Best Invoice Factor Overall: TCI Business Capital

TCI Business Capital wins the overall invoice factor due to their easy to understand rates, no additional fees, and flexibility in allowing you to pick and choose which customer’s invoices you would like to factor. Their advance rate is fixed at 90%, and it’s always the same for every invoice. Their average discount rate of 2% is going to likely be the cheapest option of those reviewed here for the majority of businesses.

Factoring Companies TCI Business Capital

TCI Business Capital has no hidden or additional fees, and their discount rate is reevaluated automatically on a monthly basis based the performance of factored invoices for the previous 30 days. If your factoring volume goes up and/or your customers start to pay quicker, then your rate could decrease. This is a great benefit compared to altLINE, who locks in a yearly rate unless something big changes and you request a re-evaluation.

TCI also lets you pick and choose which of your customer invoices you would like to factor every month. Once you choose a customer then you must factor all of their invoices for that month, but you can avoid factoring invoices for specific customers that may not like a 3rd party collecting their payment. altLINE also allows you to pick and choose, but all of your customer invoices must be paid directly to them regardless of whether they are factored or not.

The only downside we found with TCI Business Capital is that they have a higher minimum monthly factor amount that you must hit than other reviewed, putting tham out of reach for those doing less than $50K per month.

Best Invoice Factor for Those With Net Terms Under 30 Days: altLINE


We recommend altLINE for companies with fast paying customers. If you’re processing over $100K of invoices per month and those invoices are paid in less than 30 days (usually 15) you may receive a discount rate of as low as 0.5%. That is the lowest discount rate offered by the factoring companies we reviewed.

Further, as a direct bank lender, altLINE can be more competitive on pricing when companies are looking to factor more than $300,000. With businesses factoring above $300K, altLINE typically moves to a customer pricing structure, which can lead to offering customers more aggressive rates.

When you factor invoices through altLINE you will always be kept in the loop with any communications to your customer. altLINE encourages you to send the first communication to your customer letting them know about altLINE’s involvement. They won’t reach out to your customer unless you want them to, or unless they have to in order to collect payment on the invoice.

Other Top Invoice Factoring Option: Paragon Financial

Paragon Financial has the largest amount of individual invoice flexibility of the three companies reviewed in this article. You can pick and choose which individual invoices you want to invoice without any other obligations as long as you hit the monthly minimum of $30,000. You don’t have to factor all of the invoices from a single customer like you do through TCI Business Capital, and you don’t have to send all of your invoice payments to the same payment account like altLINE requires.

If you have customers that typically take more than 60 days to pay your invoices then Paragon has a cost that is on the higher end of the scale compared to TCI Business Capital, whose customers average 2%. Paragon charges 1.25% for each 30 day period that your customers do not pay off the invoice. Paragon Financial also has additional fees that will be disclosed to you after you pre-qualify.

In-Depth Overview: TCI Business Capital vs altLINE vs Paragon Financial

Funding Amounts

Invoice factoring companies fund different maximum amounts based on their target customer. Most invoice factors also require their clients to have a minimum monthly invoicing volume. All three of these reviewed companies are similar, ranging from $30,000 – $50,000 in monthly minimums. Failing to meet the minimum monthly requirement could result in fees or disqualification. If your business does not want to factor at least $30k per month, read our review of invoice financing companies for funding options of $1K – $500K.

TCI Business Capital: Can fund amounts up to $20,000,000, with a minimum monthly factoring amount of $50,000.

altLine: Can fund amounts up to $5,000,000, with a minimum monthly factoring amount of $30,000.

Paragon Financial Group: Can fund amounts up to $3,000,000, with a minimum monthly factoring amount of $30,000.

Qualification Requirements

The qualification requirements for invoice factoring companies vary, but most will accept new businesses and businesses with poor or limited credit history as long as you meet three universal requirements:

  • You must invoice B2B or B2G customers for goods or services.
  • Your customers must be creditworthy.
  • You must factor $30,000+ per month.

If you don’t meet these requirements then read our guide to invoice financing companies which can work with lower financing amounts and even have options for B2C invoicing.

Most factors will look into the business credit of your customers when deciding whether to accept you as a client. Being creditworthy for your customers means that they have a clean internet profile, a strong payment history, and possibly a good Duns & Bradstreet credit score. For tips on how to get approved, read 7 Ways to Improve Your Invoice Factoring Application.

Factoring Companies
TCI Business Capital: You must factor $50,000+ of monthly B2B or B2G invoices from creditworthy customers that are due in 30, 60, or 90 days. They may pull your customer’s credit, but won’t necessarily have to if your records show they have a long history of paying on time, or if TCI is familiar with the business through other dealings.
Factoring Companies
altLine: You must factor $30,000+ in monthly B2B or B2G creditworthy customer invoices that are due within 90 days. They may pull your customer’s credit, but won’t necessarily have to do it if they have a long history of paying on time, or if altLINE is familiar with that business.
Factoring Companies
Paragon Financial Group: To qualify you must have at least $30,000 in monthly B2B or B2G invoices to factor. Each of your customers must be individually approved by Paragon, who will do a credit check on your customers through Dun & Bradstreet.

Advance Rate

The advance rate is the amount the factor will pay you for your invoice up front, before your customer pays off the invoice. This is typically 75 – 95% of the value of the invoice. Once the invoice is paid off then the factor will pay you the remaining balance of the invoice minus a discount rate and any other fees you’ve agreed to.

TCI Business Capital: Advances 90% of the invoice upfront.

altLine: Advances 90% of the invoice upfront.

Paragon Financial Group: Advances 90-95% of the invoice upfront.

Discount Rate

The discount rate, sometimes referred to as the factor rate, is the percent of the value of your factored invoices the factoring company collects as their fee.

