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Invoice Factoring Cost Calculator
Estimate how much it costs to factor an invoice — the advance you receive up front, the factoring fee over the invoice term, and your effective annualized rate — for a chosen invoice amount and terms.
🔒 This tool runs entirely in your browser. Your files are never uploaded to a server.
Cash advanced up front
$0
Total factoring fee
$0
Remaining balance paid on collection
$0
Effective annualized rate
0%
Example shown — replace it with your own invoice terms.
How it works
- Enter your invoice amount, the advance rate the factoring company offers, and its fee per 30 days.
- Enter how many days you expect it to take for your customer to pay the invoice.
- The calculator shows your upfront cash, total fee, remaining balance, and the effective annualized rate on the money advanced.
FAQ
What is invoice factoring?
Invoice factoring is selling an unpaid invoice to a factoring company for immediate cash, usually 70-90% of the invoice value up front, with the remainder (minus a fee) paid once your customer settles the invoice.
How is the effective annualized rate calculated?
It divides the total factoring fee by the cash actually advanced, then annualizes that based on the number of days until the invoice is expected to be paid — this converts a per-invoice fee into a rate comparable to a loan's APR, since factoring fees are quoted per period, not per year.
Why can factoring look cheap per invoice but expensive annualized?
A "2.5% fee" sounds small, but if it's charged over just 30-45 days, repeating that cost over a full year compounds into a much higher effective rate — this is the single most common reason factoring surprises first-time users.
Factoring calculator vs. a factoring company's quote
| Feature | This calculator | A factoring company's quote |
|---|---|---|
| Instantly compare scenarios and terms | ✓ | ✗ |
| Includes tiered fees and customer credit risk | ✗ | ✓ |
Good for comparing offers at a glance; get a written quote from the factoring company before committing.