Invoice Factoring Calculator
Calculate the cost of factoring your invoices. Understand advance rates, factoring fees, and how much you'll receive from factoring your accounts receivable.
You're responsible if customer doesn't pay (lower fees)
% of invoice paid upfront (typical: 80-90%)
Fee charged after first week until payment
Cost Analysis
How Factoring Works
- 1. You submit invoice to factor
- 2. Factor advances 85% immediately
- 3. Customer pays factor directly
- 4. Factor releases reserve minus fees
* Rates vary by industry, customer creditworthiness, and volume. This calculator provides estimates only.
Understanding Invoice Factoring
Recourse Factoring
You remain responsible if your customer doesn't pay. If payment isn't received, you must buy back the invoice or replace it with another.
- • Lower fees (1-3%)
- • Higher advance rates
- • You bear the risk
Non-Recourse Factoring
The factor assumes the risk of non-payment (usually only for credit-related defaults, not disputes).
- • Higher fees (2-5%)
- • More selective on customers
- • Factor bears credit risk
Best For
- • B2B businesses
- • Long payment terms
- • Fast growth phases
- • Creditworthy customers
Typical Terms
- • 80-90% advance rate
- • 1-5% factoring fee
- • 0-1% weekly fee
- • Net 30-90 invoices
Considerations
- • Customer notification
- • Monthly minimums
- • Contract length
- • Hidden fees
Frequently Asked Questions
Will my customers know I'm factoring?
Usually yes. Most factoring arrangements require "notification factoring" where customers are instructed to pay the factor directly. Some factors offer confidential factoring at higher rates.
How is factoring different from a loan?
Factoring is a sale of your invoices, not debt. You're selling the right to collect payment. There's no loan to repay—the factor collects from your customer directly.
What invoices can be factored?
Most B2B invoices to creditworthy customers can be factored. Factors typically won't factor invoices to consumers, government agencies (without special programs), or disputed invoices.
How quickly can I get funded?
Initial setup takes 3-7 days. After approval, individual invoices can typically be funded within 24-48 hours of submission, sometimes same day.