Paragon Financial Group Review: Invoice Factoring for High-Volume Businesses

Paragon Financial
Paragon Financial

Paragon Financial Group Review: Invoice Factoring for High-Volume Businesses

We recommend Paragon Financial to borrowers who can't qualify for more traditional forms of financing and regularly have outstanding invoices due.

Good for

  • Fast financing.
  • Borrowers who have lower personal credit scores.
  • Credit protection.

Bad for

  • Transparent and cheap financing.
  • Borrowers looking for traditional financing like term loans or business lines of credit.
  • Borrowers who don't have extremely strong sales or revenue.

Editor's Rating


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Paragon Financial Group is one of our top-recommended factoring companies for large business-to-business (B2B) or business-to-government (B2G) companies. Paragon Financial has been a leading company in the invoice and accounts receivable financing space for more than 25 years.

Paragon offers some of the most competitive factoring rates we've seen, and the company has a number of other benefits such as its Non-Recourse Factoring through Credit Protection program, which protects businesses from customers who go bankrupt.

Paragon Financial: Should you apply?

Product Details

  • Cash Advance Amount: 80 - 90% advance
  • Rates: 1.25 - 2.00% discount rate per 30 days
  • Term: 12 months

Paragon Financial is a great factoring company for businesses that generate at least $360,000 in annual revenue. Paragon offers competitive rates and is willing to work with startups and business owners who have lower personal credit scores. Paragon collects outstanding invoice payments from the customers who need to fulfill them, so Paragon won't check your personal credit score.

Overall, Paragon Financial stands out compared to other factoring companies. Its credit protection services are a clear differentiator, but its high revenue requirement makes it a more difficult factoring company to work with.

Paragon Financial pros

Competitive rates: Paragon's low 1.25 - 2.00% discount rate per 30 days make Paragon one of the most attractive factoring companies in the market. Because Paragon only works with large companies, the customers they collect invoice payments from are likely to be strong as well, which results in lower fees.

Non-Recourse Factoring through Credit Protection: In the event that a customer goes bankrupt and is unable to pay the invoice, Paragon provides protection for approved customers. Paragon incurs the transactional risk here rather than passing it on to the borrower. This isn't a common feature among factoring companies.

Lenient requirements: Since many small-business lenders typically approve borrowers based on metrics like age of operations and personal credit scores, it's very hard for startups and business owners with low credit scores to find financing. Factoring companies, however, rely on the financial strength of the customer who is liable for the outstanding invoices, not your business. So businesses with weaker financials but strong cash flows will benefit from factoring with Paragon.

Paragon Financial cons

Higher costs than traditional financing: Invoice factoring will almost always be more expensive than traditional financing, such as a term loan or a business line of credit from a bank. However, many businesses can't qualify for traditional financing, which is why they turn to alternatives like Paragon.

High revenue requirements: Paragon Financial is clearly best-suited for businesses with strong cash flows. If your business isn't generating at least $360,000 in annual revenue, you'll need to look elsewhere.

Doesn't service B2C businesses: Most factoring companies don't offer invoice financing for business-to-consumer (B2C) companies, and Paragon is no exception. B2C companies looking for financing are encouraged to apply for alternative financing if possible.

What does Paragon Financial offer?

Paragon is an accounts receivable and invoice financing company. Paragon differentiates itself by acting as a recourse factoring company, which is relatively rare, and it also requires that customers have very strong cash flows. Since this allows for Paragon to only work with larger companies, the risk of invoices not being paid is relatively low. Because this risk is lower, Paragon charger lower fees than most other factoring companies.

How does Paragon provide financing?

  1. You present Paragon Financial with invoices that you'd like to finance.
  2. Paragon assesses the financial profile of the customer behind each outstanding payment and selects the invoices it's willing to finance.
  3. Paragon will provide a cash advance of 80% for businesses in imported and manufactured goods or 90% for businesses in staffing, information technology (IT), nursing, security and other labor service providers.
  4. Paragon charges a factoring fee every 30 days that the invoice remains outstanding.
  5. Once the customer pays the invoice, Paragon will deliver the full value of the invoice less factoring and relevant fees.

Do you qualify for Paragon Financial?

Most factoring companies, including Paragon Financial, will mostly assess the customers who owe money on your outstanding invoices. For startups and business owners with low personal credit scores, this makes factoring companies great alternatives compared to traditional lenders like banks or even online lenders, which typically base approval on personal credit scores and how long a company has been open.

Compared to other factoring companies, however, Paragon Financial is relatively strict. Businesses are required to bring in $360,000 in annual revenue, which is extremely high. Only larger businesses with strong financials can meet this requirement.

How to apply for Paragon Financial

Applying for Paragon Financial is relatively simple even compared to most other online lenders and factoring companies. It's extremely straightforward and the process can be completed by phone or web. The only downside is that application processing takes at least 3 - 10 business days, which is slower than most short alternative loans from other online lenders.

Documents required:

  • A list of customers whose invoices you're looking to finance.
  • The most recent accounts receivable and accounts payable aging reports
  • Articles of incorporation or DBA filing
  • A sample invoice

Once you've completed your online application, a Paragon Financial representative will contact you and provide details about fees, repayment plans and more.

How does Paragon Financial compare to other online lenders?

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While we strongly recommend Paragon Financial to business owners who are interested in invoice financing, we also always recommend shopping around to secure the most competitive terms.

Paragon Financial vs. BlueVine


BlueVine is a more suitable factoring company for businesses that can't meet Paragon's high revenue requirements. BlueVine only requires that businesses make $100,000 in annual revenue. BlueVine's rates may be higher, but its lower revenue requirement makes it widely accessible.

However, those with poor personal credit scores may not find BlueVine to be a suitable lender. BlueVine requires a minimum personal score of 530, while Paragon Financial doesn't take your personal credit score into consideration. We'd recommend Paragon Financial over BlueVine as long as your business meets Paragon's revenue requirement.

Paragon Financial vs. altLINE


AltLINE is another factoring company that offers similar financing services to Paragon Financial. It has some of the most relaxed eligibility requirements we've seen in the market. The only requirement is that your business must be B2B or B2G. Compared to Paragon Financial, it's a far more accessible option.

The biggest downside to altLINE is that it doesn't make its fees and rates clear before applying. In order to get a sense of cost, you'll need to fill out an application. Also, Paragon Financial offers protections in the rare case that your customer is unable to pay the invoice, which altLINE doesn't offer. AltLINE will require you to settle an invoice if the customer doesn't pay.

Paragon Financial vs. Triumph Business Capital

Triumph Business Capital
Triumph Business Capital

Like altLINE, Triumph is a factoring company backed by a bank. Triumph is similar to Paragon in many ways, but it offers more lenient eligibility requirements than Paragon. Triumph only requires an annual revenue of $100,000 and a personal credit score of 500.

In addition, Triumph also offers nonrecourse factoring, which means Triumph assumes the risk of customers not paying their invoices. This is a crucial benefit that both Triumph and Paragon provide.

Comments and Questions

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