Factoring Companies
TCI Business Capital: The discount rate from TCI Business Capital changes from month to month based on the previous 30 days. Many factors go into determining what your rate will be, but the two most important factors are the amount of time it takes your customers to pay outstanding invoices, and the amount you factor through the month. TCI’s rates range from 1% – 4%.
Factoring Companies
altLine: altLINE has a tiered discount rate system. The quicker the invoices are paid combined with the larger the amount you factor on a monthly basis, the cheaper your fee will be. The typical rates range from 0.5% – 5%. The best rates are reserved for those factoring of $100K per month with clients paying in 15 days or less.
Factoring Companies
Paragon Financial Group: Paragon charges 1.25% per invoice for every 30 days the invoice is outstanding. So if the invoice is not paid back for 90 days then your total charge could be 3.75%.

Additional Fees

In addition to your discount or factor rate some factors may charge additional fees that could include some of the following:

  • Origination fees
  • Application fees
  • Factoring/processing fees per invoice
  • Late fees if your customer is past due on an invoice
  • Mailing fees for contacting your clients
  • Service fees
  • Lockbox fees
  • Credit check fees
  • Or more

These fees should be identified in your factoring contract before you sign with the factor because they can greatly increase your total factoring cost.

Factoring Companies
TCI Business Capital: TCI’s only additional fee is charged when you receive payments from them. Every time you receive an ACH they charge you $12.95, and every time you receive a wire transfer they charge you $19.99.
Factoring Companies
altLine: All of their fees are listed in your agreement. Typically you will see a $30 fee if you choose to receive a wire instead of an ACH payment from them. They will also charge you up to $500 as a one time origination fee when you first start factoring with them, and could charge you a $500 fee if you don’t factor at least $30,000 in a single month.
Factoring Companies
Paragon Financial Group: Paragon didn’t disclose all of their fees to us. The fees vary based on your business and your factoring activity.

Recourse or Non-Recourse Factoring

Invoice factoring can be recourse or non-recourse. Non-recourse factoring means that your business isn’t on the hook to the invoice factoring company if your customer doesn’t pay for the goods or services received. With recourse factoring, you must settle the debt with the invoice factor in the event your customer defaults. Non-recourse often requires a higher discount rate than recourse, and it isn’t typically common practice with most factoring companies.

A personal guarantee may also be required in order to be approved. We recommend that you hire a lawyer to look through your factoring contract to understand any exemptions.

Factoring Companies
TCI Business Capital: Recourse and might require a personal guarantee depending on the longevity of your business. The longer your business has been around, the less likely you’ll have to sign a personal guarantee
Factoring Companies
altLine: Recourse and personal guarantee required.
Factoring Companies
Paragon Financial Group: Non-recourse but Paragon requires a personal guarantee. You won’t be responsible for the personal guarantee if your customer becomes insolvent or files bankruptcy.

Assignment of Invoices & Interaction With Your Clients

Invoice factoring is typically structured so that your customer pays the factor directly. The factor is purchasing your actual invoice, and requires you to assign the invoice to them. This typically requires some type of notification to your customer that your factor will be involved and where the customer can send future payments.

One of the biggest concerns for small business owners looking at invoice factoring is how their customers will interact with the factoring company, and what they will be told. Each factor has different rules with how they interact with your customers, but most will take on collection responsibilities and will start communicating with your customers if their payments are past due.

Factoring Companies
TCI Business Capital: Requires assignment of all invoices. Each customer must sign the notice of assignment to acknowledge that they’ll pay TCI going forward. TCI also takes over direct communications with your customers in regards to payment of factored invoices. TCI claims that they won’t contact your customers unless they need to, but they reserve the right to communicate with them about paying of their invoices as needed.
Factoring Companies
altLine: Requires assignment of all invoices, but the flexibility in communicating with your customers is one of their bright spots. They allow you to communicate with your customer and let them know where to send their future payments.
Factoring Companies
Paragon Financial Group: Require assignment of all factored invoices. The customers will contact Paragon directly regarding these invoices and to make payments.

Spot Factoring & Contract Factoring

Spot factoring means you can pick and choose which invoices you want to factor. Contract factoring means that you must factor all of your qualifying invoices with your factoring company. Factoring companies that allow spot factoring still require you to meet all minimum monthly factor amounts.

Factoring Companies
TCI Business Capital: Does not fully use either, but they generally fall under spot factoring. You can’t pick and choose individual invoices, but you can pick and choose which customers you want to factor. When you choose to factor an invoice for one of your customers you must factor all of that customer’s invoices for the month.
Factoring Companies
altLine: Uses non-traditional contract factoring. Their preference is that you factor all of your invoices through them, but it isn’t a requirement. You can pick and choose which invoices you factor. But all of your customer’s invoice payments,whether you factor them or not, must be made to altLINE’s lockbox (or payment account). They will directly reimburse you within 1-3 days for any payments made on non-factored invoices.
Factoring Companies
Paragon Financial Group: Uses spot factoring. With Paragon you can pick and choose which individual invoices you factor as long as you meet their minimum $30,000 of factored invoices monthly.

Industry Specializations

If an invoice factoring company has experience and expertise in your industry, you are likely to have a better factoring experience. It will be more likely that your factor is familiar with which customers are creditworthy and how they prefer to work with factors. They will also be aware of what net terms are common in your industry and other needs a business like yours might have.

While each of the factoring companies reviewed in this article will work with a number of different industries, below are the top 3 industries that they typically work with the most.

TCI Business Capital: Trucking & freight factoring, Oil, & Telecom

altLine: Staffing factoring, Manufacturing, & Wholesale / Distribution

Paragon Financial Group: Manufacturing, Wholesaling, & Distribution

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