- Invoice factoring
- Lines of credit
- Low entry qualifications
- No maintenance fees
- No lockbox fees
- No long-term contracts
- Fast time to funding
- Excellent customer service
BlueVine, an online lending service, was founded in 2013 after the founder watched his father, a physical therapist, struggle with inconsistent cash flow due to slow payouts by insurance companies. It shouldn’t come as a surprise, then, that the company offers a number of products intended to help merchants overcome cash flow problems.
In particular, for many years this company has been offering invoice factoring —a type of business financing in which unpaid invoices are sold at a discount in exchange for immediate cash. More recently, the company has also introduced traditional lines of credit.
In the past, invoice factoring has gotten a bad rap. Some factoring companies come with high price tags, confining contracts, extra fees, and overbearing collection tactics. Add all that together, and what’ve you got? A service that’s a huge pain not only for you, but for your customers as well.
However, lenders like BlueVine (and its competitor Fundbox) have streamlined and de-complicated the process. These new invoice financing services tend to be much more flexible than their old-school predecessors. You have more control over which invoices you choose to finance, and you won’t have to sign any long-term contracts or pay a bunch of extra fees.
Still, BlueVine’s services can get a little expensive. Their invoice factoring services carry fees between 0.3% – 1% per week, which translates to APRs of roughly 15% – 60% (APRs don’t work perfectly in short-term financing—go here to learn more). In other words, if a $1K advance is repaid in three weeks, it will cost you $9 – $30. If the advance isn’t repaid until week nine, the cost will be $27 – $90.
As for their lines of credit, the fees range between 0.35% – 1.2% per week, which is about 21% – 65% annually.
That being said, as long as you understand the costs, BlueVine offers some fantastic services. This lender requires a minimum of three months in business to qualify for invoice factoring and six months to be eligible for a line of credit. Businesses that young don’t generally have very many financing options. (Not to mention that the other options available to newer businesses often come with much higher price tags.)
The bottom line is, BlueVine offers convenient and useful services for merchants that struggle with cash flow problems. Interested in learning more? Read on for the details!
Here’s what you need to qualify for either one of BlueVine’s services:
|Invoice Factoring||Line of Credit|
|Time in business:||3 months||6 months|
|Other:||Must run a B2B business||N/A|
Additionally, lines of credit are not available in Kentucky, Tennessee, Nevada, Vermont, New Hampshire, North Dakota, and South Dakota.
Rates and Fees
Here are the stats for BlueVine’s invoice factoring services:
|Credit facility size:||$20K – $2M|
|Term length:||Max 12 weeks|
|Interest:||0.3% – 1% per week|
|APR:||Approx. 15% – 60%|
BlueVine offers credit facilities up to $2M, though the amount you can borrow will depend upon a number of factors.
When you are approved to do business with BlueVine, the company will set up a bank account in your name, which they have access to. When you get your new bank account, you can update the payment information with your customers. When the customer deposits their payment, BlueVine will take their cut, and send the rest along to you. If you didn’t request an advance on a certain invoice, BlueVine will simply send all the money along to you when the customer pays.
Because the bank account is in your name, the customer will not know about the money advanced to you. However, BlueVine might offer you a larger line of credit with the stipulation that they are allowed to notify your clients about the arrangement. This is called notification financing (read about it here). Some merchants are concerned that it will reflect poorly on their business if the customer knows the merchant is using an invoice factoring service. Truth is, factoring is so old and commonplace that most clients, especially larger clients, are used to such arrangements. Regardless, the choice is yours.
To redeem an invoice for cash, your invoice has to meet these requirements (via the FAQ):
- Payment term is 12 weeks or less
- Due date at least 1 week away
- Invoice is at least $500
- The service or product is completed and delivered
- The customer is a business
- The customer is US- or Canada-based
When you request money, BlueVine will advance you a maximum of 85% – 90% of the invoice. When the invoice is paid by your customer, you’ll get a rebate of the remaining 10% – 15%, minus the fees that have accrued.
Here’s an example: you redeem a $1,000 invoice. BlueVine advances you $850. Your customer pays you in four weeks, so there is a $40 fee. At the end of the process, you’ll get a $110 rebate.
BlueVine does not charge application fees, maintenance fees, origination fees, or lockbox fees for their invoice factoring. They also do not require a long-term contract. There are only two potential extra fees you can incur: a bank wire fee, and late fees. The bank wire fee is $15, but can easily be avoided by using ACH transfer. Late fees are incurred after a two-week grace period. If you or your customers don’t pay before then, the fee is 2% to 3% of the amount due, with a daily recurring fee between 0.2% and 0.3% until the debt is settled.
