Invoice financing helps businesses get immediate cash flow by using their unpaid invoices as collateral. This financial solution allows companies to access the funds they need without waiting 30 to 90 days for customers to pay their bills. Invoice financing companies purchase or advance money against outstanding invoices, giving businesses the working capital they need to operate and grow. The United States has various invoice financing companies that serve different industries and business sizes. These companies offer various terms, rates, and services to meet the diverse needs of American businesses.
What Do Invoice Financing Companies Do?
Invoice financing companies help businesses turn unpaid invoices into immediate working capital. They provide two primary financing options based on how control of the invoices is handled:
1. Invoice factoring: The financing company buys the invoices at a discount and takes over the collection process. The business receives an upfront cash payment, and the company collects directly from the customer.
2. Invoice discounting: The business borrows money against its unpaid invoices while retaining responsibility for collections. The invoices remain on the business’s books, and the financing company provides funds using them as collateral.
These companies focus more on the credit strength of the business’s customers rather than the business itself. They usually advance a portion of the invoice value upfront, often between 70% and 95%, and release the remainder, minus fees, after the customer pays.
Additional services may include:
Customer credit checks: Review the payment history, credit scores, and financial stability of each customer before approving their invoices for funding.
Collections management: Handling reminder emails, payment follow-ups, and direct outreach to customers who delay or miss payments (typically included in factoring).
Detailed receivables reporting: Providing online dashboards or weekly/monthly reports showing invoice status, aging summaries, and payment trends to support cash flow planning.
Credit insurance or protection: Covering unpaid invoices if a customer defaults due to insolvency or prolonged non-payment, usually available as an optional feature in non-recourse factoring.
Why Partner with an Invoice Financing Company?
Partnering with invoice financing companies provides several key advantages for businesses facing cash flow challenges:
Immediate Working Capital - The benefits of invoice financing include instant access to cash tied up in unpaid invoices, and eliminating long waiting periods for customer payments.
Improved Cash Flow Management - Businesses gain predictable cash flow patterns, making it easier to plan operations and meet financial obligations.
Growth Opportunities - Companies can accept larger orders and take on new projects without worrying about upfront capital requirements.
Operational Benefits - Businesses can pay suppliers on time, meet payroll obligations, and invest in equipment or inventory without delay.
Reduced Collections Burden - Many invoice financing companies handle collections activities, freeing up internal resources for core business activities.
Fast Approval Process - Invoice financing companies typically approve funding within 24 to 48 hours, much faster than traditional bank loans.
Credit Flexibility - These companies focus on customer creditworthiness rather than your business credit score, making funding accessible to businesses with limited credit history.
Key Factors When Choosing the Best Invoice Financing Company
Several critical factors determine which invoice financing company best serves your business needs:
Advance Rate - This percentage shows how much money a business receives upfront, typically ranging from 70% to 95% of invoice value. Higher advance rates provide more immediate cash flow for your operations.
Fee Structure - Companies use different pricing models including flat fees, percentage-based charges, or sliding scales based on payment timing. Understanding total costs helps you compare options accurately.
Recourse vs Non-Recourse Terms - Recourse agreements make you liable if customers don't pay, while non-recourse terms transfer default risk to the financing company. Non-recourse typically costs more but provides greater protection.
Industry Expertise - Some invoice financing companies specialize in specific sectors like manufacturing, staffing, or transportation. Specialized companies understand industry payment cycles and customer behaviors better.
Customer Service Quality - Look for companies offering dedicated account managers, responsive support teams, and clear communication about account status and payment processes.
Technology Platform - Modern platforms provide real-time reporting, automated invoice submission, and integration with accounting software to streamline operations.
Funding Speed - Consider how quickly companies process applications and release funds, especially if you need rapid access to working capital.
Contract Terms - Review minimum volume requirements, contract length, termination clauses, and any additional fees or penalties before committing.
