TCI Business Capital is a factoring company that offers some of the largest financing available from alternative small business lenders. However, TCI also fails to be as transparent as other factoring companies.
The factoring company advertises several products on its website from accounts receivable financing to payroll funding, but all are essentially one service: invoice factoring. This is when a company sells its invoices in exchange for an upfront cash advance. This service can be a good option for businesses that need quick access to funds, especially while waiting for payments from slow-paying clients.
Because invoice factoring typically doesn’t require a strong credit history, it may be easier to obtain than a lower-cost business loan. It’s not a good option for businesses that can qualify for cheaper sources of funding or don’t have a large amount of outstanding invoices each month.
TCI Business Capital: Should you apply?
TCI Business Capital stands out from other factoring companies as it offers funding up to $20,000,000, but the company provides few details about the cost of its invoice factoring on its website. Rivals may not offer as much cash but give more information about rates and what’s needed to qualify. If you need less than $50,000, you are better off looking elsewhere.
Some companies, including trucking and freight companies, might enjoy extras such as a fuel card for truckers offering discounts of around $0.15 per gallon. TCI Business Capital also offers credit risk analysis, which can provide you with information about a potential customer’s credit and payment history so you can tell whether they’re likely to pay their invoices on time. These are unique benefits that aren't offered by many other factoring companies.
Competitors. TCI Business Capital has many rivals, such as altLINE, which allows you to obtain smaller amounts between $30,000 - $5,000,000. While TCI Business Capital and others do not publish their rates, some invoice factoring companies do, such as Paragon Financial, which charges 1.25 - 2.00% per 30 days for its services. BlueVine is another invoice factoring company which offers rates as low as 0.25% per week and provides a similar level of funding as altLINE of up to $5,000,000.
What does TCI Business Capital offer?
- Amounts between $50,000 - $20 million
- Fees depend on which of 3 types of rate structures you choose
TCI Business Capital offers invoice factoring, which isn’t a loan, although the results are similar: you get cash in exchange for sacrificing part of your future earnings.
With this arrangement, you sell your outstanding invoices to TCI Business Capital. The company then provides you with a cash advance, usually up to 90% of what the invoices are worth. Your clients then pay TCI Business Capital directly, and depending on how long it takes them to pay, TCI Capital will refund you a portion of the remaining invoice minus a certain percentage that they take out as payment for the service.
TCI Business Capital does not provide any details regarding fees or interest charges on its website. Instead, it only offers promises of its “low factoring fees.” TCI Business Capital offers three rate types:
- Flat invoice fee, regardless of how long it takes the customer to pay
- Tiered rate, where rates increase the longer an invoice goes unpaid
- Hybrid “Prime Plus” rate, with a flat invoice fee and an additional low fixed rate until the invoice is paid
Invoice factor rates make it difficult to compare the cost of financing with other options, by TCI Business Capital’s own admission. You may have no control over when your customers pay their invoices, so you won’t be able to calculate the true cost of financing until after you’ve factored your invoices and your customers have paid. It’s possible that the flat fee would give business owners more predictability, but again, without published rates, it’s unknown how expensive that option might be. It’s also unknown if there additional fees such as a processing fee for each invoice TCI finances or credit check fees. TCI Business Capital declined to answer questions.
Do you qualify for TCI Business Capital?
Again, TCI Business Capital provides scant information on its website about what’s needed to qualify for its invoice factoring, and instead, directs business owners to contact them. However, rivals such as BlueVine or Triumph Business Capital may have more lenient requirements — startups may even qualify with Triumph.
However, you will need to meet at least three criteria in order to apply for invoice factoring:
- Must bill for at least an average of $50,000 / month
- Provide B2B services or products
- Bill your customers on "net terms," which means that invoices are due within a specified amount of time after you send them out, not immediately
How to apply for TCI Business Capital
To apply for invoice factoring from TCI Business Capital, you’ll work one-on-one over the phone with a customer representative. The company doesn’t specify which documents are needed to apply, although it’s likely you’ll need a way to prove your outstanding invoices and your clients, such as with access to your accounting system or copies of invoices you’ve sent. You may even need to provide access to your bank account, which is typical with other invoice factoring companies. Other documents may include:
- Basic identifying information, such as name, address, email, phone number, etc.
- Basic business information
- Information required to grant TCI Business Capital access to your personal / business checking account.
You’ll get a relatively quick answer, possibly within 15 minutes. Once approved, you simply submit your invoices to TCI Business Capital. Your first funding could be as soon as in three business days. Once you’re in the TCI Business Capital system, however, you’ll receive funding on the same day you submit your future invoices.
TCI Business Capital versus other factoring companies
TCI Business Capital offers invoice factoring for a wide range of industries, specifically naming the trucking, construction, oilfield services and telecom industries. It doesn’t specify on its website that any particular industry is disallowed, so you don’t necessarily need to be in these industries to apply.
There’s no shortage of companies offering invoice factoring services just like TCI Business Capital. If you’ve already decided that invoice factoring is right for your business, you can narrow down that list further by first considering which types of companies will even be willing to work with you. For example, if you don’t bill for $50,000 worth of goods or services each month, you’re not even eligible for financing with TCI Business Capital. In that case, another lender may work better, such as BlueVine, which only requires $100,000 in annual revenue.
You can then consider contacting each company that makes your short list to see what terms it can offer you, since many companies such as TCI Business Capital don’t publish their rates and fees on their website. Make sure you crunch the numbers carefully to see what you’re likely to pay. Invoice factoring companies often list fees in different ways — for example, BlueVine charges a fee as low as 0.25% per week, while Paragon Financial charges rates between 1.25 - 2.00% per 30 days. By trying to keep your comparisons as similar as possible, you’ll help ensure making the best choice for you.