BlueVine, established in 2013, and now with three locations in California, Louisiana and New Jersey, was borne out of a personal need. Eyal Lifshitz, the company’s founder, watched his entrepreneur father struggle with cash-flow issues while waiting for insurance companies to pay out invoices from his physical therapy business. From this observation, he recognized the need to help small business owners overcome problems with erratic cash flows.
While BlueVine offers the more traditional line of credit type of loan, they primarily are involved in invoice factoring. In particular, BlueVine is willing to accept both B2B (business-to-business) and B2G (business-to-government) invoices; BlueVine, unfortunately, cannot accept B2C (business-to-consumer invoices). One thing which sets BlueVine apart from similar lenders is that they offer a great deal of flexibility to the borrower, essentially allowing them to hand-pick the invoices they want to factor. In so doing, the borrower can pick and choose the invoices to be factored, effectively “weeding out” the ones which might be slow to pay (which would otherwise trigger a late fee and other penalties with BlueVine). With invoice factoring, the value of unpaid invoices is sold at a reduced price, typically between 80% and 90%. That provides the borrower with the ability to obtain cash, as and when needed, to satisfy any shortfall.
In the alternative lending space, those companies which provided invoice factoring have often gotten a bad rap, and perhaps rightly so, for excessive fees and other restrictions. But BlueVine is nothing if not transparent; they have made the process of invoice factoring as simple, streamlined and flexible as possible, and for those small businesses which do not do factoring, or for those who want more options, they offer a traditional line of credit.[wpsm_column size=”one-half”][wpsm_pros title=”PROS:”]
- Relaxed qualifications for borrowers, even with poor credit history
- Can work with very young businesses (operating less than three months)
- Good fit for small businesses which process receivables
- Provides borrower selected invoice factoring
- Offers same day return of invoice reserves
- No maintenance fees for inactivity or low transactions
- No prepayment fee
- High loan limits
- Hard credit pull not done until offer accepted
- Terms and fees can be expensive
- Line of credit not available in all states
- Draw free charged for each advance on line of credit
- Frequent repayment cycle (weekly or monthly)
- Cannot work with past-due invoices
Services Offered & Types of Funding
BlueVine offers two types of funding for small businesses:
|Types of Loans||Minimum
|Interest Rate||Fee||Terms||Collateral Required|
|Line of Credit Flex6||$6,000||$5,000,000||0.3% to 1.5%, per week||Draw fee of 1.6% to 2.5%||6 months; repayment weekly||Personal Guaranty|
|Line of Credit Flex12||$6,000||$5,000,000||1.5% to 6.5%, per month||Draw fee of 1.6% to 2.5%||12 months; repayment monthly||Personal Guaranty|
|Invoice Factoring||$20,000||$5,000,000||Discount rate of 0.3% to 1.1%, per week||Wire fee of $15 ,Late fee of 2% to 3% of amount due||Up to 90 days; repayment weekly||Personal Guaranty|
BlueVine’s line of credit offering is a good option for borrowers who don’t rely on invoice factoring. Like other lenders of its ilk, the line of credit can range from a low of $6,000 to as much as $5,000,000, with the amount approved dependent upon the borrower’s creditworthiness. Similarly, the rate that BlueVine will charge you for the outstanding balance under the line of credit, as well as the individual draw rate for each advance, will be based on the strength of the borrower’s credit profile. BlueVine offers two different lines of credit; one with a maximum term of six months (the Flex6) and the other with a maximum term of 12 months (the Flex12). The Flex6 requires payment on a weekly basis, while the Flex12 allows for monthly repayments.
The borrower requirements for the Flex12 are more stringent, as could be expected when the repayment terms are longer. In either case, the personal guaranty of the owner will be required; however, no collateral is required, unlike other lenders who might file a blanket lien against the company assets.
Under invoice factoring, the amounts will range from $20,000 to $5,000,000. Like the lines of credit, the amount approved and the applicable advance, discount and factor rates will vary depending upon the creditworthiness of the business. In general, BlueVine will offer an advance rate of between 85% and 95% of those invoices which meet BlueVine’s requirements. The discount rate of those invoices will range from between 0.3% and 1% per week.
