies usually charge a factor rate, also called the discount rate, which is slightly different from standard business loan interest rates. The factoring company withholds the factoring fee from the invoice total to cover their service. Factor rates can range from 0.55% to 8.25% or higher. In addition, some factoring companies charge an origination fee and other hidden fees on top of the factor rate.
Methodology: How we chose the best factoring companies
We reviewed the leading factoring companies to determine the overall best six factoring companies. To make our list, factoring companies must meet the following criteria:
- Flexibility eligibility requirements: Qualifications based on the whole picture, not a minimum credit score or specific time in business.
- Rates and terms: We prioritize factoring companies with advance rates of 90% or higher, competitive factor rates, limited fees and greater options for repayment terms.
- Time to funding: We know businesses often need fast access to capital, so we prioritize factoring companies that can deliver within one to three business days.
- Repayment experience: We consider each lender’s reputation and business practices. We also favor lenders that offer reliable customer service and provide unique perks to customers, like loyalty rewards.