8 Best Factoring Companies

Invoice factoring is a financial solution that allows businesses to sell outstanding invoices to a factoring company for immediate payment rather than waiting for their customers to pay those invoices. The factoring company collects payment on those customer invoices, retaining a fee for its services. Working with a factoring company helps businesses access cash quickly, especially if they have difficulty obtaining financing from traditional sources like banks.

In 2021, the U.S. factoring industry was valued at $147 billion. The demand for factoring companies continues to increase as businesses look for additional financing alternatives to convert their receivables into cash more quickly.

If you’re looking for the best factoring company for your business, we’ve narrowed the options down to eight by comparing fees, speed of service, term flexibility, and offerings for specific industries. Read on for our reviews of the best invoice factoring companies in America.

Our Top Picks for Best Factoring Companies

• RTS Financial — Best for Industry-specific Services
• Triumph — Best for Same-day Funding
• altLINE — Best for Flexibility
• TCI Business Capital — Best for High Funding Amounts
• Aladdin Capital — Best for Small Business
• TBS — Best for Low Fees
• Apex Capital Corp — Best Speed
• TAFS — Best for Trucking

Best Factoring Companies Reviews

Why we chose it: RTS Financial offers convenient and integrated factoring services, especially for trucking companies looking to gain control over their receivables. Since its inception in 1986, RTS Financial has worked with thousands of trucking companies in the U.S. and Mexico and has become a well-respected market leader.

RTS Financial will advance up to 97% of the total on invoices uploaded through its web-based portal, RTS Pro. It can provide funding in as little as 24 hours and doesn’t charge any hidden ACH or invoice-uploading fees.

Aside from invoice factoring, RTS Financial also provides other services that trucking companies may find valuable. Its Fuel Card program grants companies discounts at over 2,000 fuel stations across the United States. At the same time, its ProTransport software solution is designed to help trucking companies maximize efficiency while minimizing costs.

Military veterans receive additional discounts from RTS Financial.

Why we chose it: Triumph is another factoring company that helps trucking and freight companies access same-day or next-day funding. Whether you own a single truck or an entire fleet, Triumph strives to get your funding ready as soon as possible.

The MyTriumph web portal gives Triumph customers unlimited credit checks on current and potential clients, helping them avoid untrustworthy customers of their own. MyTriumph offers real-time feedback on invoices, alerts you of the invoices that require your attention, and directly connects you with Triumph’s customer support team if you need help.

Triumph doesn't make its qualification requirements publicly available, and you must contact the company to obtain a quote.

Why we chose it: Operating under the umbrella of the Southern Bank Company, altLINE eliminates the need for an intermediary to access funding. For clients, this means lower costs and greater reliability and trust.

altLINE supports a vast number of industries, including staffing, distribution, manufacturing, consulting, food and beverage, wholesale, textile and apparel, oil and gas, professional services and more. It provides factoring for businesses in the startup phase as well as more mature companies without requiring an established operating history.

altLINE also offers accounts receivable (AR) financing, a valuable addition for companies who prefer to retain control of their payments process.

Why we chose it: Since launching in 1994, TCI Business Capital has helped thousands of businesses across a wide range of industries, including trucking, staffing, manufacturing, telecom and oilfield services. With options of up to $20 million, TCI Business Capital offers some of the highest funding amounts in the industry.

Inside TCI Business Capital’s web portal, you can input your average sales, desired payment terms,and an advance rate of 70%, 80% or 90% to get a real-time quote of the fees you’ll have to pay. TCI Business Capital requires a total minimum invoice value of $50,000 per month, so it’s not a good fit for businesses with lower volumes.

Why we chose it: Aladdin Capital offers tailored factoring for businesses (including fleet factoring) and handles billing and collections for its clients' accounts receivable. Aladdin Capital's fleet factoring program is specifically designed for trucking companies with 10 or more trucks and offers same-day or next-day funding approval.

Aladdin Capital also offers equipment leasing, financing and regulatory compliance services to help take your business to the next level without any costly missteps. You can finance work computers, specialty vehicles, office equipment and more, allowing you to spread out the cost of large purchases over time.

Why we chose it: TBS offers a range of user-friendly tools and technologies to help trucking companies grow their businesses and manage their finances. These tools include 24/7 live chat, the Get Paid App for independent trucking owners and a fuel finder that provides access to discounted fuel across the U.S.

TBS offers fuel discount cards with savings of up to 90 cents per gallon — a very impressive rate — and same-day payments for invoices. TBS also offers a program that allows clients to finance up to 50% of their truck insurance down payment via eight weekly payments from factored invoices.

Why we chose it: Apex Capital is one of the fastest factoring companies in the industry, quick enough for you to receive payment just minutes after your freight invoices are purchased. The speed is provided by Apex Capital’s new digital payment system, blynk, which ensures you get paid securely and on time.

Apex Capital’s full-service factoring package includes free credit checks, a mobile app with image capture, recourse and non-recourse options, access to its load board for carriers, shippers and brokers, and an Apex TCS Fuel Card for savings of an average of 69 cents per gallon.

Apex Capital provides factoring for businesses 24/7, even on weekends and bank holidays.

Why we chose it: TAFS is one of the leading trucking factoring companies providing reliable accounts receivable (AR) financing. TAFS often provides payment within an hour or two while still providing rates competitive with the rest of the industry.