The requirements for invoices that BlueVine is willing to advance against include:
- Customer is a business or government entity
- Customer is US or Canadian-based
- Invoice is for a completed service or product
- Minimum face value of the invoice is $500
- Maximum payment term is 91 days
- Due date more than one week away
In a nutshell, here’s how invoice factoring works: Let’s say you have generated an invoice for services rendered in the amount of $2,000 for a US-based client; this happens to be a client you know well who always pays on a timely basis (this is very important, because BlueVine does charge a late fee and you are ultimately responsible if the customer does not pay). Based on your loan agreement, BlueVine will advance you 85% of the invoice, so you get $1,700, while they have “reserved” or held back $300. In four weeks, the customer pays the invoice in full, which had a 1% discount rate (per week), resulting in a fee of $80. BlueVine then sends you the reserve of $220 (in most cases, paid out on the same day as the invoice is paid).
BlueVine’s invoice factoring is non-recourse, which means that the borrower is ultimately responsible for the payment of the invoice if their own client does not pay.
One interesting option that might be available to the invoice factoring borrower is their decision to allow BlueVine to notify the borrower’s payees that this factoring agreement is in place. Known as notification factoring, the benefit to the borrower is that BlueVine may be more generous in their maximum loan amount.
Rates and Fees
BlueVine has various fees which are product-driven. The lines of credit will, of course, have a pre-determined interest rate which will be charged either on a weekly or monthly basis, depending on the term of the line of credit (Flex6 or Flex12). Moreover, each advance of the line will have an applicable draw fee attached to it. Miscellaneous fees under the lines of credit include late fees which are $15, or 5% of the amount due, whichever is higher. For those borrowers who do not make automatic repayments through an ACH debit, BlueVine will assess a check processing fee of $7. A check returned for non-payment will attract a $15 fee. Last but not least, and negotiable to a great extent, BlueVine charges a $50 annual fee.
The invoice factoring aspect also has several associated fees. Besides the factor rate, which will be agreed upon by both parties prior to the first funding, there is also a late fee of between 2% and 3% of the invoice amount due. Once the grace period elapses, a daily penalty will be assessed. In order to encourage the borrower’s use of ACH (or, more accurately, to discourage other forms of payment), BlueVine will charge $15 for each wire transfer (and given potentially daily remittances of paid invoices, that could add up substantially).
Borrower requirements for a line of credit with BlueVine are as follows:
[wpsm_titlebox title=”FLEX6 LINE OF CREDIT” style=”1″]
- Minimum time in operation: Six (6) months
- Minimum annual revenue: $120,000
- Personal Credit Score: Minimum of 600
For a Flex6 line of credit, borrowers located in Maryland, Washington, DC, Nebraska and New York, borrowers must either be a Limited Liability Company (LLC) or a corporation; sole proprietorships and partnerships are not eligible for a BlueVine line of credit. Moreover, having more than three non-sufficient fund (NSF) charges against your business bank account within the past two months will exclude your company from eligibility.
[/wpsm_titlebox] [wpsm_titlebox title=”FLEX12 LINE OF CREDIT” style=”1″]
- Minimum time in operation: Two (2) years
- Minimum annual revenue: $450,000
- Personal Credit Score: Minimum of 650
- Minimum time in operation: Two (2) years
- Minimum annual revenue: $900,000
- Personal Credit Score: Minimum of 620
Borrowers located in North Dakota, South Dakota, Nevada, New Hampshire, Vermont, Tennessee or Kentucky for a Flex12 line of credit. Borrowers seeking a Flex12 line of credit must either be a Limited Liability Company (LLC) or a corporation.[/wpsm_titlebox] [wpsm_titlebox title=”INVOICE FACTORING” style=”1″]
- Minimum time in operation: Three (3) months
- Minimum annual revenue: $100,000
- Personal Credit Score: Minimum of 500
Invoice factoring is not available to B2C clients (business-to-consumers). Though invoice factoring is available across the US, BlueVine will only accept invoices of the borrower’s B2B (business-to-business) and B2G (business-to-government) customers which have with a minimum annual revenue of $10 million and which are based either in the US or Canada.[/wpsm_titlebox]
Once you’ve answered some standard questions you will be asked to create an account on the BlueVine website, all of which takes about five minutes. From there, you will begin the application process online with more specific information provided. Having the required documentation or information at hand can speed up the process.
