Office Administrator filing construction payment paperwork | Top factoring companies for construction contractors

For cash-strapped contractors, invoice factoring may be one option to help solve cash flow problems. However, not every factoring company is willing to put their money in the construction industry. Some factoring companies are reluctant to purchase construction invoices because they think it’s too risky, or because they don’t understand the industry.

Invoice factoring is pretty unregulated, and there are so many companies out there. How do contractors know which ones can help? We couldn’t tell. So we called a bunch of invoice factoring companies to find the best options for construction businesses. Here are five of the top construction factoring companies in the U.S., including their rates, application processes, and factoring insight directly from company executives.

Learn more about invoice factoring in construction:

Top construction factoring companies

BlueVine - Construction Invoice FactoringBlueVine

  • Advance Rate: 85% of the invoice amount
  • Factoring Rate: 0.5 – 1.2% weekly
  • Minimum invoice amount: $5,000 per month

According to a BlueVine representative, the maximum invoice amount for contractors is $5 million per month. While the initial minimum amount is $5,000, repeat customers are only required to have a minimum invoice of $500 per month.

“Once the invoice is paid, contractors will get the other 15% of the advance rate minus the fees that we charge,” a BlueVine representative told Levelset. “We try to get [subs] in the system as fast as possible. Contractors just need to submit documents as fast as possible. Once the application goes to underwriting, we might need a tax return. We’re trying to move the application as fast as possible. We’re trying to fund as many small business as fast as possible.”

BlueVine’s application process takes as little as 10 minutes online. They also offer no application fees. Applications can be processed within 24 hours, and if the sub accepts their offer, they can receive their funds that day. BlueVine also has no administrative costs and no additional fees.

“We offer contractors spot factoring services,” according to BlueVine. “You don’t have to do your entire client ledger. Our rates are lower than most competitors and we have no contracts.”

CapitalPlus Construction Services website | construction factoring

CapitalPlus Construction Services

  • Advance Rate: 65 – 85%
  • Factoring Rate: 2 – 4% per 30 days
  • Minimum invoice amount: $10,000

With CapitalPlus Construction Services, the application process takes between 48 hours and 72 hours for both spot and contract factoring. According to Executive Vice President Brent Chambers, any invoice under $500K is not subject to an application fee. When invoices are above half a million dollars, there’s a fee scale that depends on the size of the facility. CapitalPlus does charge a $25 wire transfer fee on all transactions. Other than that, CapitalPlus has no fees, which means there are no early termination charges.

CapitalPlus encourages subs to communicate openly with the GC, and to factor invoices only for work that has already been completed. “A [sub’s] customer has to approve that the invoice is valid,” Chambers told Levelset. “They need to be upfront with the GC before factoring the invoice.”

Chambers also notes that CapitalPlus has a range of funding options, with invoices being factored for as low as $10K and as high as $10M.

“We will work with banks and other creditors through intercreditor agreements to make sure [subs] can get funded,” said Chambers.

Capstone Capital Group website | construction factoringCapstone Capital Group

  • Advance Rate: 70 – 80%
  • Factoring Rate: 2 – 3% per 30 days
  • Minimum invoice amount: No minimum

For subs that are interested in spot factoring their invoices, Capstone Capital Group can help when contractors need quick cash. Their application process takes about a week, depending on processing time for the Secretary of State where the business is incorporated.

Capstone Capital Group has a $400 due diligence application fee, and they include a varying credit check fee on the onset of the transaction. As for fees that are separate from the factoring rate, Capstone Capital Group has a standard wire transaction fee of $30.

“When subcontractors work with us and help us communicate with the debtor what we’re trying to accomplish, it significantly speeds up the process,” said Thomas Ingrassia, Capstone Capital Group’s Vice President of Due Diligence and Underwriting. “Capstone offers a single invoice factoring program to subcontractors wherein they don’t have to send us receivables under a multi-year contract with minimums. We can factor invoices as they want to factor or have cash flow needs.”

