Best factoring companies for high growth businesses | 2024
Are you a business leader looking for the best factoring company to support your growth goals in 2024? Then look no further.
Here, we have curated a list of the top invoice factoring companies to consider for high-growth firms like yours, as well as how to choose the best lender to suit your business.
Whether you have high customer concentration, operate in a specific industry, or need same-day funding, we’ve weighed up all the pros and cons so you don’t have to…
The best invoice factoring companies for 2024:
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- Best factoring company for high customer concentration: Growth Lending
- Best factoring company for same-day funding: Triumph
- Best factoring company for trucking: TAFS
- Best factoring company for multiple currencies and/or jurisdictions: Growth Lending
- Best factoring company for low fees: TBS
- Best factoring company for flexibility: Growth Lending
1. Best factoring company for high customer concentration: Growth Lending
You’ve done the hard work – you’ve won a major customer and their orders make up a significant percentage of your total revenue. Great news, right?
And yet for many invoice factoring providers this would be a sticking point, as they’d consider you to have “high customer concentration” – a potential point of risk.
Growth Lending understands that winning a contract from a large organisation should be celebrated, not punished. The lender specializes in tailored working capital facilities, providing a reliable solution to businesses that have high debtor concentration, such as those that sell into enterprises like Amazon and Walmart.
2. Best factoring company for same-day funding: Triumph
Sometimes the need for cash can be more urgent, so if your business relies on same-day funding, Triumph is the best factoring company to consider.
The lender’s same-day guarantee ensures that you have quick access to working capital, enabling you to execute crucial spending such as payroll and rent. Their efficient application process makes it easy for business owners to apply and get an answer quickly.
3. Best factoring company for trucking: TAFS
For trucking companies looking for the best factoring company, TAFS (TransAm Financial Services) stands out as a top choice.
The lender has extensive experience in this sector, so it understands the unique challenges faced by trucking companies and tailors its services accordingly.
One of the key advantages of working with TAFS is the lender’s competitive factoring fees. TAFS offers flexible pricing options to accommodate different business needs, as well as a range of complementary services such as fuel card programs and discounts, helping trucking companies optimize their operations.
4. Best factoring company for multiple currencies and/or jurisdictions: Growth Lending
If your business operates overseas or handles transactions in multiple currencies, you need an invoice factoring provider that is experienced at lending in multiple currencies across multiple jurisdictions.
With their expertise in handling international transactions, Growth Lending provides invoice factoring solutions for businesses operating in multiple countries, including non-OECD nations, and handling invoices in USD, EUR and GBP.
5. Best factoring company for low fees: TBS
While cost shouldn’t be the only consideration when it comes to selecting an invoice factoring provider, it is naturally a priority for many businesses.
With upfront and transparent pricing, TBS understands the importance of cash flow for small businesses and offers competitive factoring fees to help improve working capital.
6. Best factoring company for flexibility: Growth Lending
High growth businesses need adaptable finance facilities to manage their cash flow effectively.
With Growth Lending, you can factor invoices on an invoice-by-invoice basis without being tied down by a minimum contract. Their pay-as-you-go model ensures that you only pay for the services you are utilizing, making it a cost-effective solution for most businesses.
How to choose the best invoice factoring company for your business
Still not sure which factoring provider is the best fit for you?
The best place to start is by having a clear understanding of your business’s needs and goals,
as each lender will have unique characteristics of their products that will mean they are better (or worse!) suited to your business model.
You should consider:
Factoring fees
Factoring fees can vary significantly between invoice factoring companies, with some charging a flat fee based on the total value of invoices, and others charging a percentage, alongside set-up or admin fees.
Lenders that are offering a more specialist service such as industry-specific or multi-jurisdiction factoring may also charge more, because of the additional risk involved.
Look for transparency in fee structures and flexible terms – some lenders may look competitive on the surface, but include lots of hidden fees that come back to bite you later on.
Recourse vs non-recourse factoring
Recourse factoring requires the business to buy back any unpaid invoices if the customer fails to pay, while non-recourse factoring protects the business from this risk.
Recourse factoring typically has lower fees and is more readily available, but it carries more risk for the business. Non-recourse factoring provides greater peace of mind for the business, but it may have higher fees and stricter eligibility requirements.
You should evaluate your cash flow needs, customer creditworthiness and risk tolerance when choosing between recourse and non-recourse factoring, as well as weigh up the benefits of the protection versus total cost of the facility.
Industry specific factoring
Lenders that specialize in providing funding solutions that are tailored to the unique requirements of certain industries usually have deep in-house knowledge and experience, enabling them to offer a more customized service.
Industry-specific factoring companies may also offer additional services or benefits such as credit insurance, or assistance with collections, which may be an additional consideration alongside price.
By choosing an invoice factoring company that specializes in your industry, you benefit from their industry knowledge, potentially leading to a more seamless and successful funding partnership.
Speed of funding
The speed of funding is an important factor to consider when choosing an invoice factoring company.
Some businesses will need access to cash sooner than others, so considering which lenders can reliably deliver on their promises will be a top priority if you need funds quickly.
Factors to consider when evaluating the speed of funding should include the application process, approval time and how quickly funds are disbursed.
t’s also important to consider any additional fees or charges associated with fast funding, as these can impact the overall cost of factoring.
Factoring flexibility
High-growth businesses need to be agile, so the flexibility of any funding facility is key. Ideally you want to work with a lender that offers customizable solutions that meet your specific business needs and/or the ability to set up factoring on a pay-as-you go basis. This way you are only paying for the services you are actually using.
Determine if the factoring company has experience working with high growth firms. They should have a track record of successfully handling large volumes of invoices and accommodating rapid growth.
Customer concentration
If your business sells into large companies such as Amazon or Walmart, you may have a high debtor concentration, which can make it difficult to secure funds from some factoring companies.
Look for specialist lenders such as Growth Lending, that are used to working with businesses like yours. They will have a better understanding of your model and be able to provide a facility that has both the functionality and cost that you require.
Choosing the best factoring company for your business can be a difficult decision – fortunately our lending experts are on hand to help. If you’d like to find out more about our facilities, or factoring in general, book a chat with one of them here, or get in contact via our website.
Frequently asked questions
A factoring company is an entity that provides businesses with immediate cash by purchasing their accounts receivable at a discounted rate. This allows companies to access the funds they need to cover expenses and maintain cash flow while waiting for customers to pay their invoices.
Working with a factoring company enables a business to speed up its growth plans by accelerating access to cash. This improves cash flow and means the business can focus on core operations and growth plans rather than chasing payments. Factoring invoices can also mitigate the risk of bad debts if the lender offers bad debt protection.
Working with a factoring company can be beneficial for businesses. It provides a reliable source of working capital by converting accounts receivable into immediate cash. This improves cash flow, allows for timely payments to suppliers, and supports business growth. However, careful consideration should be given to the terms and fees associated with the factoring agreement.