Here are the rates and fees for lines of credit:
|Credit facility size:||$5K – $100K|
|Term length:||6 months (26 weeks)|
|Interest rate:||0.35% – 1.2% per week|
|Draw fee:||1.5% per draw|
|APR:||21% – 65%|
BlueVine’s traditional line of credit currently caps at a maximum of $100K though, again, the amount you can borrow will depend on a number of factors.
Once approved, you can draw funds up to your available credit line at any time you want. Be aware that there is a 1.5% draw fee whenever you request funds from your credit line. Otherwise, BlueVine does not charge any extra fees.
Repayments are made in 26 weekly installments, though you can repay early at any time. If you do so, you’ll only have to repay the interest that’s accrued up to that point. BlueVine does not charge a prepayment penalty.
Application for both services is simple: create an account via the website and answer some basic questions about yourself and your business. You’ll also have to provide either the most recent three months of bank statements or allow read-only access to your bank account.
You’ll have the option of hooking up your accounting or invoicing software, but it isn’t required. If you’re interested in invoice factoring but don’t use software compatible with BlueVine, you’ll be able to create invoices right in BlueVine’s interface. Currently, the company works with:
Once you give your phone number, expect a call from a BlueVine rep, who is there to walk you through the process and answer any questions.
Approval is based on a number of factors. Your credit score is a consideration, but they also look at factors such as social media presence, business history, transaction volume, and the creditworthiness of your customers.
According to the BlueVine website, your initial approval for either service will take about 24 hours. When approved, you can begin drawing from your credit line or redeeming invoices immediately. Money transfers normally take one to three business days. However, if you’re redeeming an invoice unfamiliar to BlueVine, expect a 24-hour delay because BlueVine has to assess the creditworthiness of your new customer.
Sales and Advertising Transparency
BlueVine provides excellent transparency. They provide a nice video explaining the invoice factoring service, which is always good to see when you’re dealing with a potentially confusing factoring model. They fully disclose all rates and fees, there’s an easy-to-understand payments calculator on the pricing page, and there are not one, but two FAQs. The customer service is similarly transparent and willing to answer questions.
Customer Service and Technical Support
Customer service is available by phone Monday through Friday, 9:00am – 6:00pm PST. You also have the option to email BlueVine via the contact page. For less formal contact methods, they have a Twitter and a Facebook.
The general consensus, including my own experiences, is that BlueVine reps are very responsive, whichever way you choose to contact them. And if you’re not in the mood to talk to somebody, they’ve also got two different FAQs.
Negative Reviews and Complaints
BlueVine has a truly impressive track record regarding complaints.
The company is accredited by the Better Business Bureau with an A+ rating and very few complaints. Additionally, BlueVine also has a presence on the Intuit QuickBooks app center, TrustPilot, and Facebook. The reviews are largely positive in all places.
Regardless, here are the complaints customers had regarding the service:
- Denials: Some reviewers were frustrated to learn that they had been denied for funding, even though they thought that they had met all of BlueVine’s requirements. A few were further frustrated because they felt they were not given a clear reason why they were rejected.
- Expensive fees: The fees may be a little higher than some customers would like.
Furthermore, a few customers have complained that they have little control over fees in regards to invoice factoring. Because you are relying on your customers to repay, you risk racking up fees on net-60 or net-90 invoices. Merchants in this situation could, if possible, self-pay to halt the buildup of fees, or simply try to take advances on their invoices that are due sooner. Obviously, this is not a problem with BlueVine’s lines of credit.
Positive Reviews and Testimonials
If you’re feeling up to it, you could spend a good chunk of your day reading positive reviews of BlueVine. They’ve got a Facebook page, a TrustPilot page, and a bunch of reviews on the Intuit QuickBooks app store. Almost exclusively positive reviews are featured on all fronts. For example, about 98% of the reviews on the TrustPilot page have rated BlueVine four or five stars.
In general, merchants just like the idea of streamlined invoice factoring. Waiting around for your clients to pay can be hard on your cash flow and, as a result, on your business. Having the option of getting an advance on your invoices, even if it costs a bit of money, offers significant help and peace of mind.
More specifically to BlueVine, customer like the:
- Prompt customer service
- Transparent advertising
- Easy application process
- Fast time to funding
BlueVine has an excellent online reputation, but their line of credit is so new, there are very few (if any) reviews available. Have you gotten a line of credit from BlueVine? Leave a message in the comments! We’d love to hear what you think.
If you run a small business that struggles with cash flow, BlueVine may have a solution that works for you.
No, BlueVine doesn’t have the best fees you’re ever going to run across. However, the convenience of their products, the promptness of their service, the lack of extra fees, and their willingness to cut costs for repeat customers make up for the semi-expensive capital.
And, because BlueVine doesn’t have any long-term contracts or maintenance fees, there’s nothing stopping you from getting an account and giving the service a go.
Interested in invoice financing, but don’t think BlueVine’s the service for you? Check out its competitor Fundbox. Can’t decide which is right for your business? Read our comparison of the two services.