With your provision of your contact information, you can expect a BlueVine representative to call you to discuss your options and to elaborate on their process. In general, BlueVine says they can give you an initial decision within about 24 hours. Once approved, you’re given immediate access to draw on your line of credit or to sell your invoices for an advance.
Regardless of your funding type you will have to provide BlueVine with some documents so that they can gauge your company’s credit strength. Besides your own personal FICO score and business history, BlueVine looks at your transaction volume, and your company’s social media presence. Finally, they will look at your B2B and B2G clients’ own creditworthiness (since they require minimum annual sales of $10 million); a customer of yours that is not familiar to BlueVine could delay the approval process of that particular invoice.
Documents or information needed:
- Social security number
- Federal Tax ID number
- Contact info (address, phone, email, website link, etc.)
- Type of business (corporation, LLC, etc.)
- Industry your business operates within
- List of customers and types of customers
- Estimate of customers’ revenues (annually)
- Your company’s annual revenues
- Debt schedule and/or current financing arrangements
- Bank statements for the last three months
It is beneficial to note that with invoice factoring, BlueVine is compatible with Xero, Quickbooks or FreshBooks. In fact, BlueVine says that you can apply for credit with them directly through the accounting software, which may speed the application process and/or result in your qualification of a higher loan amount.
Help & Support
For questions about your account, or even in general, borrowers can reach BlueVine’s customer service team six days a week by phone. Email is also an option every day of the week. For more general information, BlueVine invites borrowers to reach out to Facebook or Twitter which is closely monitored, with very responsive representatives. The website’s FAQ page is also very handy for potential customers, while a dedicated page with more in-depth information is available to borrower’s through their online portal.
BlueVine has an A+ rating with the Better Business Bureau and has only a few complaints on the BBB website, which was a very valuable thing that we discovered during our BlueVine review. On the websites know for user reviews, Trustpilot has nearly a thousand reviews for BlueVine with a solid 85% of reviewers giving them a 5-star ranking. Only 2% of respondents gave BlueVine a review of poor or bad, with those claiming in some instances that the draws were not permitted, or that the offers had changed without the borrower’s knowledge.
In nearly every case, BlueVine responded, noting that in some instances if the offer is not accepted within 14 days the terms may change, and that previously unreported information that they now have may change the parameters of the loans. In about half of the cases of 1-star ratings, BlueVine invited the client to write the Trustpilot review. Of the 5-star reviews, the majority express gratitude for an easy process as well as outstanding assistance from the BlueVine customer service team.
Because the concept of “one-size-fits-all” simply doesn’t always, BlueVine has different borrower requirements for each of their products. The company also gets high marks in the alternative lending space, especially for its flexibility with invoice factoring. Companies, even relatively young businesses, which process a large number of invoices, can get funding assistance from BlueVine, as and when needed. It should be stated that because factor rates can be on the high side, a company which does have a top-notch credit history might want to investigate traditional lenders first. However, if speed is of the essence, then BlueVine can probably meet your cash flow needs before the SBA or traditional lenders have even made an offer.
With BlueVine, their transparency in terms of rates and fees is a large plus. The fact that they also do not lock a borrower into a long-term contract or charge them a penalty for prepaying their line of credit also works in the customer’s favor. The flexibility in terms of invoicing is not typically seen in similar lenders; though BlueVine ultimately has the final word on which invoices it will permit an advance against, the borrower is not compelled to assign all invoices, only those it chooses. All told, there is very little downside to borrowing from BlueVine, if the constraints of a traditional lender force you to look elsewhere.