Best Invoice Financing Companies in the USA
Various U.S.-based companies specialize in offering factoring and discounting services across various industries. These providers differ in terms of funding speed, eligibility requirements, fee structure, and service options:
1. Drip Capital
Drip Capital specializes in trade finance solutions for exporters and importers across various industries:
Advance Rates: Offers up to 80% of invoice value; charges start from 0.7% per month
Funding Speed: Funds disbursed within 24-48 hours via their digital platform
Service Options: Provides both recourse and non-recourse invoice factoring
Technology: Allows digital invoice uploads and real-time transaction tracking
2. FundThrough
FundThrough offers fast, flexible invoice factoring with full advances on approved invoices:
Advance Rates: Offers up to 100% of invoice value minus a flat fee
Funding Speed: Same-day or next-day funding after invoice approval
Service Options: Provides spot factoring with no long-term contracts
Technology: Integrates with accounting tools like QuickBooks for automation
3. Riviera Finance
Riviera Finance delivers non-recourse invoice factoring with receivables management:
Advance Rates: Typically up to 95% depending on customer credit
Funding Speed: Releases funds within 24 hours after invoice verification
Service Options: Offers non-recourse factoring and credit management
Technology: Includes invoice tracking and receivables reporting features
4. altLINE by The Southern Bank
altLINE provides direct bank-funded invoice factoring with regulated pricing:
Advance Rates: Offers up to 90% of invoice value
Funding Speed: Typically releases funds within 24-48 hours
Service Options: Includes invoice factoring and asset-based lending
Technology: Online platform offers visibility into funding activity and balances
5. Triumph Business Capital
Triumph Business Capital delivers factoring solutions nationwide for small and midsize businesses:
Advance Rates: Typically between 85% and 95% depending on invoice strength
Funding Speed: Same-day or next-day funding available
Service Options: Offers both recourse and non-recourse factoring plans
Technology: Digital portal supports invoice submission and account tracking
6. eCapital
eCapital supports high-volume factoring for growing businesses across various industries:
Advance Rates: Offers up to 90% with optional non-recourse factoring
Funding Speed: Provides funding within 24 hours after invoice approval
Service Options: Includes invoice factoring, asset-based lending, and freight finance
Technology: Online dashboard allows tracking of invoices and payments
7. RTS Financial
RTS Financial is a factoring provider with added tools for transportation companies:
Advance Rates: Offers up to 97% on eligible invoices
Funding Speed: Same-day funding available after the setup
Service Options: Includes invoice factoring, fuel advances, and collections
Technology: Mobile and web platforms for submitting invoices and managing accounts
8. Scale Funding (formerly TCI Business Capital)
Scale Funding offers month-to-month invoice factoring for operational flexibility:
Advance Rates: Up to 90% on verified invoices
Funding Speed: Funds available within 24 hours of invoice submission
Service Options: Short and long-term factoring agreements available
Technology: Secure portal for managing receivables and reporting
9. Porter Capital
Porter Capital provides invoice factoring and working capital solutions with flexible terms:
Advance Rates: Offers 70% to 90% depending on customer credit
Funding Speed: Typically funds are within 1–2 business days
Service Options: Offers factoring and asset-based lines of credit
Technology: Online account management system with real-time updates
10. Far West Capital
Far West Capital provides custom invoice financing and asset-based lending solutions:
Advance Rates: Offers up to 90% on approved invoices
Funding Speed: Funding after customer credit review and invoice verification
Service Options: Provides factoring, inventory financing, and ABL
Technology: Web tools available for invoice monitoring and document uploads
Invoice financing companies provide essential working capital solutions for businesses across the United States. These companies offer different advance rates, fee structures, and service levels to meet diverse business needs. When selecting among invoice financing companies, consider factors like advance rates, fees, industry expertise, technology platforms, and customer service quality.
The companies listed above represent leading providers in the market, each with unique strengths and specializations. Some focus on specific industries like transportation or international trade, while others serve broader markets. Invoice discounting strategies vary among providers, so businesses should compare multiple options to find the best fit. Evaluate your specific requirements and choose a provider that aligns with your business goals and operational needs.
Frequently Asked Questions
1. Do all Invoice financing companies offer both factoring and discounting?
No, not all invoice financing companies offer both services. Most companies specialize in invoice factoring, where they purchase your invoices outright. Invoice discounting, where you retain ownership and collection responsibility, is less common and typically offered by larger financial institutions or specialized lenders. When comparing invoice financing companies, verify which services they provide and whether they match your preferred financing structure.
2. What are the average fees charged by Invoice financing companies?
Invoice financing companies generally charge between 1% to 5% of the invoice value, depending on factors like industry, invoice volume, customer credit, and payment terms. Additional charges may include application fees, credit check fees, and wire transfer costs. Always ask for a complete fee breakdown before choosing a provider.
3. What kind of credit score do Invoice financing companies look for when approving loans?
Invoice financing companies focus more on your customers’ credit history than your own. Approval largely depends on the payment reliability of those customers. Your business credit is checked lightly, mainly to screen for issues like defaults or bankruptcies. A strong customer base can help you qualify even with a limited credit history. Full credit evaluations are rarely required.
4. Why choose Drip Capital over other Invoice financing companies?
Drip Capital brings focused expertise in international trade finance, an area often underserved by general invoice financing providers. Rates start at 0.7% monthly, with advance rates reaching up to 80%. The platform enables a streamlined application and funding process, with approvals typically issued within 48 hours. With a deep understanding of export-import cycles and documentation, Drip Capital addresses the specific needs of cross-border transactions. Both recourse and non-recourse options are available to suit different levels of risk tolerance.
