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BlueVine Review: Best B2B Factoring Service

BlueVine Review: Best B2B Factoring Service
Credit: BlueVine

We recommend BlueVine as the best B2B factoring service. We chose BlueVine from dozens of factoring services. To understand how we made our decision, you can find our methodology and a list of factoring services on our best picks page.

BlueVine is an ideal factoring service for smaller B2B companies that need to qualify for financing. In addition to BlueVine's factoring service, which provides fast funding without a long-term contract, the company also offers lines of credit for businesses that have been in existence for at least half a year. Lines of credit from BlueVine feature low rates and no obligations.

BlueVine costs 1 percent of the total invoice value with a minimum term of three weeks. BlueVine advances 85-90 percent of the total invoice value upfront and pays you the remaining balance, minus fees, after customers have paid their invoices in full. Businesses can get financing for $5,000 up to $500,000 in as little as 24 hours.

Most factoring services have strict requirements that automatically disqualify many small businesses. We like that BlueVine makes it easier to qualify for invoice financing or a line of credit by being more accommodating to B2B small businesses.

We like that BlueVine takes a holistic approach to evaluating businesses. The company considers everything from your customers to your business' cash flow, financial history, reputation and quality of invoices.

To qualify for BlueVine's invoice financing, you only need to have been in business for three months and have a minimum revenue of $10,000 per month.

To qualify for a line of credit, you'll need to have been in business for at least six months. This option has a lower revenue requirement of at least $5,000 per month.

BlueVine also works with business owners who have a below average credit score. The minimum credit requirements are a credit score of 530 for invoice financing and 600 for a line of credit. Although BlueVine looks at your personal and business credit scores, we like that the company puts more weight on customers' credit worthiness than its owners'.

In addition to evaluating your business, BlueVine will also assess your invoices. For invoices to be approved, here's what BlueVine is looking for:

  1. Services rendered are complete or product delivered and accepted by customers
  2. Minimum of $500 with due dates of at least one week away up to 90 days
  3. Payment term of less than 12 weeks
  4. US- or Canada-based B2B customers

Editor’s Note: Looking or information on factoring services? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need:

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For most factoring services, the application process is long and arduous. It typically requires an extensive application form and all types of paperwork, such as tax forms, financial statements and legal documents. BlueVine, however, makes applying for financing a breeze, so you can quickly get the money you need. It only takes a few minutes to complete the application, and the only documents the company requires are bank statements and your invoices.

1. Sign up for a free account at BlueVine.com

You'll need the following information:

  • Type of financing and amount desired
  • Name, phone number and email address
  • Business details, such as legal name, structure, address, annual revenue and Tax ID
  • Owner's information, such as name and social security number

If you use QuickBooks, you can skip parts of the signup form by clicking on the blue "Connect with QuickBooks" button. This automatically pre-populates much of the required information, saving you time from having to manually fill them in. [See Related Story: Best Accounting Software for Small Business]

2. Submit bank statements

BlueVine requires your last three most recent bank statements. You can submit them yourself or, to save time, grant BlueVine read-only access to your business' bank account.

3. Submit invoices

We like how easy it is to submit invoices to BlueVine. One option is to manually create invoices using your BlueVine dashboard. Another is to submit existing invoices by connecting your accounting software. BlueVine is compatible with QuickBooks, Xero and FreshBooks accounting software.

There are several benefits to connecting your accounting software to your BlueVine account. First, doing so syncs your data, so invoices appear right on your BlueVine dashboard. All you have to do is choose which invoices need funding and submit them with just one click. Another perk is that connecting your accounting software could help you qualify for a higher credit line.

We also like how fast BlueVine processes approvals. The company typically makes a decision within 24 hours. Once you've been approved, you can withdraw funds at any time. The company also claims that you can receive funds in as fast as just a few hours after your request.

To help us get a better idea of how BlueVine compares to other B2B factoring services, we asked the company, as business owners and potential customers, how the service works and what we should expect. We learned that BlueVine makes the process very simple, and that funding is fast and flexible — once your application has been approved, you can start getting funds immediately.

BlueVine's invoice financing works the same way as the majority of factoring services: the factor advances a percentage of the total invoice amount; the remaining balance is sent once customers have paid their invoices in full.

