Noble Funding provides a range of lending options for small businesses. It offers high-interest, short-term loans and also works with various other lenders to pair small businesses with the right funding. While it functions as a loan coordinator, Noble also provides funding through its own programs. These options include traditional invoice factoring as well as A/R credit lines. Based on customer service and reputation, commitment to finding the right loans, and lending experience, Noble Funding earned our best pick for Best Alternative Lender for invoice financing in 2019.
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Invoice Financing Services
The invoice financing loan from Noble breaks down into two types: invoice factoring and A/R credit lines. Traditional invoice factoring can be set up through Noble Funding for smaller businesses looking to get an advance on their invoices. Noble told us that the A/R line of credit offering is suited for businesses with 90-day accounts receivable at $500,000 or more.
There are some differences between the overall structure of each offering, but the goal is the same: Improve cash flow by getting an advance on outstanding receivables. Invoice financing is ideal for small businesses with large outstanding invoices. The company can help you get funds up front so you can better manage cash flow and invest in your business's growth. Noble will partner you with a bank and you can get an 85% advance on outstanding invoices. Some industries, like trucking, will qualify for a higher percentage like 90%.
Rates and Terms
The overall structure of invoice factoring involves a discount rate. Instead of an interest rate, this 1 to 3% fee is taken as each invoice is paid off. Depending on what kind of agreement you sign, this rate may fluctuate as invoices remain unpaid, though it will stay in this range. In addition to the bank's discount rate, Noble gets a fee at the time of the funding. This fee is usually around 3% of the total amount, but the sales representatives we spoke with said the company would accept 1% for our business.
Business with 90-day receivables over $500,000 can qualify for an A/R credit line. This invoice financing loan product functions like invoice factoring, but it is a line of credit. You borrow a certain amount against your accounts receivable and can draw on that amount as needed. Noble sales representatives described it as a revolving line of credit, meaning that the amount you can draw will fluctuate as outstanding invoices move up and down. The A/R credit line has a more complex fee and rate structure and is ideal for larger businesses.
Another reason why it may be harder to take out this type of loan is because your business needs to have strong, reliable collection and invoicing processes in place. As your company is evaluated by banks and companies like Noble, they will assess these processes and financial documentation to understand if an A/R credit line is right for your business.
In addition to a solid A/R line of credit offering, Noble provides and arranges several other types of business loans. Businesses can take out long-term traditional loans, cash advances and unsecured business loans, as well as equipment financing, inventory loans and purchase order financing. Rates and terms vary highly depending on your business's financial situation, but it's good to know that there are various other loan products if you don't qualify for an A/R line of credit, or if another option makes more sense for your business. For instance, long-term loans have rates starting at 9.99%, and terms ranging from three to five years. Fast cash business loans can be granted for up to $2,000,000, and can be issued in just two to three days. The variety of loan products makes Noble a good alternative lender for small business owners.
In addition to solid terms and rates, Noble provides other features that make its loans a great option for business.
The loan process with Noble starts when you contact the company for a quote. A Noble sales representative analyzes your business's financial history and will establish an overall offer. Depending on what type of loan you decide on, it will match you with a bank and help facilitate the loan process. You'll likely have to provide basic business information and financial documentation that proves you own the business and that you have income required for a loan. Once you get an initial quote, you'll be able to formally accept the proposal and continue with the loan process.
The terms on invoice financing aren't like traditional business loans. Instead of paying off principal and interest for a set amount of time, the term extends until the factoring or line of credit finishes. In other words, there's generally no defined term. Businesses have to pay back their loan as money comes in from the outstanding invoices.
There are two baseline qualifications to get financing. The first is that the unpaid invoices must be at least 90 days old. Second, they must total at least $500,000. From here, your business's financial history will determine the overall rate on the line of credit.
For invoice factoring, Noble can work with just about any business size. Noble representatives told us that personal credit scores don't factor heavily into the decision-making. The one major issue that could prevent a business from obtaining a loan was if a lien was placed on a business's assets. However, it's important to note that banks often look at your customers' financial operations and credit history through a third-party credit check. This allows the organization to assess the financial stability of your customers and get a better idea of your customers' reliability when it comes to repaying the loan.
Noble said that if there are some customers with a rocky credit history, banks may not finance those customer's invoices, but you can still get funding on your other customers. Otherwise, Noble can work with you to get the right loan for your business's size – whether that's an invoice financing loan or another type of loan that Noble can facilitate or offer.
For the invoice factoring loan offering, your accounts receivable function as collateral. Banks will also place a UCC-1 filing on your corporate assets, which helps secure the loan for the creditor. You won't have to put up personal assets to get an invoice financing loan with Noble. Instead, a UCC-1 filing will be placed on some business assets, which serve as collateral in the event you default on the loan. This filing can either be placed on certain assets or as a blanket lien.
Time Until Deposit
Once you've been approved, your payment can be issued in as little as two to three days. The overall process should take under a week, depending on how much you're asking for and your business's financial history.
For invoice financing loans, you'll have to provide documentation to verify that you're a majority holder in the business and that your business can financially support the loan.
In general, it's a good idea to have all your financial documentation ready, including copies of your photo ID, business address verification and financial statements, before you talk with a bank. If you have questions about what information you'll need to provide, ask your Noble representative, and they can set you on the right track.
When to Use This Type of Loan
Invoice financing is ideal for small businesses that have a lot of outstanding invoices. It allows you to get the cash from those invoices upfront for a manageable fee. Noble's offering functions as a line of credit, so you can draw on your outstanding invoices and use the cash as you need it. This type of funding can be used for any business-related expense. This includes marketing or advertising, hiring a new employee, covering payroll, expanding your business, acquiring another business, buying new equipment or business materials, and managing cash flow. If you're interested in other, more long-term loans, Noble also provides these for small businesses.
Reputation and Customer Service
Noble Funding is ranked as an A+ business with the Better Business Bureau. There weren't any individual reviews of the company on the site, but we found good reviews of the company on various other websites.
To evaluate Noble's customer service, we posed as a small business owner and spoke with several company representatives about its loan offerings. In all instances, Noble's sales team provided us with the answers we needed. They helped us get an idea of the overall offering, and even pointed us to other lenders and types of loans that made more sense for our business. The representatives were friendly, and at no point did they try and push us to sign an agreement or convince us to take on a loan that wasn't ideal for our business.
Based on our hypothetical business's finances, Noble representatives suggested invoice financing. One element that impressed us is that representatives made it clear that they not only wanted to help us find the appropriate type of financing, but they wanted to match us with a lender that would grow with our business. Representatives also provided contact information via email so we could follow up when our business was ready. They also offered to answer any questions at any time, either over the phone or through email. Overall, we were impressed with Noble's customer service offering.
Noble Funding doesn't provide a lot of detailed information about each type of loan on its website. This is a minor drawback, because it does list some basic information about each product on its site. It has general amounts and some qualifications for small businesses, but in terms of rates or specific loan offerings, there isn't a lot of information available.
Other than this minor limitation, Noble has a compelling offer. It provides businesses with a range of suitable loan options and manageable qualifications.
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