Bluevine Invoice Factoring

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Bluevine Factoring Information:

  • Bluevine Headquarters: Redwood City, CA
  • In Business Since: 2014
  • Direct Lender: Yes
  • A+ rated by Better Business Bureau

About Bluevine

Bluevine, located in Palo Alto, California, provides a variety of funding options including invoice financing and accounts receivable factoring.

The company was founded by Eyal Lifshitz, a former venture capitalist at Greylock Partners. Lishitz reportedly remembers the hassle of waiting for payment reimbursement from various health insurance companies and Medicaid from his father’s physical therapy business. This led Eyal to eventually start his online factoring company.

An invoice factoring company, known as the factor, purchases outstanding invoices at a discount to their face value and advances a percentage to the customer. Doing so provides clients with near-immediate funding, while the invoices remain unpaid by the account debtors. When the invoices are eventually paid, the remainder of the percentage, less the factoring fee, is returned to their customer. Also, rebates are distributed the same day.

Unlike traditional invoice factoring companies, Bluevine provides online factoring. Similar to online competitors such as Fundbox, there is no paperwork. However, Fundbox is not a true factoring company and has limited communications with customer service representatives.  At Bluevine, there are representatives available to help.

Bluevine Invoice Factoring

Bluevine generally advances between 85% and 90%, as quickly as the same day if you opt for an immediate wire transfer. While this will cost you $15, it allows same day funding instead of potentially 3 day funding with a free ACH transfer. If you are in a real cash flow bind, the wire is probably the way to go.

A major difference between Bluevine and some factoring companies is the transparency of fees. Certain factoring companies have the reputation of having different layers of fees, sometimes hidden. Their fees are displayed right on their website for all prospects to see.

Small businesses are the focus at Bluevine and they can factor invoices as small as $500. Also, they have credit lines as low as $5,000. Unfortunately, they do not engage in factoring receivables from the medical or healthcare companies.

Bluevine Invoice Factoring Info:

  • Application Time: 5 Minutes
  • Funding Approval Time: Within 24 hours
  • Advance Rates: Usually 85-90%
  • Monthly Minimum: No
  • Dedicated Rep: Yes
  • Minimum Invoice Amount: $500

Bluevine Asset Based Lending

When your business “graduates” from invoice factoring, it has access to more traditional business lending opportunities such as a small business line of credit or a commercial loan. In addition to accounts receivable factoring, Bluevine provides alternative financing solutions for small businesses looking to improve cash flow. These solutions include both factoring and asset based lending.

Asset-based loans can be backed by nearly any asset-inventory, equipment, real estate, accounts receivable, etc. but Bluevine predominantly looks at unpaid invoices. Typical lines of credit range from $5,000 to $250,000 but are advertised to as high as $2.5 million on their website. The more equipment and inventory your business has, the higher the credit line.

Their asset based lending solutions include revolving credit lines with rates advertised as low as 4.8% (from Bluevine’s website August, 2017). Further, there are no prepayment fees, maintenance fees and borrowers don’t incur unused credit fees (typical among many alternative lenders).

Further, the credit line amounts and terms are valid for two weeks only. So, if you get approved for a credit line and are on the fence on whether to tap into it, realize the line could change or be removed entirely after 14 days. This stipulation is certainly not unique to Bluevine.

Line of credit rates are also generally variable so if you anticipate rising interest rates, it might make sense to tap the line sooner than later.

Invoice Factoring Company Review: Bluevine

Overall, we have liked what we have seen from Bluevine, especially with respect to their ease of use and their financial backing and financial resources.

Simplicity

Small businesses can open up an account by entering a few pages of information online, uploading bank statements and connecting to Bluevine’s accounting software.1 They currently work with accounting software from Freshbooks, Intuit’s Quickbooks and Xero.

In terms of processing, they can usually approve the first payment within one day.2 We found a few reported cases when customer accounts took a few days to open, but that appears to be the vast minority. Going forward, they typically approve payments in under one hour.3

Resources

While it might not share the deposit base of a commercial bank like many factors, Bluevine is backed by some deep pockets. It is backed by venture capital firms such as 83North and Lightspeed Ventures. As of September 2015, the company has funded somewhere between $50 and $100 million of invoices.4 Not too shabby for a firm that was created in March 2014.

Having said that, it’s important to remember the company primarily serves small businesses. Even though they have the resources for medium and larger sized companies, we have seen some issues reported by larger customers when the funding starts to get on the higher side (presumably stemming from their online factoring model). These had to do with safeguards they put in place for verification for significant financing. Still, these reports were in the minority.

Should I be Factoring Receivables with Bluevine?

If you are a small company that is looking for true invoice factoring, we are impressed with Bluevine. They have taken the factoring industry into the 21st century and have caused many other factoring companies to step up their game to compete. Keep in mind, the company does not factor receivables in the healthcare or medical industries.

Other Invoice Factoring Companies like Bluevine:

 

1,2,3https://www.forbes.com/sites/amyfeldman/2016/01/20/startup-bluevine-gets-40-million-as-once-stodgy-invoice-financing-becomes-the-latest-tech-craze/#5dd7ca585704

4https://www.forbes.com/sites/amyfeldman/2015/09/10/the-new-invoice-financing-online-players-bluevine-fundbox-and-c2fo-are-transforming-the-market/#7430d29951c5