Invoice Factoring Cost Calculator
What selling your invoices really costs.
Enter your values
ⓘ Live results
Results
- Cash advanced now
- $42,500.00
- Total factoring cost
- $2,125.00
- Net amount you receive
- $47,875.00
- Rebate paid on collection
- $5,375.00
- Cost as a share of the invoice
- 4.25%
- Effective annual rate
- 40.6%
Quick answer
Factoring cost = discount rate × invoice value per period held, and because periods are short the effective annual rate is often 20–60%.
Effective APR = fee ÷ advance × (365 ÷ days)
How to use the Invoice Factoring Cost Calculator
- 1Enter the invoice value and the advance rate offered.
- 2Enter the fee per 30 days and how long the customer usually takes to pay.
- 3Add any admin fee per invoice.
Worked example
Using the values the calculator loads with:
Inputs
- Invoice value50000 $
- Advance rate85 %
- Factoring fee2.5 % per 30 days
- Days until the customer pays45 days
- Admin or service fee250 $
Results
- Cash advanced now$42,500.00
- Total factoring cost$2,125.00
- Net amount you receive$47,875.00
- Rebate paid on collection$5,375.00
- Cost as a share of the invoice4.25%
- Effective annual rate40.6%
Frequently asked questions
Is factoring expensive?
Per invoice it looks cheap, but annualised it is usually 20–60%. It is a cash-flow tool for growth, not a substitute for a line of credit.
What is recourse factoring?
With recourse, you repay the factor if the customer never pays. Non-recourse costs more but transfers the credit risk.
About this calculator
- Built and reviewed by James Whitfield · How we build and test calculators
- Report an error
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.