| 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% | 24 to 48 hours | See Business Loan Options |
 | Software integration | Unlimited | 100% | 2.75% to 8.25% | Next business day | See Business Loan Options |
 | In-person factoring | Up to $2,000,000 | 95% | 2.00% to 4.00% | 24 hours | See Business Loan Options |
 | Trucking businesses | Up to $3,200 (per truck, per week) | 97% | Not disclosed | Within 24 hours | See Business Loan Options |
 | Fast funding | Up to $30,000,000 | Up to 90% | 0.90% to 2.50% | Same day | See Business Loan Options |
 | Large invoices | Up to $20,000,000 | Up to 95% | 0.55% to 2.00% | 24 hours | See Business Loan Options |
Origination and wire fees
Requires client’s customers to be creditworthy
Slightly longer funding times compared to competitors
altLINE works with all business types, including startups and companies with poor or limited credit. While altLINE runs a background and credit check for all applicants, it doesn’t have a minimum credit score requirement. Instead, altLINE focuses on your invoices and payment due dates as part of the approval process.If you don’t qualify for altLINE’s invoice factoring services, it will help you find a startup factoring company that meets your needs.
Factoring fees go up to 8.25%
No construction or real estate invoices
Minimum of $100,000 in outstanding invoice(s) to qualify
Website lacks details about factor rates
Standard term of six months
Lower funding limits compared to competitors
Only serves trucking companies
Must apply via contact form and phone call
Lack of transparency about factor rates
Must apply via contact form or phone call
Slightly higher fees with non-recourse factoring
Website doesn’t list criteria needed to qualify
Doesn’t list specific eligibility criteria
Doesn’t list factor rates beyond 30 days
You have to buy back invoices if the customer fails to repay
Universal Funding 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.In addition to invoice factoring, Universal Funding offers accounts receivable financing, payroll funding and tax lien resolution services.
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).
Determine how much you need to cover your immediate business expenses. Remember, when using an invoice factoring company, you lose a small portion of each invoice.
For example, let’s say you sell $15,000 worth of invoices to a factoring company with a 90% advance rate and a 2% factoring rate. You will receive $13,500 upfront and $1,200 after the invoice is paid, but this service will cost you $300 in total.
Before considering factoring, you might find more affordable financing solutions with a more traditional small business loan or a working capital loan.
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:
Read the fine print before signing a contract with an invoice factoring company. Many companies lure you in with the promise of incredibly low rates, only to add extra fees afterward. Understanding the breakdown of advance rates and factors, plus reading business lender reviews can help you find a reputable financing company that fits your needs.
Factoring companies will have their own list of business loan requirements, such as personal and business tax returns, bank statements, copies of current invoices, articles of organization/incorporation and payables aging reports. Some factoring companies may require a detailed business plan, although this is more common with regular business loans.
Factoring companies have their own process for getting a business loan, so contact a representative to inquire about next steps. You can typically receive funds within a day or two after the factoring company verifies and approves your invoices. Overall, this is a quicker process than traditional business financing.
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 0.75% to 8.25% or higher. In addition, some factoring companies charge an origination fee and other hidden fees on top of the factor rate.