Search for “factoring” on Google and you won’t find much about CIT Group Inc. or Wells Fargo Capital Finance, two of the country’s biggest factoring firms. But you will find an ad from tiny Fast A/R Funding.

Unlike other factoring companies, which get much of their business through sales calls or referrals, Fast A/R is looking for business through online advertising. It’s a move that speaks to the kind of businesses Fast A/R wants to help finance: ones that haven’t worked with a factor before and might have no idea what factoring is. They might not even know the word.

“They’ll find us if they search for ‘factoring,’ ” said Matt Begley, chief executive of Fast A/R’s since its founding two years ago. “But they might also be searching for ‘How to make payroll’ or ‘How to get cash for my business.’”

Begley’s company is one of a new breed that’s helping push factoring, a financial tool used largely by apparel companies and other makers of consumer goods, into other industries, accounting for some of factoring’s recent growth.

Most of Fast A/R’s clients are service providers, such as IT consulting firms, social media developers and commercial cleaning companies. Beverly Hills factor Fast Pay Partners LLC is more narrowly focused, working with businesses exclusively in the digital media industry. Both companies use a type of factoring different from the so-called nonrecourse factoring that’s common in the apparel trade.

In nonrecourse factoring, a factor purchases a client’s accounts receivable at a discount and then collects the receivables. Because the factor, not their client, owns the receivables, the factor does not have recourse to seek payment from the client if a bill isn’t paid. That protects the client against bad debt.

But Fast Pay and Fast A/R don’t offer such credit protection. They’re both recourse factors, meaning they can collect from their clients if their customers don’t pay. Though such deals are often structured as the purchase of accounts receivable, they’re more easily understood as short-term loans, with accounts receivable held as collateral.

“We’re simply a very specialized form of collateralized lending,” said Jed Simon, chief executive of Fast Pay. “We’re not offering credit protection. Our clients are certain they’re going to get paid. Their customers are large advertisers employing big ad agencies. The challenge isn’t credit risk; it’s accelerating the payment.”

Cash up front

Fast Pay and Fast A/R are both trying to fill gaps in the commercial finance market, looking for specific types of clients that usually can’t get bank lending but that might not see factoring as an obvious choice.

For Fast A/R, that includes small-business owners who aren’t familiar with factoring and in years past might have financed operations by taking equity out of their homes.

Aiming to make the process simple, Fast A/R developed its own software to put the factoring process online, from the application to submitting invoices. Fast A/R’s system also integrates with QuickBooks, an accounting software program commonly used by small businesses.

Fast Pay, meanwhile, targets digital media companies in need of advance payment. Unlike most small businesses, those companies might have the option to raise money from venture capitalists or other investors. But Jed Simon, Fast Pay’s chief executive, said his company allows digital media companies to grow without additional investor money.

“Once your product is built and your technology is there, you shouldn’t have to raise equity to manage the working capital shortfall,” Simon said. “That’s a problem you should use debt to solve.”

Jen Sargent, chief executive of Santa Monica’s HitFix Inc., said that’s why her company has been working with Fast Pay for about a year.

HitFix produces videos and news reports about the entertainment industry for its website and distribution on Hulu and YouTube. TV networks and movie studios buy ads, but they often take three or four months to pay. HitFix could run out of cash while waiting.

“We can have half a million or more tied up in receivables, which is a lot of cash for a business our size,” Sargent said. “But it would be a shame to raise funding and give away ownership for a receivables issue.”

Fast Pay will pay HitFix up front for up to 80 percent of the value of its receivables. Once its advertisers pay, HitFix gets the rest of the money, minus Fast Pay’s fee. Usually that’s between 1 percent and 2 percent, depending on the value of the deal and other variables.

Unlike many businesses that use factoring, HitFix also had the option to get a traditional loan, with offers from two different banks that would have charged lower interest rates.

But Fast Pay was ultimately cheaper. At any given time, HitFix is waiting for between $500,000 and $1 million in receivables to be paid. For that amount, it didn’t make sense to go with a bank loan, which Sargent said would have come with about $30,000 in legal fees, annual audits and other added expenses.

“If we got to a point where we were financing millions of dollars a month, the math on the bank loans probably look better,” she said. “But in the in-between phase, Fast Pay was a much more palatable option.”