If your business is sitting on unpaid invoices while payroll is due on Friday, factoring can turn those invoices into cash within a day or two. The question is never really what invoice factoring is. You can find that anywhere. The questions that actually cost you money are which company to use, what you will really pay, and whether factoring is even the right tool for your business or whether you are about to lock yourself into the wrong one.
We fund Canadian businesses for a living, though not through factoring. That gives us a reason to be straight with you. We would rather you pick the right product, ours or someone else’s, than the wrong one. So this is a comparison of the factoring companies actually operating in Canada, what they charge, and an honest look at when factoring is a poor deal and you should walk away.
The Canadian factoring companies, compared
Figures below are typical or starting terms taken from each provider’s public information and independent reviews as of 2026. Most factors price each deal on your invoice volume, your customers’ credit, and your industry. Treat these as a guide, and get a written quote before you commit.
| Company | Advance rate | Factor fee (typical) | Facility size | Recourse | Best suited to |
|---|---|---|---|---|---|
| FundThrough | Up to 100% (full value, one fee) | From ~1.9–2.9% per 30 days, flat | Min $100k in invoices to one customer to start; no max | Recourse | Tech-enabled, fast single-invoice funding for B2B with large, creditworthy customers |
| Riviera Finance | Up to 95% (typically 85–95%) | From ~2%, flat-rate | ~$5k to $2m | True non-recourse | Established SMBs wanting full service and genuine credit protection; strong in trucking |
| Rev Capital | Not publicly disclosed (request a quote) | Not publicly disclosed (request a quote) | Not publicly disclosed | Both offered | Businesses wanting flexible funding frequency (daily or weekly) and high-touch service; staffing, logistics |
| Accord Financial | Up to 90% (75–90%) | Varies by risk, volume, facility size | $500k to $20m | Both offered | Larger established businesses needing $500k+ facilities or asset-based lending alongside factoring |
A note on reading this table. The advertised advance rate matters less than the all-in cost once you account for the fee structure. A 90% advance at a fee that escalates weekly can cost more than an 85% advance at a flat fee if your clients pay slowly. Ask every provider for the total cost on a sample invoice paid at 30, 45 and 60 days, not just the headline rate. That one question tells you more than any comparison table can.
One genuine difference is worth flagging. FundThrough advances up to the full invoice value rather than holding the usual 15 to 20% reserve, and Riviera offers true non-recourse, which only around a fifth of factors actually provide. For most businesses those two features matter more than half a point on the headline fee.
How it works, in one example
Factoring is simple in practice. You sell an unpaid invoice to a factoring company. They advance most of its value now, collect from your client later, and pay you the rest minus their fee.
Here is an illustrative example. The figures are for explanation, not a quote. You invoice a client $20,000 on 60-day terms. A factor advances 85%, so $17,000 lands in your account within a day or two. Sixty days later your client pays the factor the full $20,000. The factor takes a 2.5% fee, which is $500, and sends you the remaining $2,500. You received $19,500 of your $20,000, and you had the bulk of it two months early.
That early access is the whole point. Whether it is worth $500 depends on what the cash let you do. Make payroll. Take the next contract. Avoid a more expensive loan. That is a judgement only you can make.
Factoring versus invoice financing
These two get used interchangeably, and they should not be. With factoring you sell the invoice and the factor collects from your client, so your client knows. With invoice financing you borrow against the invoice and collect payment yourself, so your client never knows. Factoring is usually easier to qualify for and hands off collections. Financing keeps the client relationship entirely yours but puts the admin and the credit risk back on you. If client perception matters in your industry, that difference decides it.
What actually drives your rate
Factor rates are not arbitrary. Four things move them, and knowing them lets you negotiate.
Invoice volume is the biggest lever, because more receivables processed spreads the factor’s fixed costs further and pulls the rate down. Invoice size works the same way. It takes similar effort to collect a $2,000 invoice and a $50,000 one, so a few large invoices price better than many small ones. Your clients’ creditworthiness counts more than your own, because the factor is betting on them paying, not you. And your industry’s payment track record sets a baseline before anyone has looked at your specific book.
There is a smarter way to negotiate than haggling the fee down. Push instead for a higher advance rate, or for rate cuts tied to volume milestones. Those usually move more money than shaving half a point off the headline rate. A business with large invoices to blue-chip clients can push hard. A business with small invoices to shaky payers will pay for the risk wherever it goes. If you want to understand how that headline rate is built in the first place, our plain-English guide to factor rates breaks it down.
When factoring is a bad deal, and what to use instead
Here is the part a factoring company will not write, because they only sell factoring.
Factoring is a poor fit, and sometimes an expensive mistake, in several common situations. If you do not invoice, because you are a restaurant, a shop, or a B2C business taking card payments at the till, there is nothing to factor, and a provider who signs you up anyway is selling you the wrong product. If your margins are thin, a 2 to 4% factor fee on every invoice can swallow the profit on the work. For a business running at 8% net margin, factoring half your revenue is not a cash flow fix. It is a slow bleed. If your clients are sensitive about a third party chasing their payments, and some industries and key relationships genuinely are, notification factoring can cost you the relationship to save the cash flow. And if you only need cash once, for a specific gap, the ongoing commitment of a factoring facility is heavier than the problem.
In those cases the businesses we see do better with a different tool. For card-taking businesses without invoices, a merchant cash advance funds against your actual sales and repays as a percentage of them, so there is nothing to factor and nothing to explain to clients. For a one-off need, a short-term facility you can close out beats an open factoring agreement. The honest rule is this. Factoring suits B2B businesses with sound clients and reasonable margins who invoice regularly and need that gap bridged again and again. Outside that, look elsewhere.
We fund the businesses factoring does not serve. If you take card sales rather than send invoices, that is the conversation to have. Our team has written more on whether a merchant cash advance is right for your business, and you can work through the tool below to see which side of the line you fall on.
Work out which fits you
The tool above is a starting point, not a verdict. It weighs the few things that most often decide between factoring and an advance: whether you invoice, your margin, your client mix, and whether the need is one-off or ongoing. If it points you toward an advance and you want to talk it through, that is what we are here for.
Common questions
Is invoice factoring a loan?
No. You are selling an asset, the invoice, not borrowing against it. It does not add debt to your balance sheet, and there is no interest in the traditional sense. You pay a factor fee instead.
Will my customers know I am factoring?
With factoring, usually yes. The factor collects from them directly, which is called notification factoring. If you need them not to know, invoice financing, where you still collect, is the alternative.
How fast is the money?
Most factors advance within 24 to 48 hours of approving an invoice once you are set up. The initial setup takes longer, usually a few business days.
What credit score do I need?
Your clients’ creditworthiness matters more than yours, because the factor collects from them. A weak personal credit score is far less of an obstacle than it would be for a bank loan.
Can I factor just one invoice?
Some providers, FundThrough among them, allow single-invoice or selective factoring with no contract. Others require you to commit your whole ledger. If you only want to factor occasionally, ask about this specifically before you sign.
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