ConstructionFinance website | construction factoringConstruction Finance

  • Advance Rate: 80%
  • Factoring Rate: 1.5% – 2% per 15 days
  • Minimum invoice amount: No minimum

Contractors can apply to factor an invoice with Construction Finance on their company website. The entire application process takes as little as five minutes, according to Tara Coker, the VP of Business Development.

Construction Finance has no application or underwriting fees. They also allow subs to borrow up to $500,000 at any time. The company includes a two-year contract requirement term, but a sub could end the contract earlier if there’s no outstanding balances.

“We stand apart from our competitors in that we specialize in construction factoring, and we have real-world construction experience,” Coker told me via email. “Our team includes lawyers, engineers, construction firm CPAs, and former project managers. In addition to the financial accommodations, clients are gaining a back office that knows the ins and outs of the industry.

According to Coker, they don’t charge  setup, underwriting, or other hidden fees. And it’s not an all-or-nothing proposition; CF allow clients to pick and choose which invoices they want to factor.

Factor Finders - Construction Invoice FactoringFactor Finders

  • Advance Rate: 70 – 80%
  • Factoring Rate: 1 – 5% per 30 days
  • Minimum invoice amount: $25,000

Factor Finders works with five construction funders to help subs and suppliers get financed quickly. Director of Sales Stephanie Chmielecki noted that Factor Finders’ application process typically takes a week to get approved, and it depends on how cooperative the GC is with the sub and the funder. Once the application is approved, Factor Finders start to verify invoices. The process takes no more than two weeks if the sub provides all of the requested documents, according to Chmielecki

“We work with five construction funders and we know their programs well,” said Chmielecki. “We can match contractors with what they want so they don’t have to call around and have funders tell them no. Depending on what type of construction it is, some funders will only work with subs and not the [GC]. Some funders won’t do jobs in big cities.”

Most of the funders that Factor Finders works with include application fees, which they don’t disclose publicly. However, Chmielecki explained the company has no administrative costs.

“We offer a different kind of program to contractors,” said Chmielecki. “It’s hard to get funded in the construction industry. By coming to us, we will work with several funders so contractors just have to tell us what they’re looking for and we can find it. We take on all the work, so we’re gathering information and referring [subs] to funders.”

Factor Funding Co website | construction factoringFactor Funding Co.

  • Advance Rate: 70 – 80%
  • Factoring Rate: 1 – 3% per 30 days
  • Minimum invoice amount: $6,000

The application process with Factor Funding all depends on the GC’s current outstanding payables, including lien filings against them. The President of Factor Funding, Daniel Eke, explained that contractors can get their money within a week of submitting the application.

“We understand small business,” said Eke. “There’s no one size fits all with us. Rates depend on each specific business. We also don’t have a voicemail maze when [subs] try and call us. We return calls. We value relationships and have personable service. We listen to clients. We’re here to solve problems. That’s the reason contractors come to us.”

Factor Funding also has no application fees, no facility fees, and no monthly fees. Factor Funding offers month-to-month contracts. This allows a sub to cancel their order in any month, but in a month that a sub factors, all of their invoices must be factored. Factor Funding has no maximum invoice amount, but they do require the invoice to be at least $6,000.

FK Construction Funding - Invoice FactoringFK Construction Funding

  • Advance Rate: 80%
  • Factoring Rate: 3% per 30 days, 4% per 45 days
  • Minimum invoice amount: $50,000

FK Construction Funding has funded over 300 construction projects in 36 states. According to Managing Director Frank Skelly, there are no long-term contract requirements. The only fee FK Construction includes is a $15 wire transfer fee.

“We allow clients to bill for mobilization,” said Skelly. “We also have a payroll funding program. We’ll fund payroll every week. A lot of guys find that useful. We’ll also provide credit reference letters. Basically, we help our clients get credit lines set up. A lot of contractors struggle and need help to get credit with their suppliers.”