Here's how BlueVine's invoice financing works:

  1. BlueVine advances you 85-90 percent of the total invoice amount
  2. Customers pay BlueVine under your business name (more on this below)
  3. BlueVine pays you the remaining balance, minus fees

Funds are sent via money transfers, which can be completed in as fast as 24 hours, but can take up to 72 hours depending on the financial institutions involved.  

BlueVine's invoice financing option has a maximum credit line of $20,000 to $500,000 with a term length of 12 weeks. The exact dollar amount depends on several factors as outlined in the minimum requirements above.

Like its invoice financing service, BlueVine lets customers borrow any amount from their line of credit immediately after approval. Because it's a line of credit, there is no need to split up funding and wait until customers pay to get the full amount. You can also withdraw funds against your available credit at any time.

Your available credit depends on several factors. You can expect a credit line starting at $5,000. Note that credit lines are only available up to $50,000 and a term length of 26 weeks.

We like that BlueVine has a repayment system that's a win-win for everyone. Whereas many factoring services require your customers to make payments to their company — which is both inconvenient and a concern for many customers and business owners alike — BlueVine lets customers pay you on the company's behalf.

For its invoice financing service, BlueVine simply sets up a bank account in your name. This way, customers don't have to know that their payments are going to third party and BlueVine gets access to payments without any work on your end. The company takes their fees from that account after customers have paid, and then wires the rest to you.

If you don't mind letting your customers know that you are using a factoring service, BlueVine may have a special perk for you: a higher credit line. This will require a notice of assignment, which is a formal letter informing customers about your relationship with BlueVine and where to redirect their payments.

For its line of credit option, you are required to make payments in weekly installments for 6 months. You can also pay early to avoid accrued interest for the rest of the loan's term. 

Pricing is one of the most confusing parts of using a factoring service. We like how that BlueVine keeps it simple — and that you'll save money, too!

BlueVine charges low, flat rate of 1 percent of the total invoice value. This is an excellent price point for small businesses, considering that the usual rate can be as high as 6 percent. There is also a $15 wire transfer fee, which is waived if you choose the free ACH funding option.

Loyal customers can save even more money: BlueVine offers discounts of up to 30 percent of its standard rate as you build history with the company. Additionally, businesses that have invoices of more than $30,000 per month can get a custom quote by speaking with an account representative.

There are also no prepayment penalties — so you can pay early to avoid accrued interest — and no origination, application, maintenance or termination fees.

However, BlueVine does have late fees that may or may not be a deal breaker for your business. Find out more about late fees below.

BlueVine's line of credit rates start at 6.9 percent, plus a 1.5 percent draw fee each time you withdraw funds. You can withdraw as little or as much as you want up to your credit limit, and BlueVine won't charge you an extra fees if you don't use up the entire line of credit available to you.

Like its invoice financing option, BlueVine does not have prepayment penalties, which can help you save a little bit of money if you pay before the term of your loan ends. Per the company's example, say you withdraw $10,000 from your line of credit. If you take the entire 6 months to pay off the loan, the total amount you will have paid is $10,830. If you pay within 4 weeks, however, you'll save about $600 with a lower total repayment of $10,227. 

Although we are a fan of BlueVine, the company does have some limitations that may not make it the right factoring service for your business.

The biggest drawback to using BlueVine is that it is a recourse factoring service, which means you are responsible for any unpaid invoices. You know your customers best — and how much of a financial burden your business can shoulder — so it's up to you to decide if you are willing to take that risk. To learn more about recourse factoring, visit our Factoring Buyer's Guide.

Another drawback are late fees if you or your customers don't pay. BlueVine charges up to 3 percent of the amount due plus a recurring daily fee of up to 0.3 percent. The company does allow you and your customers a two-week grace period past the due date before late fees kick in.

The good news is that BlueVine wants to help you succeed — if you are struggling, the company offers an installment plan to help you get caught up and settle your customers' balances.

Additional reporting by Adam C. Uzialko.

Ready to choose a factoring service? Here's a breakdown of our complete coverage:

Editor’s Note: Looking for information on factoring services? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need:

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Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.