TAFS’ mobile app allows clients to upload invoices directly from their smartphones and offers truckers fuel discounts, free credit checks and back-office support.

TAFS operates as a recourse-only factoring company, which means that if a customer fails to pay their invoice, you’ll be liable to pay for TAFS’ services.

Factoring Companies Guide

Main things to know when choosing a factoring company

There are many factoring companies in the U.S., and if you don’t have a good understanding of how to choose one, you might put your business at risk. To prevent this from happening, here are some things you should know when selecting a factoring company for your business.

Factoring companies can be industry-specific

When choosing a factoring company, it's important to consider whether it specializes in your industry. This can be beneficial because industry-specific factoring companies will better understand the challenges and opportunities specific to your business. Among the many sectors factoring companies offer their services to, transportation and construction companies are the most common.

For example, a factoring company specializing in the trucking industry (also called freight factoring companies) may be better equipped to handle the unique challenges and requirements of trucking businesses. If you choose a company with little or no understanding of your industry, the costs may outweigh your savings.

Understanding the entire contract is a must

Before entering into any agreement with a factoring company, it's important to carefully read and understand the contract. This will ensure that you know exactly what you're agreeing to, and help you avoid potential pitfalls or misunderstandings. Pay particular attention to the terms and conditions of the agreement, as well as factoring costs and any additional fees involved. This will save you from any hidden fees now and in the future and allow you to make the most of the services you’re paying for.

Choose either a recourse or non-recourse agreement

Understanding the difference between recourse and non-recourse factoring agreements is essential in choosing the best factoring company for your business. In a recourse agreement, the factoring company has the right to pursue you for payment if your customer fails to pay. In a non-recourse agreement, the factoring company assumes the risk of the customer not paying.

Both types of agreements have their benefits and drawbacks, so be sure to discuss the differences with prospective factoring companies to determine which will work best for your business.

What is the average cost of factoring companies?

On average, factoring companies charge factoring rates around 1%-5% of the amount of the total invoices collected, but this varies based on the industry.

Industry-specific rates are summarized in the table below.

How do factoring companies work?

Factoring companies provide businesses with a way to quickly access cash by purchasing their unpaid invoices. This allows businesses to receive payment for their invoices immediately rather than waiting for customers to pay.

To use a factoring company, a business first sends the company a copy of its outstanding invoices. The factoring company will then advance the business a portion of the invoices, typically between 70% and 90%. The business can then use the cash advance to meet its immediate financial needs.

Once the customer pays the invoice, the factoring company will receive the full payment. The factoring company will then subtract any fees or charges and pay the remainder to the business.

Factoring companies typically charge either a flat fee or a percentage of the invoice for their services. The exact terms and fees will vary depending on the factoring company and the specifics of the agreement.

Factoring can be a useful tool for businesses that need cash upfront and are unable to obtain traditional forms of financing. It can also be a good option for businesses that have difficulty qualifying for conventional loans. However, it's important for businesses to carefully consider the terms and fees of any agreement with a factoring company before entering into a contract.

Why do you need a factoring company?

There are several reasons why it can be a good idea to use a factoring company. First, factoring can provide businesses with immediate access to working capital. This can be especially helpful for companies that need to pay suppliers or meet other financial obligations but are unable to obtain other forms of financing.

Second, factoring can be a good option for businesses that have difficulty qualifying for business loans or lines of credit. This can be because of a poor credit history, a lack of collateral, or other factors. Factoring companies often have more flexible requirements than traditional lenders and can provide financing to businesses that may not be able to obtain it elsewhere.

Third, factoring can help businesses improve their cash flow and financial stability. By selling outstanding invoices to a factoring company, businesses can receive payment immediately, rather than waiting for customers to pay. This can help companies avoid cash flow problems, build up their credit score and improve their financial outlook.

Fourth, factoring can help businesses focus on their core operations. Companies can free up time and resources to focus on other aspects of their business by using a factoring company to handle their invoicing and collections.

While factoring may not be the right funding option for every business, it can be a valuable tool for businesses that need immediate access to cash, have difficulty qualifying for traditional loans or want to improve their cash flow and financial stability.

How we found the best factoring companies

Invoice factoring can help business owners increase cash flow quickly, but a big part of the process is choosing the right company to work with. These are the factors we considered when preparing this list:

Maximum funding

When deciding what factoring company to work with, it's essential to know maximum funding amounts they can provide. You may have better odds of approval with factoring companies that have higher funding limits, as they tend to have a sizable amount of money ready to fund multiple contracts.

Discount rates

Discount rates are the payments made for a factoring company’s services. We sought out companies offering low discount rates without sacrificing service quality.

Advance rates

Advance rates are the percentages a factoring company is willing to extend to its clients. We favored factoring companies with higher advance rates.

Factoring fees

Aside from the discount rates charged, other factoring fees are sometimes added to the overall cost of a service package. These include transfer fees (ACH or wire) and origination fees for new customers. We looked for companies who are upfront about the fees they charge.

Summary of the best factoring companies of 2023

• RTS Financial — Best for Industry-specific Services
• Triumph — Best for Same-day Funding
• altLINE — Best for Flexibility
• TCI Business Capital — Best for High Funding Amounts
• Aladdin Capital — Best for Small Business
• TBS — Best for Low Fees
• Apex Capital Corp — Best Speed
• TAFS — Best for Trucking