Typically, the maximum invoice FK Construction Funding will cover is $5M. FK Construction can prequalify a contractor in one day. It takes about a week to become fully set up as a client and get funded. FK Construction also doesn’t offer spot factoring services.

“It saves time if the sub introduces us to the project management right from the get-go,” said Skelly. “We found that it’s very successful. The project managers feel like they’re in the loop from the early goings. Having [the sub’s] paperwork in order like pay applications and insurance is also important. If they don’t have it, it can slow down the process.”

nFusion Capital - Construction Invoice FactoringnFusion Capital

  • Advance Rate: 70 – 85%
  • Factoring Rate: 1 – 3.25% every 30 days
  • Minimum invoice amount: No minimum

While nFusion Capital doesn’t necessarily have a minimum invoice requirement, Vice President of Sales Luis Urena says that the company is very entrepreneur focused. That focus allows them to fund smaller deals that other competitors might not have an appetite for. Every project is unique to nFusion Capital, which allows them to fund opportunities from $20,000 through $10,000,000.

“Most competitors have a cookie cutter underwriting process. If it fits, great! If it doesn’t, then on to the next,” said Mr. Urena. “Our company really leaves no stone unturned. We try to see how we can get the deal across the finish line. We love to learn about our prospects. How did they get in the industry they are in? What led them to go out on their own and start a company? On every file, we ask the owner to send us a Bio. If the client has a great story, we figure a way to get it done – even if the file is a bit rough on the edges.”

nFusion Capital has an expense deposit ranging from $200 to $750.

When asked about getting invoices approved more quickly, Mr. Urena had some advice for contractors. “Know the correct project information, like the GC’s name and address,” he says. “Some business owners focus only on the projects they are currently working on, or the projects they are bidding on. That is all important, but they also need to know how to properly manage the back office. Aside from factoring invoices, we can also help the clients with basic bookkeeping services, keeping financials up to date, and making sure the suppliers are paid. All of this helps get them the funding they need.”

Working Capital of America website | construction factoringWorking Capital of America

  • Advance Rate: 70 – 95%
  • Factoring Rate: 0.9 – 3.5% per 30 days
  • Minimum invoice amount: $25,000

Working Capital of America (WCA) knows construction. “Our niche is construction,” says Daniel Galvan, VP of Business Development. “We mainly deal with construction companies and progress billing. We also have 13 years of construction factoring experience.”

WCA has an application process that takes about three days. From there, funding will be submitted between three and four business days.

Working Capital doesn’t charge an application fee, according to Galvan. However, subs will need to pay an additional origination fee of 0.5% of the funding amount. Administrative fees vary depending on the project size. Galvan estimated that a smaller-sized facility would have a setup fee of roughly $1,000. Working Capital has a minimum funding amount of $10K and a maximum of $5M.

How to get paid faster

If you’re frustrated with how fast payments happen on construction projects, you’re not alone. In a 2019 survey about construction payments, 98% of construction businesses said they have had to threaten a lien filing in order to get paid. Factoring your invoices may help speed up cash flow, but it comes at a cost. Fortunately, there are some other steps you can take to get paid faster on every project – and it doesn’t cost a thing.

  1. Make yourself visible. The first step is sending preliminary notice at the start of every single job. It lets the GC and property owner know you’re there, and sets an early, professional expectation.
  2. Send the right paperwork at the right time. Take the time to understand what the GC or owner expects with your payment application, and overdeliver. Use a pay application checklist to make sure you’re as thorough as possible. Before your payment is due, send a friendly invoice reminder.
  3. Communicate clearly and often. The parties at the top of a project want to make sure you’re paid on time – they have a vested interest in avoiding mechanics lien claims. When asked how subs can get invoices approved quicker, Daniel Galvan, VP of Working Capital of America, agreed. “It’s all about good communication with the GC,” he said.


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